Choosing Optimum
Management Strategies
Pollution Control Systems
EPA Technology Transfer Seminar Publication
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EPA-625/3-77-008
CHOOSING OPTIMUM
MANAGEMENT STRATEGIES
T>_
4?
ENVIRONMENTAL PROTECTION AGENCY • Technology Transfer
MAY 1977
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ACKNOWLEDGMENTS
This seminar publication contains materials prepared for the U.S. Envi-
ronmental Protection Agency Technology Transfer Program and has been
presented at Technology Transfer design seminars throughout the United
States.
The technical information in this publication was prepared by James A.
Commins, Bruce M. Sattin and Alfred Stapler, of JACA Corporation.
NOTICE
The mention of trade names or commercial products in this publication
is for illustration purposes, and does not constitute endorsement or recom-
mendation for use by the U.S. Environmental Protection Agency.
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TABLE OF CONTENTS
Page
Chapterl. INTRODUCTION . 1
Chapter II. THE APPLICABLE LAWS AND REGULATIONS 5
History and Evolution of the Environmental Regulations 5
Regulatory Agencies 6
Interpretation of the Laws 7
Regulation of Water Pollution 8
Regulation of Air Pollution , 11
Ancillary Laws and Regulations 13
Chapter IH. RELATIONS WITH OUTSIDERS 17
Consultants 17
Attorneys 20
Regulatory Agencies 22
Chapter IV. THE POLLUTION CONTROL PROGRAM 25
Management Timing 25
Turnkey vs. Company Integration 30
The Conceptual Design 31
The Procurement Package 43
Evaluation of Bids (and Bidders) 45
Acceptance Testing 53
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LIST OF FIGURES
Figure Page
1 Price Increases Based on Certain Indices 27
2 Capital Cost for Direct Flame Incinerators with Primary
and Secondary Heat Recovery (70- 300°F process gas inlet) .... 37
3 Estimated Installed Adsorption System Cost 38
4 Data Tinkering - "Cleanup" 41
5 Results of "Cleanup" 42
6 Operational and Capital Cost Comparisons 49
7 Optimizing Heat Recovery 50
IV
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Chapter I
INTRODUCTION
Although plant managers neither can nor should become pollution control experts,
they must have access to basic information on the subject.
This publication, therefore, is addressed to managers and supervisors who have
some responsibility for their plant's pollution control measures but for whom this rep-
resents only a part of their overall concerns. The general manager, for example, is
usually drawn into pollution control planning because profitability may be affected. The
production supervisor, who must maintain the plant's operating schedules, may also
share in selecting, installing, and operating the pollution control system. Even the
treasurer may be involved, because of the impact of pollution control decisions on cash
flows, relationships with lending institutions, and tax considerations. Other adminis-
trative employees are also likely to share in pollution control planning and operation.
Capital spending decisions require managerial expertise and may involve complex
sets of variables. Normally, these variables are the fairly standard ones that underlie
any calculated entrepreneurial risk. Some of the same considerations enter into deci-
sions about pollution control; for instance, cost-effective alternatives for materials
and design.
But managers should be aware that there are some unique considerations affecting
their decisions about pollution control. An obvious one is that a pollution control sys-
tem is one of the few capital investments a plant may make that in no way contributes
to efficiency or profitability. However, it also represents one of the few capital out-
lays eligible for government-sponsored benefits to ease financial strain.
What are the special factors that make management's decisions on pollution control
conspicuously different from decisions about other capital expenditures? We have iden-
tified five:
1. The decision-making process is subject to an externally imposed deadline.
For normal capital expenditures, a long period of deliberation is not
unusual. Moreover, the actual commitment can be put off if more critical
needs arise or if more favorable financial conditions are expected later.
In stark contrast stands the issue of pollution control. The laws and
regulations almost invariably include fixed deadlines for compliance, and
these, in turn, impose quite rigid deadlines for making decisions and
purchases.
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There are highly publicized instances of postponements of such deadlines,
sometimes through industry persuasion, sometimes through litigation. But
more often, government insists on timely compliance by industry.
2. Pollution control equipment is generally foreign to a plant's production
technology.
While management is highly knowledgeable about its manufacturing equip-
ment and the technology for enhancing productivity and improving product
quality and appeal, its understanding of waste control is often elementary.
Since modern pollution control equipment can be quite sophisticated, manage-
ment may face delicate selection and trade-off considerations, especially if a
decision is made to keep equipment expenditures low.
3. Performance of the new equipment must ultimately satisfy a third party: the
government,
Most plant managers have had experience with new equipment that did not
quite meet all the purchase requirements. When this happens, it is not un-
usual to work out a compromise with the equipment supplier—a reduction in
the purchase price or some other concession—with management guided only
by the plant's best interests.
How different the situation when pollution control equipment is involved!
A third party, the government regulatory agency, will hold management to the
performance standards in the regulations, meaning that a whole area of man-
agement freedom is eliminated.
4. A plethora of regulations may apply.
The usual parameters of management decisions, such as quality and cost-
effectiveness, may seem classically simple when a plant starts to deal with
pollution control. The regulations governing the capital-expenditure commit-
ments and those covering the performance of control equipment can originate
from different levels of government; sometimes several levels of regulations
appear simultaneously. There is also the ever-present possibility that con-
trolling one pollution problem will spark another. Efforts to deal with water
pollution have given rise to odor problems; control of air pollution, in turn,
has often led to a water pollution problem. Thus, the plant may suddenly find
itself bound by regulations governing new types of pollution.
5. Special tax treatment and financing sources may be available.
Fortunately, the special circumstances affecting capital expenditures for
pollution control are not all unfavorable. The government has established a
whole set of laws and regulations specifically aimed at pollution control ex-
penditures that provides especially favorable tax treatment and financing
arrangements.
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The suggestions that follow are not mere theoretical considerations; rather, they
have been applied in working plants and found useful, They are presented here from a
managerial viewpoint to aid managers and supervisors in conducting pollution control
programs in their own companies. Our goal is to provide information and guidance in
a practical, common-sense form. In keeping with this, we will cite actual case his-
tories, on the theory that while it is good to learn from one's own mistakes, it is even
better to learn from someone else's.
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Chapter II
THE APPLICABLE LAWS AND REGULATIONS
HISTORY AND EVOLUTION OF ENVIRONMENTAL REGULATIONS
Pollution control requirements are of surprisingly ancient vintage. The first
known statute regulating air pollution was enacted more than 700 years ago—in 1273.
Moreover, it appears that private lawsuits relating to pollution preceded this statute
by several hundred years.
These so-called private nuisance actions, which can still be invoked today (see
page 15), may have been somewhat effective in protecting a single landowner from a
nearby source of pollution. However, they proved much less satisfactory in protecting
the general public from diverse sources of pollution. The civil action of "public, nui-
sance, " therefore, evolved to allow municipal officials to sue to abate or halt a nui-
sance that affected the public at large. Eventually legal theories that developed around
the public nuisance law were codified in many jurisdictions as statutes or ordinances.
They provided criminal, as well as civil, sanctions against perpetrators of nuisances
to the general public.a
The United States adopted this English regulatory scheme, based on private and
public nuisance doctrines, and also evolved a statutory scheme dividing responsibil-
ities among different levels of government: federal, state, and even county or local.
In this particularly American system, smaller jurisdictional entities are normally
expected to resolve their own problems, especially in matters involving "police power"
(i.e., public safety and health). Larger entities become involved only if these efforts
are inadequate. Generally, this is the pattern that has prevailed in pollution control.
Among the present methods of control, regulation of different pollutants developed
by differing paths. Air pollution, for example, is regulated primarily by the states;
the federal government exercises mainly oversight authority. Water pollution, on the
other hand, is subject to more pervasive federal regulation, though the states play a
nearly equal role, incidentally causing frequent overlapping. Solid waste disposal and
noise pollution may be state regulated, but they are more commonly controlled by local
governments, if at all; the federal government plays a comparatively small part in
their control.
For water pollution control, the first federal assistance was finally offered in 1948
through the Water Pollution Control Act after it was recognized that the problem could
alnterestingly, moral as well as environmental offenses were frequently included in the regulation of public nuisances.
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not be resolved on the state level. Federal involvement was then expanded through the
Federal Water Pollution Control Act (FWPCA) of 1946 and again through the 1972
Amendments to that Act. At that point, the federal government effectively assumed
overall responsibility.
A similar pattern evolved in air pollution control. The first federal response to
deteriorating air quality came with the enactment of the Air Pollution Control Act of
1955. The subsequent Clean Air Act (CAA) of 1963 provided for increased federal sup-
port of state and local efforts. The Clean Air Act was amended twice in 1965 to estab-
lish specific federal emissions standards for motor vehicles and to require the issuance
of air quality criteria. The Air Quality Standards Act of 1967 further increased federal
involvement. Finally, the 1970 Amendments to the Clean Air Act required the states to
establish specific plans to reduce air emissions, provided a method of setting nation-
wide standards for new sources of pollution, severely restricted certain hazardous
emissions, and required even more stringent restrictions on emissions from motor
vehicles.
In the regulation of solid waste disposal, the federal government at first provided
technical assistance and modest financial assistance to state and local governments in
accordance with the Solid Waste Disposal Act of 1965, as amended by the Resource Re-
covery Act of 1970. The Resource Conservation and Recovery Act of 1976, signed into
law on October 21, 1976, further amended the Solid Waste Disposal Act, It required
the Environmental Protection Agency to set nationwide standards for the handling,
transportation, and disposal of hazardous solid wastes; to issue permits for operators
of hazardous-waste disposal facilities; and to fund research and development in waste
reduction, waste disposal, and resource recovery technology. Planning assistance to
the states is predicated on their phasing out open dumps over a 5-year period.
REGULATORY AGENCIES
Now, how are these environmental laws administered? They are administered by
executive agencies at federal, state, and local levels. The primary federal agency,
the Environmental Protection Agency (EPA), administers and enforces the Clean Air
Act, the Federal Water Pollution Control Act, the National Environmental Policy Act,
the Solid Waste Disposal Act, and other environmental statutes. Other federal agencies
may have input into environmental matters, but these are secondary to EPA and they
affect environmental regulation to a lesser degree. Some of the other agencies are the
Occupational Safety and Health Administration (OSHA), the Energy Research and Devel-
opment Administration (ERDA), the Federal Energy Administration (FEA), the Nuclear
Regulatory Commission (NRC), the Department of the Interior, and the U.S. Army
Corps of Engineers.
At the state level, environmental laws may be administered by one or more state
agencies. For example, in Maryland two entirely separate agencies control air pollu-
tion and water pollution. Three basic types of state environmental agencies have been
identified by the Council of State Governments:
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• The health department. This is where most states originally placed responsi-
bility for pollution control programs. While environmental matters may be-
come stepchildren to broader public-health considerations, the size of such a
department can provide economies of scale and act as a buffer against budget
slashing.
• The mini-EPA. This is a separate department responsible for all or almost
all pollution control programs. There are fewer policy conflicts here than in
a health department, but coordination of pollution control with other environ-
mental objectives may be more difficult.
• The environmental superagency. Here are found pollution control and all other
environmental responsibilities, such as conservation and resource management.
The superagency tends to be larger than the mini-EPA, with a correspondingly
stronger voice in state government. It also fosters an integrated approach to
environmental affairs, since conservation and natural resource management
responsibilities may be coordinated with pollution control objectives.
These state agencies implement federal statutes as well as state environmental
laws, which are frequently more stringent than comparable federal ones.
Local governments sometimes also regulate pollution; indeed, some have enforce-
ment authority specifically delegated by the state; and most have zoning, nuisance, and
noise-control ordinances. Cities that enforce air pollution codes commonly have some
type of enforcement agency for that purpose. Zoning decisions are generally made by
a zoning board. Other ordinances are usually enforced as criminal laws; local police
detect and apprehend violators, and the district attorney prosecutes them in the name
of the city or state.
The courts are the mechanism through which pollution control is accomplished
when voluntary compliance cannot be obtained. The courts may set fines or criminal
penalties for violations of the law (after a trial, of course). They award damages or
issue injunctions in nuisance actions. They hear appeals from agency determinations
and also hear citizen suits brought against the agencies or against industry under pro-
visions for such suits contained in environmental laws.
After centuries of quiescence, in the past decade the courts have become an active
force in pollution control. Their interpretations of the new environmental laws have
even caused enforcement agencies to become more vigorous in controlling certain
forms of pollution than the legislatures that enacted those laws may have intended.
INTERPRETATION OF THE LAWS
Managers who attempt to interpret environmental regulations without a strong
background in both the law and the technology of environmental control do so at their
own peril. Obviously, environmental laws and regulations are no less complex and no
more self-explanatory than any other form of bureaucratic prose.
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Even regulations that appear to be clear on their face can have serious pitfalls
lurking in the verbiage. Certain words or phrases with accepted meanings in ordinary
speech may assume substantially different significance in a law or regulation. Lawyers
refer to these as Ifwords of art. " Such words of art are sometimes, but not always,
defined in the regulation in which they appear. Absence of a definition does not mean
that a term is not a word of art.
One other precaution: Environmental regulations frequently specify testing proce-
dures that are acceptable for determining compliance with emissions or effluent limits.
Testing methods may be buried in appendices to the control regulations, or they may
be described in a special portion of the regulations devoted solely to testing methods.
Often a testing method is specified by name and/or number only with a reference to a
standard technical manual in which the mechanics of the test procedure are described.
