&ER&
United States
Environmental Protection
Agency
Office of Exploratory
Research
Washington DC 20460
Research and Development
EPA-600/S8-81-020 Dec. 1981
Project Summary
Assessment of Future
Environmental Trends and
Problems: Industrial Use of
Applied Genetics and
Biotechnologies
Robert H. Zaugg and Jeff R. Swarz
This study represents a portion of an
overall EPA/ORD assessment of
future environmental trends and prob-
lems. The focus of this summary is the
industrial use of applied genetics. The
pharmaceutical, chemical, energy,
mining, and pollution control indus-
tries are examined.
Following a brief historical review of
the important developments in basic
biological research that heralded the
advent of modern biotechnology, the
summary describes the variety of
experimental and commercial tech-
niques encountered in this field. These
methods include recombinant DNA
technology, mutagenesis, cell fusion
procedures, immobilized bioprocesses,
and fermentation technology.
The section entitled "Interested
Parties" lists those who are actively
involved in the commercialization of
applied genetics. Over 100 U.S. busi-
ness firms and about 50 foreign
concerns are identified as having
substantial commercial interest in
biotechnology. This section also
describes the role of U.S. government
agencies in examining progress in this
field.
Much of the summary consists of an
industry-by-industry analysis of
current R&O activities in biotechnol-
ogy, an estimate of future prospects.
and an assessment of potential
environmental and health hazards
associated with these activities.
Trends are identified and, wherever
possible, schedules for the
appearance of new applications are
predicted.
The final section summarizes the
findings and makes recommendations
to the EPA regarding future action in
the field of applied genetics.
This summary is submitted in fulfill-
ment of Contract No. 68-02-3638 by
Teknekron Research, Inc., under the
sponsorship of the U.S. Environ-
mental Protection Agency. This
summary covers the period October 1,
1980 to February 28, 1981 and the
work was completed as of March 31,
1981.
This Project Summary was develop-
ed by EPA's Office of Strategic
Assessment and Special Studies,
Office of Exploratory Research,
Washington, DC, to announce key
findings of the research project that is
fully documented in a separate report
of the same title (see Project Report
ordering information at back).
Introduction
Applied genetics has recently
emerged as an exciting technology that:
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(1) may contribute significantly to the
solution or alleviation of world-wide
problems such as dwindling food and
energy supplies, infectious diseases,
cancer and environmental pollution;
(2) has stimulated over one billion
dollars in capital investment by private
business in the United States; and
(3) has occasioned a heated and contro-
versial debate within academic and
government circles regarding issues of
safety, academic freedom, and societal
ethics. These events have arisen largely
from scientific advances made in basic
biological research during the past 10
years. Scientists are now able to
manipulate the genetic material (DNA)
of living cells, thus making possible the
transfer of specific genes from the cells
of one organism to the cells of another.
Consequently, for the first time, man is
able to make fundamental changes in
the inherent structure of living things,
thereby endowing organisms with
characteristics that were previously
unavailable to them.
This new technology, referred to as
"recombinant DNA," is the most pub-
licized and controversial issue in the
applied genetics field, but it represents
just one of several biological techniques
that are increasingly being applied to
commercial processes in the industrial
sector. This summary describes these
techniques and summarizes their appli-
cation to industrial processes in phar-
maceuticals, chemicals, energy,
mining, and pollution control. Future
uses of these technologies are also
projected within each industrial sector
and, most importantly, potential
environmental and health hazards
associated with either current or future
applications of biotechnology are
identified. Finally, the EPA is provided
with several recommendations as to
those areas requiring additional study,
as well as the advisability of promul-
gating regulations designed to oversee
commercial activities.
Technology of Applied
Genetics
The technology encompasses a
variety of procedures and processes.
• Non-recombinant DNA methods
for inducing genetic alterations in
cells include: (1) mutagenesis, in
which physical or chemical agents
(mutagens) induce mutations in
the DNA; (2) cell fusions, in which
two cells of differing types are
fused together into a single unit
that manifests characteristics of
both parental cell types; "hybrid-
omas" that produce monoclonal
antibodies represent a very useful
application of this technique; and
(3) simple genetictransformations
of cells can be accomplished by
merely exposing the cells to puri-
fied DMA which, under appropriate
conditions, is taken up by the cells
and incorporated into cellular
DNA.
