PB83-159731
Economic Analysis for the Final
Rule to Exclude Closed and
Controlled Processes from the PCB
(Polychlorinated Biphenyls) Ban Rule
(U.S.) Environmental Protection Agency
Washington, DC
Sep 82
Sex
partment of Cenmswct
! Technical bifena&taa Service
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September 1932
EPA 540/4-82-006
ECONO.-1IC ANALYSIS FOR THE FINAL RULE
TO EXCLUDE CLOSED AMD CONTROLLED PROCESSES
FRO.-1 THE PCB BAN
oy
Aniy Mol 1
Economics and Technology Division
OFFICE OF PESTICIDES AND TOXIC SUBSTANCES
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
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REPORT DOCUMENTATION >._*£?ORT NO.
PAGE
.4.- 7. tie ana SuDtitle
PB33
5. 3*oo
1597? i
rt Date
Economic Analysis for the Final Rule to Exclude Closed
and Controlled Processes from the PCB Ban Rule
7. AutnoHs)
Amy S. Moll
September, 1S82
8. Performing Organization Reot. No
9. Performing Or^a
<">
10. Proiect/Taik/Worn Un.t No.
11. Contract(C) or Granl(G) No.
(C!
(G)
N/A
12- Sponsoring Organization Na<-n« *nd Address
U.S. Environmental Protection Agency
Office of Toxic Substances
401 M Street, S.K.
Washington, D.C. 20460 '
j 13. Type of Report & Period Covered
f
! Final Report-
i u"
i
IS. Suoolementary Notes
Thi- report updates and revises the Cost Analysis .for the proposed rule to exclude
closed and controlled processes from the PCB ban. •
16. Abstract .(Limit: 200 wores)
In May, 1979 EPA promulgated the original PCB ban rule,
which.permitted the manufacture, processing, distribution, and
use of PCBs in concentrations less than 50 ppm. The Court ,
remanded the rule to EPA because EPA did not present sufficient
evidence to justify the 50 ppm cut-off decision. The Court
ordered that a rule dealing with the incidental generation of
PCBs in closed and controlled manufacturing processes be
promulgated by October 13, 1982. EPA is promulgating a final
rule which excludes closed and controlled processes from the PCB
ban. This report estimates the costs and benefits of the final
rule as well as the other regulatory alternatives considered Dy
EPA.
17. Oocument Analysis a. Descriptors
Polychlorinated Biphenyls Economic Impact Analysis
Economic Impact Analysis
PCB Closed/Controlled Rulemaking
C. 1d«ntlfi«n/Qo«irv£fHi«d Terms
c. COSATI
IB. AvaiUDilitY Statement
Unlimited Availability
19. Security Clan (This Report)
Unclassified
20. Security Class (This Page)
, I!. No. o< Pages
:. fiS
i 22. P-ct
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CONTENTS
Page
DISCLAIMER
LIST OF TABLES . iv
EXECUTIVE SUMMARY V
I. INTRODUCTION 1
II. ALTERNATIVES . 10
III. GENERIC COSTS OF SELF-CERTIFICATION7, REPORTING, A\TD 15
PROCESSING EXEMPTION PETITIONS
IV. BENEFITS AND COSTS OF ALTERNATIVE EXCLUSION OPTIONS 30
REFERENCES 47
APPENDICES
A. End-Products of Manufacturing Processes in Which 48
PCBs are Incidentally Generated
B. Summary of Inadvertent Production of PCBs by 50
Concentration in Process and Process Category
C. Air Sampling - Breakdown of Costs 51
D. Estimated Costs to Industry of Filing an 52
Exemption Petition
E. Description of Samples to be Tested for PCB 54
Concentration
F. Calculation of Wage Rates for EPA Personnel 56
ILL
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LIST OF TABLES
Table 1 Summary Table: Aggregate Incremental Benefits and
Costs for Final Exclusion Rule for Closed/
Controlled Processes
Tab 1 e 2
Table 3
Table 4
Table 5
Table 6
Tab le 7
Table 8
Table 9
Table 10
Table 11
Table 12
Table 13
Page
viii
.\\nober of Closed, Controlled, and Uncontrolled 8
Processes by PPM Category
One Time Costs of Testing for Self-Certification 20
Costs of Recordkeeping and Reporting for Self- 23
Certification on a Per-Test and Per-Petition Basis
Cost of Making a Theoretical Calculation of the 25
Level of Incidental PCB Production and Release
Estimated Costs to Industry of Filing an Exemption 26
Petition (including research and testing costs)
Estimated Cost to EPA of Processing Exemption 29
Petitions (per petition)
Present Value of Self-Certification Costs Over 10 - 32
vears (Per Process)
Recordkeeping Costs to Industry for Self-Certification 34
(Per Process)
Costs of Reporting for Self-Certification
36
Costs to Industry of Filing Exemption Petitions (Per 37
Process)
Incremental Benefits and Costs Per Process for
Exclusion Options
41
Aggregate Incremental Benefits and Costs for Exclusion 42
Options
Table 14 Summary Table: Aggregate Net Benefits
45
IV
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EXECUTIVE SUMMARY-
EPA is promulgating a final rule to exclude certain closed
systems and controlled waste processes from the PCBban rule
where only minute quantities of PCBs are released into products,
air, or water streams. The purpose of this paper is to estimate
and discuss the incremental costs and benefits associated with
this exclusion rule as well as the other alternatives considered
by EPA.