If a particular test method is specified in the regulations, the enforcement agency
will not accept compliance tests made by other methods, even if the nonspecified pro-
cedure is more accurate and shows the facility to be well within the effluent or emis-
sion limits.
REGULATION OF WATER POLLUTION
The Federal Water Pollution Control Act divides sources of water pollution into
three categories and subjects each to a different method of regulation. The categories
are existing sources, new or modified sources, and sources of toxic pollutants, whether
existing or new.
Moreover, there is a further regulation, applicable to both new and existing
sources, which requires appropriate pretreatment when effluents are discharged into
publicly owned treatment plants. Although the states retain considerable authority in
regulating water pollution, the federal government's role is also considerable and may
lead to a great deal of overlapping enforcement. Let us see how regulations work in
already existing sources of pollution.
EXISTING SOURCES
For existing sources of water pollution containing no toxic substances, the Federal
Water Pollution Control Act requires the achievement of "best practicable control tech-
nology" (BPT) by July 1, 1977. FWPCA further requires the more stringent "best
available control technology" (BAT) by July 1, 1983.
It is important to note that, although the Act speaks of "best . . . technology,"
EPA translates this into numerical limits on the volume or concentration of pollutants
that a regulated source may discharge. The source may use any control technique (in-
cluding a change in processing methods) to meet these numerical limits.
EPA has attempted to set effluent limits on a number of industrial categories,
thereby in effect numerically defining for those industries what is meant by BPT and
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BAT. Such limits have been subject to much litigation, since the Act is somewhat am-
biguous as to whether EPA may set effluent limitations on existing sources or may set
only nonbinding guidelines. As the lower courts have not yet reached a consensus on
this issue, it will probably be resolved eventually either by a Supreme Court ruling or
by a clarifying amendment from Congress.
There are, then, three methods of translating the statutory requirements of BPT
and BAT into numerical limitations on existing sources of pollution:
• EPA sets effluent limits that are binding on the entire industrial category.
• EPA sets guidelines for effluents that will generally be applied to the entire
industrial category, but will leave some room for flexibility by the enforcement
agencies.
• Each source negotiates with the enforcement agency an individual definition of
BPT and BAT. (The agencies themselves, of course, frequently use informal
guidelines internally to set a negotiation range.)
EPA has delegated authority to 27 states to negotiate and enforce effluent limits on
individual sources. However, the authority to set nationwide effluent limitations and
guidelines for industrial categories cannot be delegated. In practice there are three
combinations of federal and state authority over existing sources of water pollution:
• When EPA has not delegated authority to the state, and the state has no permit
requirements of effluent limits of its own, only EPA regulations apply. In this
case, since EPA sets limits only on discharges to surface waters (e.g., rivers
and lakes); discharges to underground waters (e.g., quarries and wells) are
not regulated.
• When EPA has not delegated authority to the state, but the state has its own
permit requirements and/or effluent limits, then both state and federal regula-
tions apply. Thus, two permits may be required for surface discharges. For
underground discharges a state permit, based on state effluent limits, may be
required.
• Where EPA has delegated authority to the state, only one set of effluent limits
and permit requirements applies, and it may apply to both surface and under-
ground discharges.
Effluent limits, regardless of which agency imposes them, may be more stringent
than BAT for certain sources that discharge into heavily polluted waters. A goal of the
FWPCA is that all surface waters be suitable for fishing and swimming by 1983. If
EPA foresees that a water body will not reach that goal, it may impose limits even
stricter than BAT, although economic factors must still be considered.
NEW OR MODIFIED SOURCES
The FWPCA requires EPA to set new-source performance standards (NSPS),
covering 27 listed industrial categories and such other categories as EPA deems
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appropriate. These standards are similar to effluent limitations set by EPA for exist-
ing sources, and they apply uniformly to all new sources throughout the United States,
with little left to the discretion of enforcement agencies. NSPS are required to reflect
the "best available demonstrated control technology"—similar to the 1983 BAT require-
ment for existing plants. EPA may delegate enforcement authority over NSPS to the
states, but they may not set standards.
To date, NSPS have been issued for 40 industrial categories and a number of sub-
categories, NSPS for water pollution sources have generally been promulgated for the
same industrial categories that have existing effluent limitation guidelines. Standards
for new sources in industries without NSPS are determined on a case-by-case basis.
TOXIC WATER POLLUTANTS
FWPCA gives EPA authority to set effluent standards for toxic water pollutants.
These standards are also set by category of industry, and EPA may even place a total
ban on such discharges where appropriate. Unlike other regulatory provisions in this
Act, enforcement authority is not delegated to the states; but the states may set and
enforce their own toxic standards, which may be even stricter than EPA's.
To regulate a toxic effluent EPA must first list the pollutant as toxic, then set
effluent limitations on it for appropriate industrial categories (the primary sources).
Industries that discharge a listed pollutant for which no standards have been set are
regulated on a case-by-case basis.
PRETREATMENT
Both new and existing sources of water pollution have the opportunity under the
FWPCA to use publicly owned water treatment facilities, circumstances permitting.
To do so, the industry must pretreat the effluent to make it compatible with the treat-
ment capabilities of the public facility.
EPA establishes nationwide pretreatment standards for industrial categories, sim-
ilar to other limits, such as NSPS and toxic pollutants. In fact, all these sets of stan-
dards are often published simultaneously by EPA. EPA cannot delegate the setting and
enforcement of pretreatment standards to the states, but states may set their own pre-
treatment standards, as long as these are consistent with EPA's. Local governments
and regional authorities may also set pretreatment standards for treatment works that
they own and/or operate.
Since publicly owned facilities generally treat only settleable solids and organics,
users of these facilities must pretreat their effluent for those substances that are sub-
ject to standards. Users of a public facility must, of course, pay user charges, and
they may also be required to contribute to construction costs if a new or expanded
treatment facility must be built.
It should be noted that the use of publicly owned facilities is completely optional on
the part of the discharger. The decision as to whether or not to pretreat is based pri-
marily on economic, rather than legal, considerations.
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PERMIT SYSTEMS
Cutting across all water pollution controls is a system of permits that forms the
basis for virtually all compliance and enforcement activities. The FWPCA established
the basic permitting scheme, the National Pollutant Discharge Elimination System
(NPDES). An NPDES permit issued by EPA is required to discharge pollutants'into
virtually any body of surface water. In issuing these permits, EPA sets the specific
effluent limits on an individual source. If there are existing limitations or guidelines,
then these are made part of the requirements imposed by the permit. If none of these
apply, then BPT and BAT for the individual source will be determined by negotiation
between the discharger and the authority issuing the permit. These are translated into
numerical limits in the permit.
EPA has delegated permit issuance and enforcement authority to 27 states. These
states may require NPDES permits for discharges to either surface or subsurface
waters. The states, with or without delegated authority, may also require operating
permits and permits to construct new sources or to modify those already existing.
There is an interesting feature of this permit system. Obtaining a permit is, in
itself, an essential prerequisite to the right to discharge any pollutant, regardless of
how small the volume or concentration of the discharge may be. Therefore, unless
and until a source has obtained such a permit, its operations are in violation of the law
for that reason alone, even if effluents from the source comply with all applicable lim-
itations of BPT and BAT.
REGULATION OF AIR POLLUTION
Sources of air pollution also fall into three main categories: existing sources,
new or modified sources, and sources of hazardous pollutants, whether new or exist-
ing. Federal and state responsibilities are quite differently apportioned in the three
categories. In air pollution control there is nothing analogous to pretreatment or the
permit system (NPDES) which apply to water pollution.
EXISTING PLANTS
Air pollution emissions from existing sources of nonhazardous pollutants are reg-
ulated by state governments, with federal back-up enforcement by the EPA. The Clean
Air Act (CAA) required that each state develop an implementation plan (SIP) for regu-
lating air pollution. EPA determined if the plan was sufficiently stringent to enable the
state to attain the national ambient air qualtity standards in a timely fashion; if not,
EPA substituted appropriately stringent requirements of its own in the SIP.
There is no consistency in regulatory schemes among the states; some states have
different standards for different regions within the state; others do not. Some states
regulate emissions that others ignore (NOX and hydrocarbons, for example). Some
states set special emission limitations for certain industrial categories; others have
only a general emission limit. Not all states that select specific industrial categories
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for special regulation choose the same categories. Certain pollutants may be subject
to more than one standard within a particular state; for example, particulates may be
simultaneously subject to a mass emissions limit, a visible emissions limit, and a
fugitive dust limit.
Because regulations vary so greatly from state to state, management must care-
fully study the laws and regulations of the state in which a particular plant is located
before embarking on an air pollution control project for that plant. Experiences of
plants in other states should be relied upon only with appropriate caution,
NEW OR MODIFIED SOURCES
The Clean Air Act empowers EPA to establish national standards of performance
for certain categories of industrial sources, much as the FWPCA does for new sources
of water pollution. These standards (NSPS) apply to sources constructed or modified
after EPA's publication of proposed standards for that category. (The critical modifi-
cations that bring existing facilities within NSPS regulation are described at length in
EPA regulations.)
EPA does not issue permits to construct, but it must be notified prior to new con-
struction or modification extensive enough for NSPS to apply. EPA may delegate reg-
ulation to the states if state regulations are sufficiently stringent and the state agency
can demonstrate the capacity to enforce the regulations. Some states have new-source
regulations independent of EPA's; in those states, both state and federal regulations
must be satisfied. In addition, many states require permits to construct or modify a
source of air pollution. Local governments (particularly those with SIP enforcement
authority) may also require construction permits for new or modified sources.
Although NSPS for 24 industrial categories have already been published by EPA,
others are being considered. Since NSPS are generally more stringent than existing -
source standards, it is usually to a firm's advantage to begin construction or modifica-
tion of a plant prior to the publication of proposed new-source standards for its indus-
try. Construction is deemed "begun" by the letting of contracts; so if it is discovered
that NSPS for a contemplated plant are under consideration by EPA, substantial savings
may be obtained by pushing ahead with construction commitments to beat the NSPS ef-
fective date.
Approval for construction of a new source does not depend solely on that source's
ability to meet any applicable NSPS. Even if a new source meets its NSPS, or if no
NSPS apply to that source, construction still may not be permitted. This anomalous
situation is due to the current uncertainty over the Act's prohibition of degradation of
air quality in "clean air" areas (those already surpassing the national secondary am-
bient air quality standards). Construction in "dirty air" areas (those not likely to meet
the secondary ambient air quality standards by the deadline date) may also be prohib-
ited. The entire topic of construction of major sources of air pollution (minor sources
have generally been exempt from this controversy) is undergoing considerable change
through EPA regulations, court decisions, state agency actions, and congressional
attempts to amend the CAA to resolve the uncertainties.
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The current state of affairs (subject to much uncertainty) is that a new source may
be constructed in "dirty air" areas only if an equivalent amount of pollution is reduced
as an offset in the same area. The offset is separate from the emissions reduction
already required under the SIP. New sources in clean air areas may only "use up"
defined increments of the area's margin above the secondary ambient air quality stan-
dards. The application of these rules varies so greatly from area to area that a
straightforward formulation of their effect is not possible. State air officials should
be consulted to discover their interpretation of these rules and to negotiate the re-
quired offsets or increments.
HAZARDOUS AIR POLLUTANTS
The Clean Air Act further empowers EPA to set national emissions standards for
hazardous air pollutants (NESHAP). Designed with a safety margin, these standards
are analogous to toxic-effluent standards for sources of water pollution. No source
may be constructed or modified in violation of a national emissions standard for haz-
ardous air pollutants; nor may an existing source violate the standard, but EPA may
grant 2-year waivers for compliance. Unlike the situation that applies to toxic efflu-
ents, EPA may in this case delegate enforcement authority to the states, but it retains
standard-setting authority. States, however, may independently set standards for pol-
lutants not regulated under NESHAP, or set stricter standards for those that are.
To date, EPA has designated only asbestos, beryllium, and mercury as hazardous,
Permit requirements are not affected by NESHAP regulation; therefore, states may
require special operating permits for sources emitting certain pollutants, though EPA
does not. Rather than limit emissions, NESHAPs may define operating practices and
specific control techniques. These are mandatory and strictly enforced by both EPA
and the states.
ANCILLARY LAWS AND REGULATIONS
Although air and water pollution controls are by far the most commonly encountered
environmental problems for industries, there are other legal issues that may arise and
unexpectedly cause severe problems. The more common of these issues are environ-
mental impact, land use, solid waste, noise, occupational safety and health, and nui-
sance laws.
ENVIRONMENTAL IMPACT STATEMENTS
The National Environmental Policy Act (NEPA) requires preparation of an exten-
sive environmental impact statement (EIS) prior to the irrevocable commitment of re-
sources to any major federal action having a significant impact on the human environ-
ment. While NEPA applies to private enterprise only on the rarest occasions, it has
spawned several state laws, known as "little NEPAs." If a state has a little NEPA, it
may require its own EIS before state or local government will grant a permit to con-
struct a new industrial plant or to substantially modify an existing one. The plant man-
ager should be sure to find out if the state has such an act when a new or modified plant
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is to undergo construction, and if the act applies to private construction or governmen-
tal permits allowing private construction.
LAND USE LAWS
State land use laws and local land use or zoning ordinances have an impact on the
siting decision for a new plant and may affect the expansion or modification of an exis-
ting plant. Where the zoning or land use laws allow construction or modification, per-
mits to construct may be required; where they do not, exceptions, variances, and
amendments may be available for certain sites.