• Immobilized bioprocesses refer to
various methods of confining, or
immobilizing, intact cells or cellu-
lar enzymes within an inert
matrix, followed by passage of
substrate materials through this
"bioreactor." Applications of this
technology will become popular in
all industrial sectors; some pollu-
tion control practices already
employ versions of this technology,
such as rotating biological discs
and trickling filters for waste
water treatment.
• Fermentation technology, although
practiced for centuries, will be
increasingly in demand owing to
the requirement of mass-producing
microorganisms and microbial
products. Traditional batch fer-
mentations will be supplanted
increasingly by modern fermenta-
tion techniques, such as
continuous flow and solid phase
processes.
• Gene therapy in humans, al-
though still highly experimental,
may soon permanently cure tragic
genetic diseases such as sickle
cell anemia and thalassemia, by
providing patients with DNA that
replaces the defective genes.
Interested Parties
The immense excitement generated
by applied genetics arose from findings
made over the past decade in university
laboratories. These scientific advances
quickly burgeoned into a rapidly
growing multi-million dollar industry.
Meanwhile, various government
agencies have become interested in this
area owing in part to concerns about the
overly fast commercialization of tech-
nologies whose safety has not been
established absolutely.
University labs have provided most of
the fundamental advances in both the
science and engineering aspects of bio-
technology. Many university scientists
have become affiliated with genetic
engineering firms. This situation has
occasioned some rivalry among univer-
sity scientists who now view their
research as potentially lucrative. As a
result, the qualities of cooperation and
intercommunication that once charac-
terized academic research have been
seriously compromised.
Over 100 U.S. companies are
engaged in some aspect of modern
applied genetics. Many large corpora-
tions, particularly those that emphasize
research and development, have initi-
ated in-house programs in biotechnol-
ogy. These include virtually all
pharmaceutical firms, most energy and
chemical companies, and several
agriculture and food product firms.
Meanwhile, dozens of new, small
genetic engineering firms have sprung
up in recent years. These entrepreneur-
ial ventures, which are exemplified by
Cetus Corp. and Genetech Inc., have
used risk-taking investors for initial
support but can now count on revenues
generated through research contracts
negotiated with large companies, such
as Dow Chemical, Eli Lilly, and Hoffmann-
LaRoche.
The federal government became
involved with applied genetics primaril}
in response to concerns, first expressec
by research scientists in the mid
1970's, that the continued use o
recombinant DNA techniques couU
produce new organisms that migh
escape from the laboratory am
endanger the human population and thi
environment. The National Institute a
Health (NIH) has set forth recommendei
procedures for constructing and hand
ling recombinant DNA molecules
These guidelines are mandatory fo
federally-sponsored research and ar
voluntary for commercial firms engage
in recombinant DNA research an
development. Since their first publice
.tion in the Federal Register in Summe
1976, the guidelines have bee
amended considerably and now reflei
a more confident and relaxed attituc
about the potential risks inherent i
these activities. The most recent versic
of the guidelines appeared in tr
November 21, 1980, issue of tr
Federal Register.
Other federal agencies involved wit
recombinant DNA issues include:
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• The Food and Drug Administration
(FDA), whose interest stems from
the fact that the first commercial
products emerging from this new
technology are intended for
human use; namely, human
insulin, growth hormone, and
interferon. As of June 1980, the
position of the FDA was that drugs
produced by recombinant DNA
techniques could not be marketed
under existing INDs or NDAs as
simply changes in manufacturing
technique.
• The Occupational Safety and
Health Administration (OSHA),
which announced (during the
Carter Administration) that it will
develop a recombinant DNA
regulatory policy over the next two
years.
• The National Institute for Occu-
pational Safety and Health
(NIOSH), which is interested in
examining several worker safety
issues related to commercial
recombinant DNA activities.
The question of patent protection for
products and processes evolving from
applied genetics research and develop-
ment is both controversial and important
to commercial firms anxious to protect
their investment. Two recent events are
noteworthy.
• On June 16, 1980, the Supreme
Court ruled that patent protection
cannot be denied io living things
provided that the principal criteria
for patentability (namely, that the
item be new, useful, and non-
obvious) are met satisfactorily.
• On December 2, 1980, Stanford
University and the University of
California were jointly awarded a
patent dealing with techniques
and processes commonly used in
recombinant DNA experiments.
The protection afforded by this
patent will permit the universities
to license the technology to any
company that wishes to employ
the techniques (i.e., every firm
engaged in recombinant DNA
research and development) and
they will collect royalties on its
use.
The practice of applied genetics in
foreign countries has generally
proceeded in a fashion similar to that in
the United States. In contrast to U.S.
activities, however, some foreign
governments have supplied consider-
able financial backing to fledgling
genetic engineering enterprises. The
governments of both Britain and France
have established nationally owned
genetic engineering companies. In
Japan, more than a dozen large chem-
ical and pharmaceutical firms are
actively pursuing biotechnology
programs with government support.
Likewise, private firms in Canada and
Israel have undertaken ambitious
projects in genetic engineering applied
to agriculture, industrial chemicals, and
waste management.
Industrial Applications,
Trends, Potential Hazards
Pharmaceutical Industry
The largest efforts to date toward
commercial application of modern bio-
logical techniques have taken place in
the pharmaceutical industry. The fol-
lowing new or improved drugs and
vaccines are likely to be the first
marketable products stemming from
recombinant DNA technology;
• Interferon, a protein made by most
cells of higher organisms in
response to virus infections, may
prove to be a valuable anti-viral
drug as well as a potential anti-
cancer agent.
• Insulin, a hormone made in the
pancreas, is a necessity of life for
most diabetics. Currently, insulin
is obtained from cows and pigs,
but recombinant DNA technology
will make possible a steady supply
of human insulin that will replace
the animal insulins as the prefer-
red drug for treating diabetes.
• Human growth hormone, or
somatotropin, is produced in the
pituitary gland and mediates
growth and stature, particularly in
children. Its value as a therapeutic
in humans is still speculative, but
growth hormone may be useful in
the treatment of ulcers, burns,
bone fractures, and bone deterior-
ation, as well as dwarf ism in
children.
• Somatostatin is a hypothalamic
hormone that may have thera-
peutic potential in the treatment
of diabetes.
• Thymosin, a thymus hormone,
regulates the development of a
portion of the immune system and
may have application in cancer
therapy.
• Beta-endorphin is a naturally
occurring opiate that mimics the
action of morphine. It has consid-
erable therapeutic potential as a
safe, non-narcotic pain-killer.
• Urokinase, a kidney enzyme, dis-
solves blood clots and may reduce
the likelihood of heart attacks and
strokes.
The second major pharmaceutical
area in which recombinant DNA tech-
niques are finding considerable applica-
tion is in the development of new, safe
vaccines. Vaccines to combat the
following viral and bacterial disease-
causing agents are now under develop-
ment:
• Hepatitis virus, which causes a
serious liver disease that has
reached epidemic proportions in
some parts of the world.
• Influenza virus, the many forms of
which have made reliable
vaccines unobtainable using con-
ventional techniques.
• Foot-and-mouth disease virus,
which causes a life-threatening
disease among domesticated live-
stock.
• Gonococcus bacteria, which
cause a type of venereal disease.
• Pathogenic E. coli, which cause
severe diarrhea in children.
• Oral bacteria, which are respon-
sible for tooth decay.
Future developments within the
pharmaceutical area are likely to be
involved with plants and sea creatures
as sources of new and powerful drugs,
human monoclonal antibodies for use
as in vivo diagnostics and therapeutics,
and techniques for effectively trans-
planting genes into human recipients.
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This last advance, although 10 to 15
years distant, will bring about many
political and ethical issues whose
seriousness will outweigh any technical
obstacle.
Applied genetics, especially recom-
binant DNA technology, has been
promoted to a greater extent in the
pharmaceutical industry than in other
industrial sectors. For this reason, the
potential risks arising from this new
technology have been assessed in the
context of laboratory and industrial
practices pertinent to the pharmaceuti-
cal sector. Several risk assessments
have been conducted to evaluate the
safety of using £. coli K12 as a host
bacterium for the manufacture of
human proteins via recombinant DNA
techniques. The viewpoints reached by
these evaluations are:
• It is virtually impossible for K12 to
colonize the human gut or to be
communicated between individ-
uals.
• The insertion into K12 of gene
sequences from human pathogens
would not create a pathogenic
K12 strain and would present
fewer risks than those pathogens
existing freely in nature.