SOLID WASTE LAWS
Many states have laws regulating the methods of storage, collection, transporta-
tion, and disposal of solid wastes and sludges. (These are frequently generated in
large quantities by air and water pollution control equipment.) Local and regional
solid waste authorities may also have pertinent ordinances or rules. Besides the ob-
vious impact that these regulations have on industrial solid waste management prac-
tices, they may also become a significant factor in the choice of air and water pollution
control equipment. Disposal of collected wastes from some types of control equipment
may be much more difficult and costly than waste disposal from alternate methods.
State and local solid waste disposal regulations should be understood thoroughly before
management makes an irrevocable commitment to any particular pollution control
device.
Under the federal Resource Conservation and Recovery Act of 1976, EPA issues
regulations pertaining to the storage, transportation, and disposal of hazardous solid
wastes and requires permits for operators of hazardous-waste handling or disposal
facilities.
NOISE REGULATIONS
There are no federal noise regulations for industrial activities in general, only
noise standards for certain types of equipment. Few states have noise laws, but those
that do may significantly affect certain industries: most existing state laws have noise
standards that vary by time of day and by type of use of adjoining property. Local gov-
ernments frequently have noise ordinances, particularly within city or town limits.
The plant manager should be aware of noise laws or ordinances and take steps to com-
ply with them as with air and water pollution laws.
OCCUPATIONAL SAFETY AND HEALTH
The federal Occupational Safety and Health Act (also called the Williams-Steiger
Act), administered by the Occupational Safety and Health Administration (OSHA), sets
standards within the workplace for worker exposure to health hazards (such as chemi-
cals, airborne pollutants, and noise exposure) as well as safety hazards (such as lack
of railings, unsafe equipment, and slippery floors). The manager should determine if
OSHA has issued exposure limits for any contaminant likely to be found in any workplace
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within the plant and check to see that noise exposure limits and safety requirements
are met. OSHA has the authority to fine noncomplying firms. Some states have occu-
pational safety and health laws in addition to those set down by OSHA, and OSHA en-
forcement may be delegated to the states. These state laws and regulations should be
examined in the same fashion as the federal law.
THE LAW OF NUISANCE
The common law (i.e., court-made law based on precedent) of private nuisance, still
in effect in most states, permits a landowner to recover for a lessening in the useful-
ness of his/her property. In addition, some states have private nuisance statutes set-
ting specific grounds for recovery by injured parties (not necessarily landowners).
Under private nuisance law an injured party may recover damages from a polluting
plant, even if that plant is meeting all other applicable environmental regulations.
Public nuisance statutes (at the state level) or ordinances (at the local level) are
quasi-criminal in nature. They provide for fines and equitable relief (injunctions)
against the nuisance, sometimes even prison sentences for repeated violators. Private
parties can recover damages against public nuisances only if they can show extraordi-
nary economic damages not suffered by the public at large. Public nuisances may in-
clude air and water pollution, noises, odors, vibration, and even eyesores and! other
aesthetic blight.
Air and water pollution control laws have obviated much of the need for public nui-
sance actions against polluters, but the aggrieved private citizen living near an indus-
trial plant can still present a significant threat as a potential litigant against that plant.
Good public relations and amicable compensation of local residents affected by plant
emissions can avoid costly lawsuits.
15
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Chapter III
RELATIONS WITH OUTSIDERS
CONSULTANTS
Many companies will not have the in-house expertise to carry out a pollution con-
trol program. The question often, therefore, is not whether an outside consultant or
plant personnel provide the more efficient result, but whether the needed investment
in personnel training is more cost efficient than hiring an expert consultant,
A consultant should be familiar with all pertinent laws and regulations and their
enforcement; the various control options and their performance capabilities, limita-
tions, and cost attributes; and the problems (with appropriate solutions) encountered
in the practical integration of pollution control technology with plant processes.
Whether you should hire a consultant or not depends essentially on two operational
characteristics: (a) the extent to which plant personnel is trained and experienced in
technologies found in pollution control, and (b) the likelihood that the same or similar
pollution problems will be encountered again at this plant or in others that the company
owns.
The first of these characteristics largely determines the cost of additional training
to enable plant personnel to accomplish the task with results equivalent to those of a
consultant. The second determines the future use that can be made of the acquired
skills. The two characteristics together influence the approach management should
take.
If the initial job is large and the type of work is likely to continue, then you may
wish to consider hiring permanent staff. If, on the other hand, you decide that time
and cost of training and the subsequent use of the acquired capability do not merit
training either your own personnel or staff additions, a consultant is called for. If
your personnel work closely with a consultant, it is not unlikely that, after completion
of the first project, some of the skills and knowledge of the consultant will be assimi-
lated by your staff, thereby improving their skills to the point where subsequent proj-
ects might be adequately handled in-house or with a minimum of consulting assistance.
Let us say you have decided that the present state of training and the subsequent
needs for new skills are such that it is more cost efficient to obtain the services of a
consultant. The problem is then where to find a consultant and how to choose among
several candidates.
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LOCATING A CONSULTANT
Finding a consultant is considerably different from finding suppliers. Suppliers
often act in a consulting capacity in that they will offer solutions for some of your prob-
lems or recommend improvements on their equipment and systems. If, however, you
desire a broad spectrum of unbiased ideas you cannot rely solely on recommendations
of suppliers. A supplier is most skilled in his own equipment or in equipment having
features that compete with his product. He, therefore, may not have the desired tech-
nical breadth. There is also an unavoidable built-in bias in favor of his equipment.
Suppliers advertise in magazines and may use direct mail and sales visits.
Consultants, on the other hand, rarely advertise in trade media, but may place
professional cards in journals and technically oriented magazines. Many consultants
are professional engineers; in fact, many jurisdictions require engineering consultants
to be licensed by the state. Often the code of ethics of the professional engineer forbids
advertising except for professional cards, much as in the case of lawyers and doctors
(though recent Supreme Court decisions found advertising bans to be illegal restraints
of trade).
How then do you locate potential consultants skilled in your problem area? Here
are a few suggestions;
• Some states and EPA regional offices maintain lists of available consultants.
It is first wise to ascertain requirements for listing. In some instances, an
applicant must meet certain requirements before he is listed; in others, a con-
sultant gets on the list by simply stating that he wishes to be listed.
• Readers' abstracts normally available in libraries can help you locate consul-
tants; for example, Applied Science and Technology Index, Pollution Abstracts,
Selected Water Resources Abstracts, and Solid Waste Management Abstracts
and Excerpts from the Literature.
• If an author is frequently identified with a subject, he may be qualified to con-
sult, or he may recommend people who are available and appropriately qualified.
• Another way of finding a consultant is to contact your professional or trade
association for leads.
• Certain journals and magazines list consultants, sometimes arranged by geo-
graphical regions with their specialties noted. Some of these publications are
the Journal of the Air Pollution Control Association, Environmental Science and
Technology, and Pollution Engineering.
After you have found a number of potential consultants, you may have to conduct an
initial "geographical" screening. You normally will have to pay the consultant's travel
expenses, and most consultants include part or all of the time "away from the office"
in their fee. You may, therefore, be paying relatively unproductive fees if long travel
times are involved. Generally, if you have more than about four names, you should be
able to adjust the field of candidates by eliminating those consultants located at appre-
ciable distances from you.
18
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People are reluctant to question professionals about job fitness. How many
people do you know who select doctors or lawyers by interview? Most often a client-
professional relationship is initiated via another professional, or by suggestion from a
patient or client who liked the service the professional supplied. In the case of select-
ing consultants, this reticence to interview can be often overcome by using a reporting
form with which professional engineers and architects are generally familiar (e.g.,
Form 255 used by the federal government.) Or you may write the consultant that you
are attempting to select a consultant for services, describing in full the problem you
wish him to undertake, and requesting that he provide completed forms, together with
his fee structure. This method of initial contact will often overcome the face-to-face
dilemma and keep options open.
When you receive the data, examine it to ascertain how much past consulting work
the applicant has done on your particular type of problem or on closely related prob-
lems. Determine how extensive his experience has been on a particular activity listed
on the form. Consultants sometimes do not differentiate between the total job and their
contributions. You should specifically ask for his job breakdown in the cover letter.
Once you have the names and projects the consultant cites, you can contact the
clients noted. Look for experience as well as training. A person with extensive tech-
nical training and empathy with your problem may not serve you best; after all, you
probably have people on your staff with good technical competence and high enthusiasm.
What you are looking for is a consultant who, by virtue of training and experience on a
number of jobs with problems similar to yours, can bring pertinent experience to bear
on your problem in a cost-effective fashion,
WORKING WITH A CONSULTANT
After you have decided on the consultant and have a service arrangement, you will
want to have a kickoff meeting. Key plant personnel with whom the consultant would be
expected to collaborate should be at the meeting. Plant personnel can sometimes view
the consultant as a threat, especially if they feel that they should have been assigned
the work and the decision to hire a consultant was not theirs. The kickoff meeting,
therefore, should assure everyone that the project has the blessings of top management
and that results will reflect the degree of cooperation between plant personnel and the
consultant. A division of responsibilities should be made clear.
The extent to which the consultant will be used and the ground rules of the
consultant-client relationship should be thoroughly aired within the company manage-
ment prior to this first meeting, so that the division of responsibilities and duties can
be worked out at the meeting.
The areas in which a consultant can contribute cover the entire spectrum of a pol-
lution-control program. Starting with the emissions survey, the consultant could de-
velop conceptual designs, prepare bids and specifications, evaluate proposals, assist
in letting subcontracts and purchase orders, and, if called on, follow through the in-
stallation process. In many fields, consultants are brought in only to present spot in-
formation on a particular topic. In pollution control, however, it is not unusual to find
19
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consultants involved from the conception of the project through the initial operation of
the system. In some instances, the consultant is assigned overall technical and per-
formance responsibility for the job.
To properly fulfill his duties, a consultant probably will need access to production
figures, raw material information, and process details. Best results are obtained
when plant personnel are candid and give complete data to facilitate the consultant's
work. Sometimes the consultant may receive information that the company considers
confidential.
The problem for the company is that the consultant-client relationship does not
receive the same legal\protection as the attorney-client relationship. Because infor-
mation that a client divulges to a consultant is not privileged, the consultant may be
required to testify to what a client has disclosed to him. The consultant may not, how-
ever, divulge such information to some third party without a legal compulsion to do so;
such disclosure would violate the implied contractual terms of the agency relationship
between the consultant and client, subjecting the consultant to liability for damages the
disclosure causes. Explicit agreements not to divulge confidential information are
frequently included in consulting contracts, however. Your company lawyer can frame
an appropriate agreement.
ATTORNEYS
It is a rare company indeed that does not use the services of an attorney with some
regularity. In deciding which pollution control measures to take (negotiating compliance
schedules with regulatory agencies, interpreting pollution control and administrative
regulations, drawing up sales contracts), the company's attorney frequently provides
assistance unavailable from nonlegal advisers and performs tasks that management is
generally incapable of. Not all lawyers, however, are equally competent in solving
pollution control problems.
As the fields of law have become increasingly complex, the natural tendency of the
legal profession has been to specialization. Although any attorney is theoretically qual-
ified to answer legal questions in any field of law, those legal advisers most often relied
upon by businesses have specialized in taxation, corporate law, securities regulation,
labor law, and contracts. Since environmental law is every bit as complex and special-
ized as those fields, ordinarily it will be to the company's advantage to engage an attor-
ney specializing in environmental law for comprehensive advice. Not only will the
specialist be able to answer questions with less preparation and research (thus saving
the client money), he/she will also be more conversant with the control technology re-
quired and will have extensive contacts with the regulatory agencies. In this field, as
in most other professions, there is no substitute for experience.
To a certain extent the functions of the consultant and the attorney may overlap.
Both should understand the applicable regulations; both deal regularly with the enforce-
ment agency. When a company hires a consultant in pollution control, that consultant
may assist the company's regular attorney in performing those tasks requiring
20
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specialized knowledge. Bid packages, for example, should contain provisions for ac-
ceptance tests equivalent to the state enforcement agency's compliance testing proce-
dures. While a business attorney may not realize this, a consultant would alert the
attorney to include such provisions in the bid package and sales contract.
If the technical work is to be done by in-house staff, an attorney experienced in
pollution control should be retained to assist management. (The attorney ordinarily
used, even staff counsel, may have the necessary experience, of course.) Many of the
attributes described for consultants hold also for environmental lawyers, except for
technical expertise in designing, installing, and testing the pollution control equipment.
Just as the consultant should be chosen to complement the company's in-house technical
and management capabilities, the lawyer should be chosen to complement in-house legal
and management capabilities.
LOCATING AN ATTORNEY
If management decides to retain an environmental lawyer, the next problem is how
to find one. Some sources are suggested below:
• Most county bar associations have Lawyer Reference Services, which match
potential clients with participating local attorneys. Attorney listings are usually
classified by specialities or fields of interest.
• The company's staff counsel or business lawyer may be able to recommend a
specialist or to find one through contacts not available to management.
• Most large law firms have at least one attorney knowledgeable in environmental
matters.
• The environmental agency may informally advise a company of some environ-
mental lawyers with whom they deal. (It is highly unlikely that the agency has
a formal list of lawyers or will recommend one, but they may give out the names
of several as a personal favor.)
• Professors of environmental law at law schools may have private practices
themselves.