• The ingestion of a K12 strain that
synthesizes and secretes a human
hormone, such as insulin, would
not contribute significantly to the
hormone levels that occur
naturally.
• The bacterial synthesis of human
proteins in the Gl tract (or
elsewhere in the body) would not
likely trigger an auto-immune
response to the human substance.
Apprehensions regarding the use of
other microorganisms, such as Bacillus
subtilis or Saccharomyces cerevisiae,
as host organisms for recombinant DNA
have been far less than fears attending
the use of E. co//" K12.
NIH and NIOSH have examined the
issue of worker safety in the pharma-
ceutical industry within the context of
recombinant DNA activities. NIH has
established a set of recommendations
for large-scale fermentation of recom-
binant DNA organisms with which
industrial firms are expected to comply
voluntarily. NIOSH has conducted walk-
through surveys of two commercial
fermentation plants (Eli Lilly and
Genetech). Lilly operates an eminently
safe fermentation plant, which serves to
set the standard of practice in this area.
The pharmaceutical area as a whole
appears to be well equipped to deal with
the experimental and engineering
safety issues that are posed by the
advent of recombinant DNA technology
in particular, and by the various applica-
tions of biotechnology in general.
Chemical Industry
The fruits of applied genetics are less
immediate in this industry than in the
drug sector, but biological processes
and renewable resources will eventu-
ally replace the physical-chemical
transformations of petroleum feed-
stocks upon which the chemical
industry is currently based. Some
projects underway or planned include:
• An immobilized bioprocess for the
oxidation of alkenes to their
corresponding alkene oxides.
• The commercial production of
microbial enzymes for use in
various industrial processes.
These enzymes include amylases
used to break down polysacchar-
ides for biomass conversions,
proteases for use as meat tender-
izers, oxidases and isomerases
that perform highly specific chem-
ical transformations of interest to
specialty chemical manufacturers.
• The direct production of simple
organic compounds by microbial
fermentation. These compounds
include acetone, acetic acid,
butanol, citric acid, ethanol, gly-
cerol, isopropanol, lactic acid,
methanol, propionic acid, and
numerous amino acids.
• The production of surfactants or
detergents from microbial fer-
mentation, particularly from
certain species of photosynthetic
algae.
• The isolation and commercial
production of several complex
organic compounds from higher
plants. Examples include natural
rubber from guayule and euphor-
bia, terpenoids and insecticides
from the juniper and scorpion
flowers, and long-chain fatty acids
from Lunaria and Vernonia.
The future applications of biotech-
nology in the chemical industry will
reside largely in the manufacture of
certain high-priced specialty chemicals
rather than in the production of bulk
commodity substances. The economics
favoring the future use of bioprocess in
this industry will depend substantially
on process design and engineering
characteristics, rather than on the
biotechnology involved.
Potential risks involved in the use of
applied genetics in the chemical
industry include the following:
• The species of microorganisms
likely to be utilized in the chemical
industry differ from those in the
drug industry. These microbes
include Pseudomonas. Acineto-
bacter. and Flavobacteria, about
which little is known regarding
pathogenicity in man.
• The chemical industry is unaccus-
tomed to the application of
biological processes as a business
enterprise and individual firms
may be unaware of potential
hazards inherent in these activ-
ities.
• The chemical industry has a
poorer record than the
pharmaceutical industry in areas
related to worker safety and envi-
ronmental protection, causing
apprehension as to the introduc-
tion of new technologies for which
industry-wide experience is
limited.
Energy Industry
Biological processes may someday
supply a major proportion of work
energy needs. Current activities in thi:
industry, however, are limited to tw<
general areas:
• The conversion of biomass inu
more useful fuels, such as ethane
or methane gas.
• Microbiologically enhanced oi
recovery, in which microorgan
isms injected into a spent oil we
may serve to rejuvenate the resei
voir by degrading a portion of th
residual oil (thereby lowering th
viscosity), repressurizing the we
by producing carbon dioxide ga
or by manufacturing chemical su
4
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factants that would
tightly bound oil.
mobilize
The range of potential uses of
biotechnology in the energy industry is
very wide, although most of these possi-
bilities lie far in the future. These
prospects include:
• The mass-production of hydro-
carbons from microbes (such as
algae) and from higher plants.
• The production of hydrogen gas
from water using enzymes iso-
lated from plant chloroplasts.
• The development of a solar battery
in which immobilized photosyn-
thetic biosystems mediate a direct
conversion of sunlight into
electricity.
• The use of iron-oxidizing Thio-
bacilli to mobilize the inorganic
mineral content of oil shale or
coal, thereby generating porous
zones that may expedite in situ
retorting or gasification schemes.
The large-scale commercial application
of biotechnology to the energy sector is
at a very early stage of development.
Nevertheless, some speculations can be
made regarding potential hazards of
these developments.
• The production in the U.S. of suf-
ficient ethanol to have significant
impact on domestic fuel supplies
will require the diversion of
enormous quantities of food
crops, particularly corn, for use as
biomass feedstock.
• The use of cellulosic feedstock in
ethanol production may entail
large-scale deforestation.
• The use of municipal or agricul-
tural wastes as raw materials for
ethanol or biogas production may
entail risks associated with the
transport of these wastes to a
central fuel generating plant.
• The species of microorganisms
likely to be utilized in the energy
sector for enhanced oil recovery
schemes (Pseudomonas and
Acinetobacter, for example) are
potentially serious pathogens in
man.
• Established energy companies are
not accustomed to dealing with
biological systems as a means of
producing energy and, thus, may
be unaware of potential hazards
resulting from their use.
Mining Industry
The impact of biotechnology in the
mining industry is currently quite
limited in scope, consisting largely of
bacterial leaching operations in which
metals are solubilized from low grade
ores by acidophilic, iron-oxidizing
bacteria of the Thiobacillus, Leptospiril-
lum, and Sulfolobus genera. Approxi-
mately 12% of U.S. copper production
stems from bacterial leaching. In addi-
tion, these microbes are useful in
leaching any mineral containing
adequate quantities of reduced sulfur,
or sulfide, such as pyrite (FeS2>, chalco-
pyrite (CuFeS2), and zincblende (ZnS).
Bacterial leaching is also used
extensively to recovery uranium from
ores that are rich in pyrite. ,
Microorganisms of numerous types
are capable of accumulating metal ions
from dilute solutions. This activity can
be exploited to concentrate valuable
metals from tailings ponds or waste
streams.
Genetic engineering applied to
leaching bacteria may be used to
increase the microbe's resistance to the
high concentrations of metals being
leached, to improve the efficiency of the
leaching process, or to develop
anaerobic strains of leaching bacteria to
permit their use in the interior of huge
slag heaps of low-grade ore where
oxygen-free conditions exist.
The limited scope of biotechnology in
the mining industry confines the range
of environmental concerns that demand
consideration. However, all foreseeable
applications of biological processes in
this industry involve microbial systems
operating in relatively open environ-
ments, such as slag heaps or tailings
ponds. Consequently, there are risks
that microorganisms or their metabolic
products will inadvertently contaminate
the local ecology. Specifically:
• Bacterial leaching operations
generate large quantities of sul-
furicacidwhichcouldcontributeto
the acidification of U.S. fresh water
supplies.
• Thiobacilli and related species are
not known to be pathogenic in
man, but their increased use and
greater exposure to human popu-
lations may select for bacterial
strains that have acquired the
ability to infect humans.
• The use of bacteria to concentrate
metals from dilute mine waters
entails the risk that such metals
will accumulate in the food chain.
• The mining industry has very little
experience with biological pro-
cesses. This lack of familiarity
could result in a failure to
recognize impending environ-
mental hazards or in an eagerness
to carry out biological processes
before their safety has been firmly
established.
Pollution Control Industry
Bioprocesses have long been instru-
mental to the practice of waste manage-
ment, but modern advances in applied
genetics may greatly facilitate the
remediation or elimination of some
present-day, intractable pollution prob-
lems. Current activities in the field
of biotechnology applied to pollution
control fall under three general head-
ings: (1) biodegradation of organic sub-
stances; (2) biological denitrif ication and
desulfurization; and (3) biological
concentration of toxic heavy metals.
Microbes capable of degrading
various organic pollutants, such as
petroleum hydrocarbons, pesticides,
herbicides, and lignocellulosics, have
been identified and are under investiga-
tion. A better understanding of the
biochemical nature of these organisms
will be required befaregeneticengineer-
ing can have an impact in this area.