In rural areas with small bar associations it is possible that none of these methods
may turn up a properly qualified individual. Therefore, an attorney from another area
may be obtained or a consultant hired to assist nonspecialized counsel. Distances from
the nearest environmental lawyer and consultant may determine which option is more
cost effective. The consultant should be brought in only to provide regulatory and
management assistance at a cost lower than that for a full range of technical and man-
agement assistance.
Assessing the qualifications of an attorney is difficult, especially for a nonlawyer.
It is possible to request the attorney to quote an hourly rate and roughly estimate the
total number of hours that will be required to complete the necessary work. Attorneys
will not tell you who their clients are, however, since this information may not be di-
vulged. Although the question is seldom asked by prospective clients, attorneys may
discuss the types of cases in which they have experience.
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Any information disclosed to an attorney by a client is absolutely privileged; such
information cannot be obtained from the attorney by discovery procedures in civil liti-
gation, by subpoena, or by testimony in court. One significant tactical advantage in
having an attorney rather than a consultant deal with regulatory agencies, then, is the
protection given information divulged to the expert.
REGULATORY AGENCIES
An important aspect of pollution control efforts involves the relationship of the
company to the regulating agency. This relationship can range from total cooperation
to a formal adversary position. The stance your company should take can only be de-
cided by company management.
INTERPERSONAL RELATIONS
Enforcement authorities in general have some flexibility in interpreting regulations
and particularly in determining schedules for achieving compliance. Agreement on
areas where some discretionary latitude is available is enhanced if the company pre-
sents carefully thought-out arguments based on technical and economic facts. General
gripes about, for example, the "ecological movement" or the "outrageous costs involved"
will not be nearly as persuasive as a rational, substantiated argument lucidly presented.
As in many interpersonal relations, your frame of mind often permeates the dis-
cussions and affects results. If you assume the regulatory authority has singled you
out for arbitrary and capricious enforcement, it would not be surprising to see the mat-
ter end up in adversary proceedings. If your attitude is that the best course is a coop-
erative one, if you expect the authority to react rationally to accurate and persuasive
technical and economic arguments, then the chance is better that the discretionary
finding will be equitable. Of course, if this cooperative approach does not yield satis-
factory results, appeal rights and other remedies can be sought.
ADMITTANCE TO THE PLANT
Personnel from KPA and state enforcement agencies should be given access to the
plant, its grounds, and the required records. Refusing such access to authorized in-
spectors can only create needless ill will. Moreover, EPA can issue orders or obtain
a court order to admit its inspectors. Violating such an EPA order may result in a
fine; violation of a court order is contempt of court. Refusing access to state inspec-
tors may also result in fines, court orders, or loss of operating permits.
VOLUNTARY COMPLIANCE VS. DELAY
Management should not wait passively for enforcement actions to be instituted be-
fore taking measures to correct pollution problems. While it may be tempting to delay
such expenditures as long as possible, or to gamble that an inspection will not occur,
such benefits as may accrue could ultimately prove to be false economy. When com-
pliance must be achieved under the threat of enforcement actions, costs can go up
22
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dramatically with shortened times for contracting, construction, debugging, etc.
Conversely, efficiencies and economies can be realized by moving at a more leisurely
pace, in advance of pressures from enforcement agencies.
Such advance measures also create a more favorable impression of the company
within the agencies, among the company's own employees, and even with the general
public. This is more than a triumph of style over substance, since the resulting good
relations with the enforcement agencies may provide actual substantive benefits.
CONSENT ORDERS
A consent order or compliance schedule (the two terms are often used interchange-
ably) is an agreement negotiated between a government agency and a regulated company.
The company agrees to take specifically detailed steps to correct some violation of the
agency's regulations. In return, the agency agrees to forebear prosecution for those
violations so long as the company meets the commitments it made in the consent order.
Technically, a consent order is an administrative order issued by a regulatory agency;
it usually includes a compliance schedule specifying goals or milestones and dates.
Compliance schedules may also be included in NPDES permits and state operating per-
mits, both for air and water.
While consent orders can provide significant benefits for both the agency and the
polluter, the manager should be aware of some dangers they present if their import is
imperfectly understood. A company that is in the midst of an agency enforcement ac-
tion or investigation may be tempted to make optimistic promises in a consent order
just to achieve a temporary respite from the agency's "heat." Succumbing to this temp-
tation, without fully understanding the effect of such a consent order, can have serious
repercussions.
Violations of the terms of a consent order, or failure to meet the goals of a com-
pliance schedule in a timely fashion, gives the enforcement agency separate grounds
for prosecution, quite independent of, and in addition to, the underlying violation on
which the order was based. Moreover, since the consent order typically describes
specific remedial actions to be taken, the company's failure to adhere to this consent
order is comparatively easy to determine and to prove in court. Therefore, defense
against a resulting prosecution becomes correspondingly more difficult.
These potential legal consequences of consent orders should not deter management
from entering into them; but they should be carefully negotiated from a position of great
knowledge about the available control options, particularly their technological capabil-
ities, their costs, and the time constraints on design and construction of the control
systems. Management should determine the least-cost control method that will enable
the plant to meet all applicable regulations, then obtain time estimates from the equip-
ment vendors, and only then negotiate a consent order with the enforcement agency,
being adequately armed with the information necessary to strike a fair bargain. This
methodology reinforces the advisability of initiating a voluntary compliance program
rather than delaying and awaiting enforcement action.
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APPEALS
Appeal procedures are available to test the legality, constitutionality, and ration-
ality of agency rulings and orders. Generally the agency will have internal review
procedures providing at least one, sometimes two or three, levels of appellate review.
Consent orders are generally not reviewable, since they are mutually agreed upon and
are considered to be a hybrid between an order and a contract. Administrative appeals
may be heard by a higher ranking bureaucrat, an appeals board, or an administrative
law judge.
Once administrative appeals and rehearings have been exhausted, appeals to state
or federal courts are permitted by various administrative procedure acts, state and
federal constitutions, and common-law principles.
It is important to note dealines for filing appeals. These deadlines are strictly
enforced, so appeals must be filed within the time limit provided or the right to appeal
will be lost.
If an order is being discussed with an agency to have the agency modify its terms,
the manager should file the appeal before the time limit expires. If the rehearing is
not granted or the negotiations ultimately fail to solve the company's problem, the right
to appeal will then not be precluded; if the negotiations are successful, the appeal may
be dropped. As a matter of tactics, filing the appeal may also encourage the agency to
negotiate a settlement more quickly (before the appeal must be heard).
OVERLAPPING JURISDICTIONS
Overlapping between the jurisdictions of different agencies dealing with pollution
control is not rare. For example, in states which have not been delegated the authority
to issue NPDES permits, obviously they must be obtained from EPA. However, these
same states also have the right to require their own discharge permits and to enforce
their own effluent limitations. Situations can also arise in which compliance with reg-
ulations for one kind of pollution violate others. Meeting an air pollution regulation,
for example, may result in the violation of a solid waste disposal regulation.
Accordingly, care must be exercised. Problems arising from such causes should
be brought promptly to the attention of the cognizant regulatory agencies.
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Chapter IV
THE POLLUTION CONTROL PROGRAM
MANAGEMENT TIMING
Industrial management is accustomed to calendars of events that are time oriented,
such as entry into new markets, when to adjust inventories, when to act on tax matters,
etc. A prime example of such an activity, pollution control management, involves
three important time-oriented factors:
- - initiating a pollution control program;
- - meeting mandated deadlines; and
-- handling delays in system acquisition.
Management usually has some freedom in choosing its day of decision. For this
reason, arguments are often advanced for delaying a company pollution control pro-
gram until the last minute. Aside from the vain hope of escape, or at least a tempo-
rary respite from enforcement, it may be argued that public pressure may reduce the
regulations in severity and enforcement. Another argument (with some analytical base)
relates the decision to alternative investments—if financial commitments for pollution
control are delayed, the same funds could be invested in an interest-bearing account or
a capital alternative which would produce an important return on investment. In prac-
tice, however, there are countervailing arguments in favor of initiating a program at
an early stage.
That there is any management leeway owes its existence to the time required in the
administrative process. It takes an appreciable amount of time to formulate regula-
tions, and additional time to contact industries and initiate enforcement actions. This
time varies from several months to perhaps one or two years. During this interval,
management is aware of the impending necessity of pollution control investment and has
the freedom to act or not to act. There are five important aspects, discussed below,
that should bear on management's decision.
The first is that plans can be initiated at an early stage, while capital funds are
withheld until the technical requirements are sufficiently reliable to specify and buy
equipment and enforcement is imminent.
Second, process changes can frequently be employed which will reduce the cost of
needed control equipment, and in some industries may even be sufficient to meet regu-
lations. In the past, process changes lacked appeal in part because of the federal In-
ternal Revenue Code, which, although permitting amortization of a pollution control
system within 60 months, irrespective of the asset depreciation range of the equipment,
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did not accord process changes the same advantage. The tax code further reduced the
appeal of rapid amortization by making rapid amortization and the investment tax credit
mutually exclusive. In 1977, for the first time, the revised tax code permits an indus-
try to take rapid amortization and, at the same time, one half of the investment tax
credit. Process changes qualify under the new law for rapid amortization, making such
changes more attractive from a tax standpoint.
Process changes, however, often require a long lead time. They can be highly in-
volved from an engineering point of view; or the specific change may appear superfi-
cially uncomplicated, but it may cause subsequent problems in process operations.
For example, take the case of changing from solvent coatings to water base coatings:
coefficient of rolling friction of the finished coating would be altered, and this could
impair the mechanical movement of the container or coated material in the production
lines. Therefore, although process changes are attractive, they often require consid-
erable study time to ensure that the changes do not bring about deleterious side effects
and that equipment and tax savings potentials are fully realized. If a company refrains
from initiating a program until it has been cited for a violation, the process change
alternative may not be a viable route.
Third, in addition to allowing more time to study the choice of a process change or
control equipment, an earlier start offers a longer period for personnel training. This
training can be of greater extent and depth; training can be better fitted into the em-
ployees' schedules, and employees can be better trained to collaborate with consultants
or other outsiders (see Chapter III).
Fourth, a careful cash flow analysis should be made. The cost of equipment and
services sometimes escalates faster than the net-of-interest income minus taxes plus
operation expenses. This can be seen from Figure 1, which shows increases in the
type of costs that would be encountered in pollution control systems, either control
equipment or process changes, over the period 1972-76. In three of these years (the
exception is 1973), an analysis of acquisition costs would indicate that purchase of the
needed control equipment would be preferable to delaying purchase and then investing
the funds in a short-term interest account. Where operating expenses due to energy
and materials costs are appreciable, however, escalating acquisition-cost effects are
much less forceful in the decision process.
It can be argued that the comparison should be made with an alternative capital in-
vestment, since the return on investment may be greater than the interest income minus
taxes. However, the short time span available to management (usually less than two
years) would effectively mean a comparison between simultaneous rather than alterna-
tive capital investments for pollution control and another capital investment.
Fifth, control regulations, rather than getting easier with time, often get stiffer.
Although there are some instances where regulations became less strict, as in water
regulations for the plating industry, this is an exception to the general rule. Each
industry should assess the direction the relevant regulations are moving in, but defi-
nitely it should not be assumed that they will get easier with time.
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Index
Bureau of Labor Statistics
Wholesale Prices and Price Index
General Purpose Machinery and Equipment
Pumps & Compressors
Electrical Machinery & Equipment
Motors, Generators
Chemical Engineering
Plant Cost
Equipment, Machinery
Engineering & Supervision
Marshall & Swift Equipment Cost Index
Survey of Current Business
Dept. Commerce Construction
Cost Composite Index
American Appraisal Co.
Construction Cost Ave , 30 cities
Atlanta
Boeckh Construction Cost Index
Ave. 20 cities - Commercial & Factory Buildings
Engineering News Record
Construction Cost
Building Cost
Engineering News Record
Common Labor
Skilled Labor
Bureau of Labor Statistics
Employment & Earnings
Contract Construction
Special Trade Construction
Electrical Work
Price Index
June
1972
122.7
124.2
110.6
123.3
136.5
135.4
111.9
4th quarter
1972
336,7
June
1972
137
1367
1545
May
1972
144.2
June
1972
1726.15
1038.43
Percent Increase Over
June
1973
3.7
2.8
1.9
4.5
5.9
5.0
16.0
June
1974
17.3
15.7
7.0
7.0
14.0
20.8
2.3
Preceding
June
1975
19.4
26.8
16.4
26.6
9.7
12.3
5.9
Year
June
1976
6.6
5.7
3.6
8.9
6.2
6.5
7.5
4th quarter 4th quarter 4th quarter 2nd quarter
1973
3,8
June
1973
10,2
11.3
13.5
June
1973
7.7
June
1973
13.6
9.5
Labor
3437.63
1629.94
$5.97
6.42
7.02
8.5
5.8
6.4
2.2
6.0
1974
10.5
June
1974
14.6
5.5
4.3
June
1974
12.2
June
1974
3.8
8.3
Cost Indexes
6.2
7.1
5.0
8.8
4,0
1975
16.7
June
1975
9.8
6.5
2.2
May
1975
7.7
June
1975
11.1
6.9
13.1
7.9
7.6
5.9
6.3
1976
4.0
June
1976
4.7
7.3
5.9
May
1976
9.3
June
1976
6.2
7.5
5.8
7.6
5.8
5,3
8.1
Figure 1. Price Increases Based on Certain Indices
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As an example, take the new source performance standards for air pollution. For
plants modified or newly constructed so that they have a potential of emitting more un-
controlled emissions than heretofore, the new codes are generally stiffer than the av-
erage of the regulations in state implementation plans. This tendency toward tougher
regulations is also evidenced by the methodology the government uses to select, from
a great many possible industries, those for which new source performance standards
(NSPS) should be developed. As these standards take a considerable amount of tech-
nical and economic study, only about six industries can be covered per year. One
criterion that EPA applies in its choice of industries is the improvement in air quality
that a new regulation would bring, as compared to the specifications of the average
state regulation. Therefore, plant management can generally be assured that the reg-
ulations of the NSPS will be more strict than the regulations faced by a plant constructed
or modified before the promulgation of the standards. If a new plant or modifications
are contemplated, it generally would benefit management to initiate construction prior
to the date a new source performance standard is promulgated.
The foregoing discussion assumed that management had some latitude with regard
to timing. We now turn to the problem of meeting mandated deadlines. There are at
least three unique deadlines that call for pollution control strategies:
-- deadlines for filing appeals;
- - deadlines for advising of tests and filing of permits and reports; and
-- deadlines for special tax treatment.
Compliance and abatement orders, or stipulations set in a permit, can be issued by
state, local, and federal levels of government. These issuances, hereafter referred to
as orders, frequently contain a statement as to the right of appeal and the appeal dead-
lines. In other instances, the order may merely state that it is made pursuant to a
particular regulation; and, in this case, the appeal period would be set forth in that reg-
ulation. There is no leeway in these matters: An appeal must be made within the dead-
line specified in the regulation, or the right of appeal is forfeited.
Regulations frequently call for performance tests to prove that the process has
been adequately controlled. The regulations may require notification of state or federal
personnel so that they can view the performance-testing operation. For instance, under
most new source performance standards, the company must notify the EPA regional of-
fice 30 days prior to the acceptance test. If an acceptance test depends on weather and
production needs, such as in some batch processes, there may be uncertainty as to
whether the test will take place on the date scheduled. If this is the case, the regional
office should be notified of a proposed date, with a notation that conditions may make it
necessary to alter the stated date, and that the date will be reconfirmed when the test
date draws nearer. If the test is conducted without providing for government oversight,
the test results may not be approved.
The tax laws also may require that certain actions be taken within a prescribed
period. For instance, the coverage afforded by a small business loan to finance an
air pollution compliance investment depends on the date the federal government and
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the state acted with respect to air pollution control. As another example, for a con-
tractor who financed a pollution control program initially from working capital, there
is a deadline date with respect to his ability to refinance these expenditures. The in-
vestment tax credits and rapid amortization provisions also have effective dates that
may affect management choice.
Next, we turn to the problem of handling delays in the receipt and installation of
equipment. This is, of course, not a new problem for management. The unique aspect
with respect to pollution control is that delays in receipt and installation of control
equipment may result in fines assessed by state or local regulatory officials. Conse-
quently, there is a greater need for reducing delays and protecting the company if
delays do occur.
A realistic delivery schedule for equipment and installation is the first step in pro-
tection. By early initiation of a pollution control program, as previously advocated,
there is a good chance the compliance deadline will be appropriately longer (with a
safety margin) than the proposed delivery period. However, this built-in safety feature
has a practical limit. The next recourse is to include contract provisions that protect
the company if the program is not completed within the specified period.
As one approach, the supplier can be offered a financial incentive to perform on
time. The strongest incentives come from provisions that impose pre-agreed financial
penalties for delays. This usually takes the form of a "liquidated damages" clause.
Under such a clause, a given slippage in delivery means that a pre-agreed amount of
money becomes due from the supplier to the company, usually as a deduction from the
original purchase price. Unfortunately, there are two serious problems that beset
liquidated damage clauses. First, they are not looked upon favorably by the courts,
and therefore frequently end up to be legally unenforceable. Second, suppliers are
generally extremely reluctant to agree to such clauses—they do not want to waive in
advance their right to rely on whatever legitimate excuses they may have, if and when
delivery delays occur. Moreover, damage clauses are really not so good as timely
delivery. Therefore, whether or not such clauses are agreed to, additional techniques
can and should tae used in every case.
There are three principles that can minimize the risk of delays in equipment de-
livery and installation:
-- contractual emphasis;
- - intensive purchasing follow-up; and
- - strict adherence to company obligations.
At the time of contract signing, the general contractor and/or the principal sup-
pliers must be impressed with the necessity for timely delivery. To that end, clauses
should be included in the contract which (a) clearly state that time delivery is an of-
the-essence feature of the contract, and (b) bind the supplier to pay any fines that may
be imposed by regulatory agencies if the equipment is not installed and properly work-
ing on the compliance date. Such clauses should not be hidden under the general terms
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and conditions of a contract or purchase order, but should be conspicuously set out in
the contract document; they should be further emphasized in a covering letter and in
verbal exchanges noting the presence of these provisions.
Intensive follow-up action after purchasing can keep the company informed as to
the scheduled pace of production for the various pieces of equipment. Periodic checks
for confirmation of shipping dates should be made, and written correspondence should
be directed to key officers of the supplier if delays are indicated. In this connection,
it is wise to expressly provide, in the original contract, that the company shall have
the right to check on such production progress, including the right to physically inspect
the production sites if it is so desired. Without such contract provisions, the supplier
would be under no obligation to provide information that is necessary for the company
to assess progress.
Production schedules also can have processing stages which require the purchaser
to take certain actions before the supplier can proceed to the next stage. For instance,
the company must frequently approve supplier's drawings, choose among various tech-
nical alternatives, and provide certain services as, for example, gas, power, water,
compressed air, and test facilities. These requirements should be scrupulously ad-
hered to, because any slight delay in company performance of its responsibilities could
be seized upon as justification for a contractor or supplier delay, and perhaps as the
basis for an added-cost claim. If verbal approvals are given, they should, without
fail, be promptly confirmed in writing, with the verbal date of approval stated in the
confirmation. Again, provision should be made in the original contract for these spe-
cific obligations of the company, so that misunderstandings—which usually lead to de-
lays—cannot arise. Likewise, to avoid the conflicts that classically arise when verbal
transactions are relied upon, the contract should clearly provide that the supplier is
entitled to respond only to written approvals.
TURNKEY VS. COMPANY INTEGRATION
A turnkey contract, as defined in Dictionary of Scientific and Technical Terms
(McGraw-Hill, 1974), is
A contract in which an independent agent undertakes to furnish for a
fixed price all materials and labor, and to do all the work needed to
complete a project.
This approach has a higher appeal for pollution control than for other capital buying.
There are three reasons why this is so: (a) the technology involved is generally foreign
to the company's normal production interests; (b) the performance of the system must
satisfy a third party (the government); and (c) there are generally several very different
control strategies with complicated trade-offs to be considered.
The goal in turnkey operations is to place the responsibility for system performance
on one party and/or to reduce the time drain on company personnel. The turnkey con-
tractor obviously will adjust his price to reflect the added risk he must assume.
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In a true turnkey operation, a single contractor assesses the company process,
determines the control system needed, and obtains, installs, and acceptance tests the
system. Subcontractors may be used, but the turnkey contractor retains the respon-
sibility for performance and has complete management and technical authority.
While this concept of a total turnkey operation is appealing, because it theoretically
does not divert management's attention and carries little risk, it is difficult to imple-
ment. A potential contractor cannot afford to pre-analyze the regulations involved and
your process and effluent problems without remuneration, and, without such data, he
cannot estimate the cost to supply and install a turnkey operation covering the necessary
performance and warranty provisions. On the other hand, the company would like to
have several turnkey proposals. There are two ways out of this Alphonse-Gaston act.
One way is to offer small contracts to several potential turnkey contractors, where the
funded effort would result in development of the needed data plus a turnkey proposal for
the necessary control system. This approach is utilized by the federal government in
its so-called two-step procurements, and less frequently inthe'commissioning of sculp-
ture and buildings.
Another approach is to compromise the concept of total turnkey by dividing the
work into two stages, the first including what will be defined later in this chapter as
the "conceptual design, " which leads to the "procurement package. " The second stage
is a turnkey operation based on the procurement package. The concept of a true turn-
key obviously is compromised, since one party prepares the concept design and pro-
curement package and another undertakes to supply and install a system based on the
procurement package. There has been a split in authority and risk, but only at one
point.
The two-stage arrangement is the most common approach to turnkey contracting
found in pollution control programs in all but the largest installations. While there is
some compromise of performance responsibilities with a resulting risk, it consider-
ably lessens the problem of divided responsibilities as compared to the situation where
a number of contractors are involved, all separately controlled by the plant.
If a company feels it has the management capabilities and the available staff time,
there is no reason why the control program could not be handled in-house, with com-
pany personnel responsible for specification, engineering, equipment, and installation.
If several such programs are envisioned, the first can serve as a training base for fu-
ture procurements. If such training and experience would bring no, or little, future
benefits, the assumption of risk and staff time involved in an in-house effort may tip
the scales in favor of a turnkey operation.
THE CONCEPTUAL DESIGN
The conceptual design consists of five parts:
1. A delineation of the regulation(s) that must be met;
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2. A report of the effluent flow and contaminant(s) loading as a function of process
conditions (results of a survey);
3. A process flow sheet showing pertinent process operations, raw materials
consumed, fuels used, utilities available, etc.;
4. Accurate plan and elevation views showing location of existing buildings and
pertinent equipment, with preferred location(s) for any end-of-line control
equipment; and
5. A description of likely process or end-of-line control strategies with a general
description of their advantages and disadvantages.
The conceptual design does not solve problems. Its purpose is to accurately define the
problems and preview some solutions—in other words, the cornerstone of a good con-
trol strategy. It forms the basis of a procurement package which is used in securing
proposals and as an aid in evaluating the proposals received.
DELINEATING THE REGULATIONS
A thorough understanding of the regulations—which ones apply, what they mean,
how they affect a particular plant—is a prerequisite to developing the conceptual design.
Without this understanding, the potential for mistakes is high. This may seem obvious,
but a few examples may serve to underline the importance of this point. Below are five
known cases in which company resources were wasted because the regulations were
misunderstood, either through incomplete discovery or improper interpretation:
Case 1
Air pollution control equipment was purchased under a guarantee based on regula-
tions in the supplier's state. After installation, it was found not in compliance with the
requirements in the buyer's state. Thus the control equipment worked as guaranteed,
but could not meet the applicable requirements. The matter went through costly
litigation.
Case 2
A wet scrubber system was purchased by a plant's management because it had been
successfully used to control air pollution at a similar sister plant in another state.
After the system was installed, it was discovered that the planned wastewater discharge
from the system to an abandoned quarry was forbidden by state regulations, even
though this same practice was perfectly acceptable in the state where the model plant
was located. Additional water processing was required before discharge, including pH
conditioning, flocculation, and settling processes, making the system's total capital
and operating costs higher than other equipment choices open to management before
they made their unfortunate purchase.
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CaseS
An air pollution control system was purchased under a supplier guarantee that the
system would meet the state regulations where the plant was located. After installa-
tion, it was discovered that the emission source was also covered by the federal new
source performance standards (NSPS). Extensive modifications were necessary to
meet the more stringent requirements. The sum of the original equipment costs plus
modifications, if known prior to management selection, would have resulted in a differ-
ent equipment choice.
Case 4
An installed air pollution control system was tested by a company based in another
state. After testing, the results were disallowed by state reviewers because the test-
ing company had followed the state regulations of its home state, which permitted dif-
ferent methods and test equipment, rather than the ones specified by the state in which
the client's plant was located. The test had to be repeated with the plant paying tor the
additional testing.
Case 5
A new plant was located at a certain site because it was assumed the plant wastes
could be discharged directly into the municipal sewer. The site had been chosen in
part because the plant had a high hydraulic load and the costs of on-site treatment
versus direct discharge to an existing sewer system swung the decision to the selected
location. It was later discovered that, under federal procedures, the plant's effluent
was not compatible, industrial sewer rates were higher than contemplated, and re-
course to total on-site treatment was necessary. (Pretreatment and sewer rates were
higher, and the wastes were incompatible with the municipal sewer plant operation.)
Had a proper investigation been made of the regulations regarding compatible/incom-
patible wastes, several other sites with more favorable labor or transportation rates,
which were outweighed at the time by the supposed water-treatment advantages, would
probably have been selected.
POLLUTION SURVEYS
After the regulations have been assembled, and those pertinent to your problem
studied and understood, the next step in developing a conceptual design is a survey of
the effluents produced by the plant—the pollution survey. The objective is to identify
pollution sources that contribute to waste loads, together with the effect of process
variables on the waste stream created by these sources.
Pollution control systems for both air and water are usually designed for worst
process conditions, i.e., greatest flow, highest levels of and most toxic contaminants.
Steps that reduce flow or lower contaminant levels are therefore attractive up to a
point where further reduction is more expensive than installing a given size or effi-
ciency control device. In some instances, effluent reduction is a viable way of meeting
regulations without recourse to control devices.
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If pollution peaks in plant processes are encountered, either in flow or concentra-
tion, it usually pays to analyze process adjustments that will reduce the load. These
conditions are somewhat analogous to the role of peak-demand charges in a plant's
electrical expenses—they are of short duration, but have a pronounced effect on costs.
A necessary first step is to quantify a plant's present flows and pollutant load.