Microbial systems capable of
metabolizing sulfur-containing and
nitrogen-containing inorganic and
organic substances have also been
identified. These organisms will find
considerable utility in eliminating these
pollutants from industrial waste streams
and from fossil fuels prior to combustion.
The greatest research and
development effort involving near-term
applications of biotechnology to pollu-
tion control will be in developing
improved microbial strains for decon-
tamination of polluted waste waters and
for in situ detoxification of contaminated
soils and sediments. However, a better
understanding must be acquired of the
types and activities of microorganisms
capable of degrading toxic chemicals.
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The follow! ng list outlines some aspects
of applied genetics and waste manage-
ment that will be under development.
• Cataloging the types of chemical
transformations performed by
microbes.
• Isolating and characterizing the
genetic material and enzymes
responsible fortheobserved trans-
forming activity.
• Conducting genetic engineering
on organisms that occur naturally
in a particular polluted environ-
ment in order to improve the effi-
ciency or survivability of the
organisms.
• Developing specific biotreatment
systems for dealing in situ with
toxic wastes. *
• Designing bioreactors for on-line
waste stream treatment that will
reduce or eliminate toxic wastes at
their source.
Conclusions and
Recommendations
The U.S. economy is on the verge of a
"biology boom." Excitement over the
commercial potential of genetic engi-
neering has been very high, as exempli-
fied by the considerable media attention
to this area, as well as the enthusiasm
shown by financial investors. One
aspect of applied genetics, recombinant
DNA technology, has received the bulkof
public attention, in regard to both the
favorable and hazardous results of its
application. But the risks inherent in the
practice of recombinant DNA techniques
are surely much fewer than originally
feared.
As with other technological advances,
biotechnology will be applied where it
will yield substantial commercial pay-
off. Only the pharmaceutical industry is
likely to realize near-term returns on
investments in this new technology.
Other industrial sectors will thoroughly
investigate naturally occurring biologi-
cal systems for potential commercializa-
tion prior to making significant
investments in recombinant DNA
technology.
Biotechnologies other than recombi-
nant DNA have received less public
attention but, nevertheless, are
expected tocontribute to the commercial
success of the "biology business."
Modern fermentation technologies will
be applied to relevant operations in all
industrial sectors, as will immobilized
bioprocesses, such as on-stream
bioreactors for waste stream detoxifica-
tion. Cell fusion techniques will undergo
further development as an alternative to
recombinant DNA methods for pro-
ducing genetically altered organisms.
Specific recommendations to the EPA
are as follows:
• Any environmental risks arising
from industrial uses of applied
genetics are speculative. At this
time, there exists no compelling
reason for the EPA to establish
regulations in this area.
• Should environmental hazards
emerge in the future, it is probable
that they can be handled within the
existing regulatory framework
(most notably Toxic Substances
Control Act).
• TheEPAshouldcontinuetotakeaTi
active role in promoting applied
research and development of
biological waste management
processes and techniques, with
particular emphasis on acquiring a
better understanding of the biology
of relevant systems rather than on
process design and engineering.
• The EPA should sponsor further
investigation into the generation,
dispersal, and control of biological
aeosols.
aerosols.
• The EPA should endeavor to
monitor commercial and scientific
developments in the field of
applied genetics with the aim of
identifying both imminent envi-
ronmental hazards and areas
where this technology might be
applied to pollution control
problems.
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Robert H. Zaugg and Jeff R. Swarz are with Teknekron Research, Inc.. 1483
Chain Bridge Road, McLean, VA 22101.
Morris A. Levin is the EPA Project Officer (see below).
The complete report, entitled "Assessment of Future Environmental Trends and
Problems: Industrial Use of Applied Genetics and Biotechnologies, "• (Order
No. PB 82-118 951; Cost: $15.00, subject to change) will be available only
from:
National Technical Information Service
5285 Port Royal Road
Springfield, VA 22161
Telephone: 703-487-4650
The EPA Project Officer can be contacted at:
Office of Strategic Assessment and Special Studies
Office of Exploratory Research
U.S. Environmental Protection Agency y
Washington. DC 20460
•A- US GOVERNMENT PRINTING OFFICE, 1982— 559-092/3393
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