Plants usually keep detailed records on such matters as production rates, rejects, and
material costs, but may not have adequate data on flows and pollution loading. This
missing data must be supplied by a pollution survey. The identification of pollution
sources is usually straightforward. Characterizing the contribution of the various
sources with respect to process variables is much more difficult; the alternative is to
do it or to risk serious future problems. Process effluent variables, such as type of
pollutant, concentration, and changes in volume or temperature of plant conveying
stream (gas or hydraulic load), could cause control upsets if not recognized and planned
for in the control strategies. Such upsets (failure to perform because of overload) may
cause one or more of the following:
- - failure of the control system to control the process effluent in accordance
with the regulations;
- - reduction in production throughput;
- - upstream effluent problems caused by undesirable mixing (water) or "puff-
back" (air); and
-- increases in maintenance costs.
Who is to perform the survey? As a practical matter, candidates are limited to
plant personnel, an outside consultant, or a prospective supplier. The alternatives
have advantages and disadvantages that management must evaluate in light of the com-
pany's particular needs and capabilities. Here are some pros and cons to consider:
• A survey by company personnel is advantageous because company personnel
possess better knowledge of the process through experience; and if special
equipment or skills are not required, costs compared to hiring consultants are
likely to be less. The disadvantages are that: (a) company personnel may not
know what factors are important to the subsequent selection and successful op-
eration of the control process, and may therefore not optimally match the sur-
vey to the needed design data; and (b) if special skills or extensive test equip-
ment are required, the costs may be higher than hiring a consultant.
• A survey by an appropriate consultant has two advantages: (a) the consultant
has better knowledge of the types of data needed to select the proper control
system from the variety of possible approaches; and (b) the final recommenda-
tions result from broad experience with a number of approaches, and there is
no inherent reason for the opinions of consultants to be biased. There are also
two disadvantages: (a) the survey expense is likely to be higher than having the
survey performed by plant personnel or prospective supplier, unless very spe-
cial skills or equipment are involved; and (b) the plant might rely too heavily
on the consultant.
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• A survey by a prospective equipment supplier has these advantages: (a) it is
less expensive than a survey by plant personnel or consultants, unless very
special skills or equipment are involved; and (b) a supplier knows what process
factors are important with respect to its own equipment design and selection.
There are two disadvantages: (a) the supplier has a probable bias towards his
own products; and (b) the supplier may not perform a thorough analysis unless
reasonably assured of the equipment order.
Once a survey is made, the manager should examine the results carefully before
committing the company to a control strategy. He should remember that the goal is to
smooth out and reduce total flow, which will save on control expenses and reduce the
likelihood of future upset problems. There are a number of data checks and balances
that should be utilized.
The manager should ask that the data be presented in both graphical and tabular
form. For example, graphs showing flow and pollution load on the vertical axis and
time on the horizontal axis give a quick feel for peak conditions; the accompanying
tabular format allows examination of quantitative data without having to read constantly
from the graph. It is also good practice to look at the original data sheets as well as
the data presentation, to make sure the presentation is a faithful reproduction of what
was measured (more on this later).
It is good practice for the manager to arm himself with a few benchmarks, which
he can use in assessing the accuracy of the data given in the survey. This serves as a
rough data check and keeps the involved technical people on their toes. For example,
suppose a graph indicating total fluid load is fairly constant or gently undulating with
time; in this case, the measurement accuracies submitted in the survey can sometimes
be checked in rough fashion by comparing the flow for the period tested with past water
use charges (for the billing period, gallon usage divided by the same time interval with
nonworking days eliminated). Likewise, gas flows reported in the survey may have
been obtained from velocity traverses; such flow data can be compared with rough fig-
ures obtained from a fan manufacturer by telling him the rpm of the fan, the gas tem-
perature, the system pressure drop, and the fan model number.
Another important point to check is sampling efficiency. Was the survey conducted
over a sufficiently long period of time so that long-term changes are reported? At the
same time, were individual test periods short enough to resolve peaks? To get a rough
feel for long-term variations in water flow, list water use charges (and sewer charges
separately, if available) by month over a representative period, say on the order of a
year. If there are time-span differences in the billing periods, the figures should be
adjusted. In addition, you can discuss likely differences in flow and contaminant load-
ings over time with plant operating personnel. If, for example, it is decided that a
month is a sufficiently long period to make observations, the next question is how fre-
quently the waste streams are to be sampled.
Collecting twenty-four-hour composite samples is an approach to getting what, in
effect, is the value that would be obtained if all of the wastewater were collected over a
24-hour period, mixed thoroughly, and a resulting or composite sample taken. These
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composite samples are often called for in water regulations, and should be reported in
a wastewater survey. It is also important to have a "grab" sample of the wastewater,
representing conditons at that instant. The government-issued NPDES permit will
probably be based on both a daily maximum value and a 30-day-average value. This
means the survey and subsequent controls must work together to meet both these
values. NOTE: The EPA Methods Manual (the bible on conducting wastewater surveys)
recommends that, for technical-sampling reasons, only grab samples should be used
for oil and grease pollution; composite samples are not acceptable.
How accurate should the survey strive to be? This accuracy question essentially
consists of two parts. The first is a statistical measure, called sampling error. This
error comes about because the flow is "sampled," and is related to how frequently,
where, and at what intervals the samples are taken. It is somewhat analogous to the
science of quality control, which can be accomplished by statistically sampling produc-
tion. To reduce this sampling error, you may wish to seek the services of someone
with statistical experience to assist in the survey design, even if the actual survey is
to be conducted by your own personnel.
The other part of the accuracy question is measurement error. This includes in-
herent or equipment-based errors and subsequent storage, transportation, and analysis
of specimens. The latter errors can be controlled by proper equipment selection and
sample handling techniques. Note that survey accuracy costs money, and the accuracy
required in the survey should be commensurate with the job of control equipment selec-
tion. Since control costs for equipment and operation go up in definite increments,
survey accuracy need be no better than the smallest necessary increment in equipment
cost and operation for various equipment capacities.
In determining the survey accuracy needed, you must have a fair understanding of
equipment costs related to the parameter you wish to measure. A comparative example
is given in Figures 2 and 3, Figure 2 is a curve for capital cost for direct flame incin-
eration. An error of ±20% in gas flow, at 5,000scfm, would correspond to a cost-span
difference in installed price of about $13,000. In the case of an adsorption system, as
shown in Figure 3, the same error of ±20% at 5,000 scfm would cover about $37,000.
At 30,000 scfm, the same ±20% error would have cost-span differences of, respectively,
$17,000 and over $110,000. This information is presented in tabular form below:
5,000 SCFM 30,000 SCFM
Direct flame $13,000 $ 17,000
(Primary and secondary heat recovery)
Adsorber $37,000 $111,000
These are sizable sums, which could roughly be cut in half with a ±10% error in meas-
urement. In this case, the savings in installed cost would probably outweigh the costs
to attain the higher accuracy.
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35
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(70-300 F process gas inlet)
37
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38
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As illustrated by this example, the accuracy requirement of the survey is heavily
dependent on the way equipment costs are affected by any resulting inaccuracies. This
leads to the problem of multiple safety factors. If several steps are involved in arriv-
ing at a final effluent or process description, and the steps are carried out by indepen-
dent parties, there is a considerable propensity to accumulate safety factors. Manage-
ment unknowingly may even add an overall safety factor to the result. Steps in data
acquisition should therefore be clearly listed and any safety factors applied should be
noted. Such safety factors are often inserted to compensate for possible inaccuracies
in the reported data.
It should be noted that, when several inaccuracies are involved in a computation,
it is likely that the errors will have a tendency to offset each other. At the opposite
extreme, the worst possibility is that each error would be in the same direction. For
example, if five separate errors are involved, the resultant error ER then would equal
the sum of the individual errors Ea + Eb + Ec + Ed + Ee . This situation is quite rare
where the errors Ea through Ee are due to independent causes, because in that case
there is only a rather small chance that all five errors are in the same direction. The
contrasting condition, that the errors will cancel out completely and produce a zero
ER, is also quite rare. The resultant error ER that has the highest probability of
occurrence is:
E -
This expected error is considerably smaller than the worst possibility given by a
straight addition of the errors. Bear this in mind in application of an overall safety
factor .
Another possible pitfall that management should be aware of involves the tinkering
with data. This tinkering can be quite innocent. Rounding off numbers, for instance,
can introduce errors if the numbers are small and several arithmetic operations are
to be performed. For example, consider the simple case of adding four numbers that
are rounded to the next whole number.
A
B
Rounding the sum
9.5
9.7
11.6
8.8
39.6 or 40
Rounding and summing
10
10
12
9
41
A 2.5% difference results. The correct technique is A.
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The tinkering can also be of a more complex type with perhaps a psychological
basis. As illustrated in Figure 4, the original data might first be "tidied up" by a test
technician, by eliminating a few far-out points; and then the project engineer might
come along and remove a few more. The result is a rather neat pattern for the data.
This process might yield different practical results, as can be seen by the fitted curves
in Figure 5. Data points should only be discarded if it is possible to demonstrate that
some equipment or method aberration was involved. NOTE: To check on data validity,
integrity of calculations, and error treatment, ask to see the original data. If a single
line is shown (hopefully, the result of regression analysis), the correlation factor
should be stated or the 90 - 95 percent confidence factor lines should be indicated.
PROCESS DESCRIPTION
A process description is an integral part of the conceptual design. Simple line
drawings with appropriately labeled blocks representing equipment may be used. The
drawing should be uncluttered so that process data, such as description of material,
production rate, temperatures, volumes, etc., are shown over the operating ranges to
be encountered. Service utilities, such as plant air (cfm andpsig), electricity (voltage
and phase), and gas (cfm and psig) should be noted.
PLANT DRAWINGS
Scale plan and elevation views of the plant, if not already available, should be pre-
pared. These will enable the equipment needed to be properly fitted into the plant
structure. The company's choice of control equipment locations should be indicated on
these plans. Even if these plans are fairly new and you have good confidence in their
accuracy, the bid package and contract should state (in a prominent place, not buried)
that the contractor is responsible for verifying all field locations. He should do this
prior to final signing of the contract.
In allocating space for control equipment, a balance of space and efficiency must
be sought. Plant space is valuable, perhaps even precious, so the tendency is to
squeeze in the control equipment. The offsetting considerations are difficulty of main-
tenance, if the equipment innards are not accessible, and added motive costs. For
example, short radius bends in confined spaces add pressure drops. In turn, these
pressure drops result in greater energy costs for the movements of a given amount of
air.
A rather technical example will illustrate this point. In a gas conveying system,
a 90° elbow that has a radius equivalent to 1 1/4 duct diameter has a 55% static pres-
sure loss. For example, if the velocity pressure is 1.126", there will be a .62" w.g.
pressure drop. If the radius is permitted to be 2 1/2 x duct diameter, the loss would
be .25" w.g., resulting in a .37" w.g. difference. If the system has three such
elbows, the total drop is 1.11" w.g. If it also has transition sloping into a duct at 45°,
the pressure drop here is .41"; but if there were room to enter at 15°, the loss is only
.32", a difference of .09". These two adjustments account for 1.2" w.g. A general
rule of thumb is that, for every 2" reduction in pressure drop, 14 brake horsepower is
saved at the fan; this actually varies with the fan and motor, but is acceptable for
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8
c
o
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• • *
• • •
Test technician's
original data plot
Input x
* • . * • • •
1
o
a.
-------
Input x
Regression line for "cleaned up" data
o
a.
cc
Input x
Regression line for original data
Figure 5. Results of "Cleanup"
42
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general discussion. The operation savings for a two-shift, seven-day-week operation
x 5840 hr/yr x $. 04/kWh = $l,464/yr
• 1.2
would be on the order of 14 hp x —- x . 746
Li
savings.
PROCESS OR END OF LINE STRATEGIES
kW
hp
The fifth element of the conceptual design calls for data on various control strat-
egies. The data should include acquisition and operating costs, limitations, advantages,
and side effects. Although this is the last topic discussed in this section, it should be
one of the first to receive attention in developing the conceptual design.
Sources of this information are varied. EPA, through its technology transfer ac-
tivity, is a good source; so are the economic portions of guideline information docu-
ments at EPA and the supporting documents for NSPS. For information on air pollution
control devices, a good source is the Industrial Gas Cleaning Institute. Various trade
and industry organizations have developed excellent data for their members, and it is
often available at a slightly higher cost to interested nonmembers.
THE PROCUREMENT PACKAGE
Many small companies do not prepare a formal request for quotations, what we call
a procurement package. They often call in likely suppliers, show them the plant area,
and verbally describe the problem. This method is hard to resist: it appears easy (no
hard thought in formulating a procurement package) and inexpensive. In reality, it is
often a more expensive procedure, since it involves repetition. Comparing the accu-
mulated bids is especially difficult. More importantly, errors can creep into the pro-
curement process, and perhaps become critical in the performance period. While
preparation of an effective procurement package is no panacea for avoiding these costs
and performance problems, it is a giant step in the right direction.
In addition, there are some secondary benefits worth mentioning. The package can
be sent to the home office of the contractor, so that reliance on several steps of com-
munication (plant-to-representative-to-home office) is avoided. Suppliers, when in
receipt of what is obviously a carefully thought-out bid request, also tend to extend
their best effort in responding—they feel that they have been presented with a bona fide
sales prospect, that the company is not merely on a "fishing" expedition.
We have seen unbelievably casual treatment of procurement for pollution control
systems. In one instance, a wet collector was supplied in response to a bid request
handwritten on one sheet of tablet paper. The system failed performance tests and was
woefully undersized. Fortunately, the supplier of the unit was also a supplier of other
equipment to the firm, and, because the firm was a valued customer, a compromise
settlement was reached. Another company, after several false procurement starts
(they were fishing), provided process and waste data to a supplier's representative in
a phone booth and the data was relayed to the home office on an application form filled
in by the representative during the phone conversation. A fundamental mistake—using
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acfm (actual cubic feet per minute) instead of scfm (standard cubic feet per minute)—
resulted in a violent puff-back at equipment turn-on, creating a local plant fire. Many
changes were made in the system over the next six months (the mistake was not found),
but the performance attained was only marginal. Litigation followed.
Legal protection is yet another reason to prepare a sound procurement package.
In this case, contract clauses can help form the basis for subsequent legal remedies,
if this is ever needed. Failure to perform on the part of a contractor is sometimes
remedied by providing that the buyer shall be entitled to damages—for instance, to re-
cover the difference in cost between the defaulting contractor's quotation and that of the
next highest bidder for a comparable system. Having a carefully prepared procure-
ment package can help considerably, if it is ever necessary to establish that another
bidder was presenting a "comparable system. "
In summary, a well-developed procurement package has all of the following
advantages, and few disadvantages (see discussion of warranties for one potential
disadvantage):
-- permits more contractors to be solicited;
-- elicits better responses from potential contractors;
- - aids the company by acting as a checklist;
-- facilitates the evaluation of bids;
-- serves as the basis for the contract;
-- reduces the chances of management error; and
- - aids in protecting company remedies.
CONTENTS
The procurement package should contain Elements 1 through 4 of the conceptual
design. (See page 31.) It should also contain, as a minimum, acceptance-test proce-
dures, delivery requirements, and payment schedules. It may also require perfor-
mance bonds, and should establish methods for resolving disputes. Terms and condi-
tions found in your general purchase order forms could be included. If delivery is
expected to be tight, a clause should be included stating that time of delivery is of the
essence.
If you are using a consultant, this is a good task assignment. You may also wish
to have the company lawyer, or a specialist he designates, review the package before
sending it to prospective contractors.
The procurement package should also contain general engineering specifications on
such items as choice of material, finishes, wiring, and piping connections.
44
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EVALUATION OF BIDS (AND BIDDERS)
This is the third important step in acquisition of a control system, following prep-
aration of the conceptual design and the procurement package. It is no less important
than the preceding steps, and is vital to success of the control program.
Evaluation generally takes at least one man-week of effort. If a lesser time is re-
quired, an analysis would be in order. The reason might be that too few bids were
received. The reason could be positive, that contrary to general experience: (a) all
the bids were complete and readily comparable; or (b) side effects and operating and
maintenance costs were minimal and easily determined. However, in most cases, a
superficial job of reviewing the proposals is the most likely cause. The number of
possible approaches, their varying technical features, and the trade-offs among ac-
quisition costs, operational costs, maintenance, and side effects are simply too in-
volved to be evaluated without a thorough and capable effort, lasting considerably more
than one man-week.
For example, the problem of controlling hydrocarbons can make the point clear.
Control can be accomplished essentially by two means—adsorption and incineration—
and these two techniques rapidly expand into several approaches based on features and
economic trade-offs. The basic approaches (for stationary sources) would each have
to be listed as to acquisition and annual costs. A tabular format would be effective:
Approaches
Acquisition
Cost
Annual
Expense
Direct Flame Incineration without
heat recovery
Direct Flame Incineration with
primary heat recovery
Direct Flame Incineration with primary
and secondary heat recovery
Catalytic Afterburner without
heat recovery
Catalytic Afterburner with primary
heat recovery
Catalytic Afterburner with primary
and secondary heat recovery
Carbon Adsorption
Process Change A
Process Change B
Process Change C etc.
45
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Further, all of the above cost findings are affected by the operational characteristics
of the plant, such as:
-- process gas temperature;
- - use that can be made of recovered heat;
-- price for materials recovered;
-- other contaminants in process gas;
-- the LEL of process gas; and
- - number of work shifts.
Obviously, the evaluation of proposals in this framework will take some time. It may
also be the point at which you seek outside assistance.
Bid analysis must not only be sufficiently thorough, but it must proceed on a step-
by-step basis. There are no hard-and-fast procedural rules, but we have found the
following review procedure to be generally workable:
• Evaluate proposal coverage.
• Examine bidder's general qualifications.
• Normalize proposals.
• Determine acquisition and annual costs.
Adequate proposal coverage assures competition in terms of both price and tech-
niques. To obtain competition as to technique, the bid responses should cover all of
the techniques your conceptual design has indicated are good control strategy candidates
For example, in particulate control, your design concept might have shown that wet
scrubbers, fabric filters, and electrostatic precipitators could be used. For a quarry
operation, the conceptual design might have indicated a choice between (a) a wet sup-
pression system with surfactants, or (b) a central control with outlying hoods using a
fabric filter or a wet collector. The procurement package sent to potential contractors
should cover the full range of techniques determined in the conceptual design, and
should also request the bidder to propose any other approach that he feels offers advan-
tages. If process changes are viable alternatives, then evaluation will proceed in par-
allel, because different types of suppliers and contractors are generally involved.
To develop a competitive ranking, each technique represented among the proposals
received should have three or more price proposals. If technical or price gaps are
found, more bidders should be solicited.
Once assured that you are considering the viable alternatives and have sufficient
competition, the next step is to examine the bidder's background and qualifications.
This is best done in two steps. The first step determines whether the bid should be
thoroughly evaluated, as set forth later in this section. The second step is to perform
a detailed screening when the bidders have been pared down to two or three. It has
46
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been said that if one wishes to study history, he should first study historians, because
their works are conditioned by their experience, personality, and training. Before
studying a contractor's proposal, it is likewise important to know something about the
contractor and his business posture and demonstrated ability. The initial screening
can be facilitated by inserting several questions into the procurement package. Three
suggestions are:
• Ask for a brief company history indicating founding date, sales and earnings
history, and experience in the technical disciplines involved. An annual report
by a publicly owned company can be used; some privately held companies may
not release earnings figures, but should provide sales figures.
• Ask for a list of clients for whom the bidder has supplied related systems. The
name and telephone number of a person to contact should be included.
• State that a performance bond may be required of the successful bidder, and
ask for a response to this requirement.
Answers to the above should be sufficient for the original screening and will form the
basis for further detailed screening. Our concern here is the process of qualifying the
final screened bidders.
A performance bond can be of some help in qualifying a bidder.. Performance
bonds are commonplace with government agencies. They are used less frequently in
private business, but their use is rapidly increasing. If the bidder is a small company
or a division of a company where this one purchase would represent a sizable fraction
of its annual sales (say 10 percent or higher), or if the technology involves some fac-
tors with which the bidder has not had extensive experience, a performance bond might
be requested. Such a bond does not materially lessen the chance of litigation. The
main purpose is to provide a surety that, if a dispute regarding performance should
occur, the financial wherewithal to affect the changes or to complete the project as
contracted would be available.
Such bonds require a prospective contractor to pay a fee or premium to the surety.
Such fees are generally regulated by state insurance commissions or boards. The fee,
which is usually passed on to the buyer (cost included in the bid price), can range from
1 percent of the contract amount to as much as 3 percent; the higher fees are charged
on accounts having more risk or requiring more administration. How the surety oper-
ates varies considerably. But before issuing a performance bond, the surety will us-
ually investigate the technical and management capability of the applicant, the appli-
cant's total work program, his net worth, and net working capital. The cost passed to
the buyer for the performance bond is thus related to both the worth of the screening
(done by the surety before bond issuance) and the face value of the bond.
The final screening should include telephone contacts and one or more visits to
other installations cited in the potential contractor's proposal. It is good practice to
ask a contact if he knows of any other installations, and these should also be contacted,
particularly if not listed by the potential contractor. It is important to talk to several
contacts at a listed plant or to several plants.
47
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Once qualifications (the first screening) are completed, the technical and cost eval-
uation can continue. The next step is to normalize the bids. Even for a common con-
trol technique, it may be difficult to compare bid prices because of differences in bid
formulations. For example, bidders may have different f.o.b. points, auxiliary parts
may be included in some and not in others, interconnection responsibility and installa-
tion may vary. It is therefore necessary to normalize bids to a certain standard, so
that price comparisons can be made. This is no different from other capital buys, ex-
cept perhaps that a greater variety of techniques may have to be normalized. As a
suggestion, you should normalize to what you feel should be the standard, rather than
to what appears to be the most attractive bid. Otherwise, important comparisons may
be missed.
Price comparisons can now be made among the bidders who seem technically qual-
ified and financially responsible. If this involved only acquisition costs, the review
would be simple enough to deserve only a brief mention. The difficulty, however, is
that various techniques, because of their differing operational characteristics, have
different annual costs; and these annual costs, such as energy, chemicals, replacement
parts, and maintenance, can be the deciding factors. This is shown in Figure 6, which
contains estimated prices for several techniques of controlling hydrocarbon emissions.
This is a hypothetical installation, and we will not dwell on the cost basis and assump-
tions. The important things to note are: (a) the magnitude of annual costs which, in
some instances, are higher than the acquisition costs; and (b) the differences in both
acquisition and annual costs as a function of control type and gas volume handled. These
figures are based on a two-shift, seven-day-week operation. If a 40-hour week is used,
the annual cost will decrease; but, even in this situation, hydrocarbon controls require
considerable attention to annual costs.
The concept of annualized costs is illustrated in Figure 7, which is a hypothetical
problem in optimizing heat recovery. The extent to which heat recovery should be
practiced depends on many factors, such as fuel costs, equipment acquisition costs,
primary and secondary uses of recovered heat, and heat transfer efficiencies. Since
these factors are unique to each plant, it is not possible to present a specific method-
ology for making this analysis. A general approach, however, is to analyze several
levels of heat recovery as to savings in plant operational costs. To this must be added
maintenance costs for the control unit plus the recovery unit. Another set of points is
plotted for the annual cost associated with depreciation and interest on the acquisition
costs. These two graphlines can then be added. The resultant is total annualized costs.
The recovery point selected would be the smallest annualized cost corresponding to the
lowest point of the dashed graph line shown in Figure 7.
The concept of annualized costs is one of two that can be used to compare costs of
competing systems, the other being net present value (NPV). This method is described
in the manual Choosing Optimum Financial Strategies, and is not discussed here. Both
methods, however, have the common characteristic that difficulties stem from the nec-
essity to estimate operating and maintenance costs.
48
-------
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Operating costs are susceptible to rather accurate analysis. The various horse-
power requirements for the motors for fans, screws, air compressors, and pumps
can be obtained from the contractor's proposal. These can be readily converted to
annual cost by:
Annual Cost = hp x .746x hrs/year operation x $/kWh.
The last factor in this formula should be checked with your local power company. This
check should cover historical records, but should not overlook the current rates with
the added load to support the control strategy. Demand charges can have considerable
effect on energy costs. There are also large variations in base load costs—a large
rural user, for example, may be very low compared to a "small" user in a different
area. Here, the local power company offers truly free consulting advice, and they will
generally provide competent, unbiased advice.
Estimated consumption of materials should be requested in the procurement pack-
age—chemicals used in water treatment, for instance. Their cost can then be obtained
from a chemicals supplier. Some chemicals have important economies of scale, and,
if so, quantity discount prices could be quite different from the average price. The
price used in the analysis should be the relevant one.
If natural gas, oil or coal are to be used, their projected availability as well as
their costs should be analyzed. In the event your service is provided under an inter-
ruption contract, or if you feel you may voluntarily switch to an alternative fuel, that
fact should be included in the bid analysis. An important observation is that fuel
switching can result in changes in your gas waste stream. Changes in sulfur concen-
tration, particulate content, and temperature excursions are commonplace. Such
changes could affect the performance and operating life of the control system. NOTE:
Anticipated fuel changes not only could affect control device performance and operating
costs, but they might also have an impact on warranty provisions. Any such fuel
switching expectations should be described in the procurement package.
Maintenance costs are difficult to estimate. Further, they can be important enough
to tip the choice between control-system techniques and among feature options on a
given technique. While obviously composed of labor and material, maintenance costs
may, in addition, have important, less obvious costs associated with interruptions to
production.
As one source of production interruption, a control system may have materials
that have shorter lives than the system as a whole. This is a well-known phenomenon.
Such materials might include activated carbon in adsorber systems, refractory lining
in gas-conditioning portions of control devices, fabric filters in baghouses, fan belts,
pump pistons, etc. Prices for these parts are readily obtainable. Often, to predict
expected costs, you can rely on past maintenance history of similar equipment compo-
nents. An additional approach is to examine those parts of a system where the supplier
seems to be hedging on his warranty or performance provisions and the relation to
processing characteristics. If a temperature must be closely controlled, particulate
loading kept very low, water pressures or contaminant type tightly restricted, etc.,
51
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the control operating condition is sensitive to process performance; and, where this is
so, you can expect to devote correspondingly more preventive maintenance time and
materials to assuring that those characteristics of your process do not exceed the tol-
erances noted.
Maintenance costs obviously should cover replacement of faulty or broken parts,
which involves both direct labor costs as well as possibly much higher production in-
terruption costs. Frequency of replacement, ease of replacement, and spare parts
stocking costs should enter the analysis. There is wide tendency to estimate mainte-
nance as a portion of installed system costs—such as use of a percentage rule-of-thumb
figure. This approach should be avoided, since the costs of an appropriate analysis
with considerably improved accuracy are usually modest with respect to the savings
potential.
At this point, it should be possible to pick the "best offer" among the responsible,
qualified, and normalized proposals. Before a contract is consummated you will want
to assure yourself that you have
- - obtained a satisfactory warranty;
- - provided for acceptance and performance testing; and
-- established methods of resolving disputes.
A written warranty provision in a contract for pollution control systems is a prac-
tical necessity. You may have heard about implied warranties, which need not be in
writing. Chief among these is the "seller's assurance of merchantability," which re-
quires that the goods offered be of a quality at least as high as buyers can ordinarily
expect in the market involved. The Uniform Commercial Code (UCC), which is in
force in all states, except Louisiana, provides this type of implied warranty automat-
ically, even if not mentioned orally or in writing, so long as the seller regularly deals
with the type of goods being purchased. If the seller knows the special purpose for
which equipment is to be used, another implied warranty from the UCC holds: "fitness
for a particular purpose. " The more the seller knows about your specific use, the
tighter this warranty becomes.
However, reliance on such implied warranties in pollution control is not without
problems. For example, while a baghouse can generally be used to control particu-
lates, the seller cannot be held to be aware of a special purpose unless the buyer
specifies many characteristics of both the particulates and the gas stream.
In essence, the purpose of a warranty is to establish who is at fault if the pur-
chased system fails to operate; as a secondary objective, it also attempts to establish,
or at least limit, the exposure of the parties once fault is determined. Therefore, the
buyer will want to place the risk as much as possible on the seller. He can do this by
describing the specific purpose for which the equipment will be used as extensively as
possible. This obviously puts some risk on him, since the description of the waste
stream process must be. extensive and accurate. Omissions and ambiguities in the
specifications leading to faulty performance might otherwise be laid on the buyer.
52
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At the same time, the buyer wishes to establish that he is relying on the seller's
expertise. If the buyer closely specifies the subject of the purchase (e,g,, by speci-
fying technical details, brand name, or patented goods), this will tend to indicate that
expertise resides in the buyer, and that he is not relying on the seller's expertise in
selecting the right equipment for the job.
The buyer should strive "to have his cake and eat it, too," by a two-barreled ap-
proach: (a) an extensive and accurate listing of the purpose and application of the sys-
tem, and seeking a comprehensive warranty; and (b) placing a clause in a prominent
place, stating in effect that the buyer is relying on the expertise of the seller and that
the seller has made himself familiar with the detailed use and plant environment in
which the control system will be used.
ACCEPTANCE TESTING
A unique aspect of capital acquisitions related to pollution control is the fact that
the performance of the system must satisfy a third party. The performance standards
can be specified by local, state, or federal regulations, or some combination of these.
Regulatory authorities carry out their function in various ways. They frequently
require that performance tests be conducted by a responsible testing company and then
submitted to them for review. In many instances, they require that their personnel
observe the test; the purpose is to make sure that process conditions are met and that
proper test methodologies and instruments are used. Some states have their own sam-
pling teams, who may seek to duplicate results.
Acceptance testing may be complicated by multiple objectives. If you are dis-
charging compatible waste to a sewer, there is often an acceptable range of waste load
and concentration; but the fee for discharge to the sewer may be levied on either flow,
or pollutant content, or a combination of both. Therefore, future costs for discharge
of compatible wastes to the sewer will be dependent on how well the equipment does the
job for which it was purchased. Since testing is frequently a prerequisite for accep-
tance by the regulatory agency, and because it is necessary to determine such future
costs of operation, it is important that the full requirement for such testing be included
in the contract as a condition of system acceptance prior to release of final payment
and as a condition of fulfillment of some warranty provision.
The requirement for testing should specify the tests to be made, test method,
process conditions under which the test is to be conducted, and name of the testing
company (or provide a statement as to the general company qualifications for conducting
an acceptable test). Because of overlapping jurisdictions, it may be necessary to spec-
ify more than one test for a particular pollutant. For example, a federal NSPS test and
a state test may both be required for a new or modified plant. There may be differences
in number of test runs required and in definitions, although the methodologies are likely
to be similar: As an example, for particulate emissions from an asphalt batching plant,
NSPS requires an average of results from three tests, while Pennsylvania requires only
one; the Pennsylvania definition of particulates includes condensibles, while NSPS ex-
cludes them.
53
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A word about testing expenses. Getting it right the first time can save money.
Test regulations often require that tests be conducted for a minimum time duration
and/or for a certain amount of gas volume; or, if you are involved in water waste, a
certain number of grab samples and a certain number of composite samples must be
examined for prescribed pollutants. Test requirements for air also specify that the
test should be conducted under those process conditions that are likely to provide the
greatest amount of uncontrolled emissions or effluents. Therefore, if you have a batch
operation where the type of effluent generated varies, you will want to make sure that
the day scheduled for the tests has the process conditions required by the regulations
and that the process conditions persist long enough to meet the particular times, vol-
umes, and number of samples. The company generally must provide adequate scaf-
folding, test points, access to process flows, etc., to facilitate the testing procedure.
If the test crew arrives at the plant and the proper conditions and facilities are not
available, the subsequent delay will add to the cost of the testing.
The acceptance testing contract should require that the test report be approved by
the regulatory office—not the results of the test, but rather the methods employed—as
a condition of payment for test services. If a test is disapproved because of improper
instrumentation or methodology, the testing company should be responsible for retest-
ing. Delays attributable to the plant would be paid for by the plant.
Testing to meet the obligations imposed by third parties, the unique aspect of ac-
ceptance testing for pollution control, can be extended to meet the interests of the other
two parties concerned. In the instance where a conceptual design and/or contractor
proposal shows that operating costs are high enough to exert important pressure on the
acquisition decision, an additional acceptance criterion may be called for. The com-
pany may have chosen a high-cost system in terms of capital cost on the assumption
that much smaller operational costs would offset the larger first costs. Where oper-
ating and maintenance costs heavily influenced the choice, the express warranty should
be extended to cover this aspect of the purchase, and a satisfactory acceptance test
should be agreed on. This test need not be approved by any government agency, but
must satisfy the parties to the procurement contract. The savings that are often the
subject of a test requirement of this type are energy, chemicals, and replaceable
control parts.
Even in well-planned conceptual designs, procurement packages, and ensuing con-
tracts, the parties to the contract may encounter differences which they cannot resolve
through negotiation, so that some outside means of resolving the dispute must be uti-
lized, i.e., through the courts or through arbitration. A relevant clause covering
these matters should preferably be expressly covered in the procurement contract.
The contracting parties should agree on the particular state whose laws shall be
applied in the resolution of any legal dispute arising from the contract. Please note,
we are not talking here about which state to bring suit in; this is determined by other
considerations. The state law to be applied by the court, once suit has been brought,
can be preselected; and since state laws differ significantly in many respects, the
choice of a particular state may significantly influence the ultimate outcome of the
54
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litigation. Again, because of significant differences, a company's legal advisers may
be more familiar with certain state laws than others, and this, too, may influence that
particular choice.
The contracting parties should agree on whether conflicts should be settled in the
courts, or be submitted to arbitration. Unless the contract specifies otherwise, dis-
putes will be resolved in the regular courts of law. This, in turn, creates both advan-
tages and disadvantages. Among the former are standardization of procedures and of
legal principles, availability of appellate procedures, provisions for pretrial discov-
ery, and so forth. Among the countervailing disadvantages are crowded court calen-
dars (leading to long waits), the expense of the above-mentioned pretrial and appellate
procedures, public notoriety, etc.
Arbitration is in contrast to the foregoing. Rather than taking place in a regular
court, it takes place before whatever group of arbitrators the contract specifies.
There are even specialized organizations, e.g., the American Arbitration Association,
whose services are available for this purpose. Advantages of arbitration are speed,
informality, and, in many instances, reduced cost. On the other hand, there are not
the safeguards of precedent, legal procedure, and appeal, which exist in court. In
particular, the right of appeal is lost when arbitration is made binding, as resort to
the courts by the losing party is prohibited.
The whole area of this concluding discussion—choice of law and treatment of the
possibility of arbitration—is sufficiently involved and esoteric that legal advice is rec-
ommended before it is treated in the original contract.
. S. GOVERNMENT PRINTING OFFICE: 1977-757-056/5619 Region No. 5-1
55
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METRIC CONVERSION TABLES
Recommended Units
Description
Length
Area
Volume
Mass
Time
Force
Moment or
torque
Stress
Unit
metre
kilometre
millimetre
micrometre
square metre
square kilometre
square millimetre
hectare
cubic metre
litre
kilogram
gram
milligram
tonne or
megagram
second
day
year
newton
newt on metre
pascal
kilopascal
Symbol
m
km
mm
!um.
m2
km3
mm2
ha
m3
1
kg
g
mg
t
Mg
s
d
year
N
N-m
Pa
kPa
Application
Description
Precipitation,
run-off,
evaporation
River flow
Flow in pipes,
conduits, chan-
nels, over weirs,
pumping
Discharges or
abstractions.
yields
Usage of water
Density
Unit
millimetre
cubic metre
per second
cubic metre per
second
litre per second
cubic metre
per day
cubic metre
per year
litre per person
per day
kilogram per
cubic metre
Symbol
mm
m3/s
m3/s
l/s
m3/d
m3/year
I/person
day
kg/m3
Comments
Basic SI unit
The hectare (10 000
m2} is a recognized
multiple unit and
will remain in inter-
national use.
The litre is now
recognized as the
special name for
the cubic decimetre.
Basic SI unit
1 tonne = 1 GOO kg
1 Mg = 1 000 kg
Basic SI unit
Neither the day nor
the year is an SI unit
but both are impor-
tant.
The newton is that
force that produces
an acceleration of
1 m/s2 in a mass
of 1 kg.
The metre is
measured perpendicu-
lar to the line of
action of the force
N. Not a joule.
of Units
Comments
For meteorological
purposes it may be
convenient to meas-
ure precipitation in
terms of mass/unit
area (kg/m3).
1 mm of rain =
1 kg/m2
Commonly called
the cutnec
1 l/s = 86.4 m3/d
The density of
water under stand-
ard conditions is
1 000 kg/m3 or
1 000 gfi or
1 g/ml.
Customary
Equivalents
39.37in.=3.28ft=
1.09 yd
0.62 mi
0.03937 in.
3.937 X 10'3=103A
1 0.764 sq ft
= 1.196 sq yd
6.384 sq mi =
247 acres
0.00155 sq in.
2.471 acres
35.314 cu ft =
1.3079cuyd
1. 057 qt« 0.264 gal
= 0.81X10* acre-
ft
2.205 Ib
0.035 oz = 1 5.43 gr
0.01 543 gr
0.984 ton (long) =
1.1023 ton (short)
0.22481 Ib (weight)
= 7.233 poundals
0.7375 ft-lbf
0.02089 Ibf/sq ft
0.14465 Ibf/sq in
Description
Velocity
linear
angular
Flow (volumetric)
Viscosity
Pressure
Temperature
Work, energy.
quantity of heat
Power
Recommended Units
Unit
metre per
second
millimetre
per second
kilometres
per second
radians per
second
cubic metre
per second
litre per second
pascal second
newton per
square metre
or pascal
kilometre per
square metre
or kilopascal
bar
Kelvin
degree Celsius
joule
kilojoule
watt
kilowatt
joule per second
Symbol
m/s
mm/s
km/s
rad/s
m3/s
l/s
Pa-s
N/m2
Pa
kN/m2
kPa
bar
K
C
J
kJ
W
kW
J/s
Comments
Commonly called
the cumec
Basic SI unit
The Kelvin and
Celsius degrees
are identical.
The use of the
Celsius scale is
recommended as
it is the former
centigrade scale.
1 joule = 1 N-m
where metres are
measured along
the line of
action of
force N.
1 watt = 1 J/s
Customary
Equivalents
3.28 f ps
0.00328 fps
2.230 mph
15,850 gpm
= 2.120cfm
15.85 gpm
0.00672
poundals/sq ft
0.000145 Ib/sq in
0.145 Ib/sq in.
14.5 b/sq in.
5F
T -I?-??
J
2.778 X ID'7
kwhr =
3.725 X10'7
hp-hr = 0.73756
ft-lb = 9.48X
10'4 Btu
2.778 kw-hr
Application of Units
Customary
Equivalents
35.314 cfs
15.85 gpm
1.83X10-3gpm
0.264 gcpd
0.0624 Ib/cu ft
Description
Concentration
BOD loading
Hydraulic load
per unit area;
e.g. filtration
rates
Hydraulic load
per unit volume;
e.g., biological
filters, lagoons
Air supply
Pipes
diameter
length
Optical units
Unit
milligram per
litre
kilogram per
cubic metre
per day
cubic metre
per square metre
per day
cubic metre
per cubic metre
per day
cubic metre or
litre of free air
per second
millimetre
metre
lumen per
square metre
Symbol
mg/t
kg/m3d
m3/m2d
m3/m3d
m3/s
l/s
mm
m
lumen/m2
Comments
If this is con-
verted to a
velocity, it
should be ex-
pressed in mm/s
(1 mm/s = 86.4
m3/m2 day).
Customary
Equivalents
1 ppm
0.0624 Ib/CLi-ft
day
3.28 cu ft/sq ft
0.03937 in.
39.37 in. =
3.28ft
0.092 ft
candle/sq ft
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H3dSNVai ADO1ONH031 • AON39V NOU.03J.OHd 1V1N3WNOUIAN3
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