In May, 1979 EPA promulgated the original PCB ban rule which
permitted the manufacture, processing, distribution, and use of
PCBs in concentrations less than 50 ppm. The Court remanded the
rule to EPA because EPA did not present sufficient evidence to
justify the 50 ppm cut-off decision. Since the effect of this
remand would have been to ban all PCBs, including those generated
in very minute concentrations, serious disruptions could have
resulted. Therefore, the Court granted a stay of the mandate
until October, 1932, and has since extended the stay until
December, 1982. Until that date the May, 1979 rule remains in
effect. The Court ordered that the PCB rule dealing with che
incidental generation of PCBs in closed and controlled
manufacturing processes be promulgated by October 13, 1982.
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/ I
This paper discusses four options for regulating PCBs
incidentally generated in closed or controlled processes. Tire
first option is the use of the exemption petition process. This
option is used as the baseline against which to measure the costs
and benefits of the other three options, i.e. zero costs and
benefits are implicitly associated with this alternative. The
second alternative considered is one in which EPA would only
require that theoretical assessments be made of the level of PCB
release from a process. The third alternative considered is the
one chosen by EPA for this final exclusion rule. Under this rule
EPA has given companies the option of doing either a theoretical
assessment or testing for self-certification. EPA. will hold
companies to a standard of proof achievable through the
recommended testing. Under the fourth alternative only testing
would be acceptable for self-certification.
The estimates of the incremental costs and benefits of this
exclusion rule are presented in Summary Table 1. It should be
noted that these estimates are subject to a great deal of
uncertainty for the following reasons:
1« jJncertainty over the appropriate baseline from which to
measure costs and benefits - Since EPA has not
established a policy for dealing with exemption
petitions, there is uncertainty over the appropriate
baseline from which to measure incremental, costs and
vi
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benefits of any exclusion policy. For purposes of this
analysis EPA has assumed that exemption requests for PCBs
generated in closed/controlled processes would be
granted.
2. Uncertainty over the number of processes affected - Since
only rough estimates have been made of the numbers of
processes which might be affected by this rulemaking the
total cost estimates are very uncertain.
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Table 1: Summary TaDle: Aggregate Incremental Benefits and Costs for
Final EPA Exclusion Rule for Closed/Controlled Processes
Number of processes affected:
51 processes 175 processes
Benef its
INDUSTRY:
Exemption petition cost savings
Costs saved by not having to
alter or cease production*
Added certainty*
EPA:
Petition processing savings
Total
COSTS
INDUSTRY: Self-certification costs
-Sampling Testing/Theoretical
Calculation
-Recordkeeping
-Report ing
EPA
-Report Review
-Enforcement*
$5.8m-$45.9m
$2. 6ra
$8.4m-$48.:>m
$6.1m-$8.6m
$.04m-$.14m
S.03m-?.09m
$.01m-$.02m
$20.0m-$157.5m
$8.9m
$28.9m-$166.4m
$20.8m-$29.7m
$.14m-$.47m
$.09m-$.32m
$.03m-$.7Om
Total
$6.2m-$8.9m
:? 21.0m-:? 31.2
'For purposes of this analysis these costs have not been quantified,
VI 1 1
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r,*' r fTTw^gn-v'i ^' ,'.*.*? '~* k vw. -' .'*
3. Uncertainty over component costs - Estimation of the unit
costs which will make up the total cost of any policy is
difficult since this testing is not commonplace; since
there was never a need to do such testing and monitoring
before now, there is little or no historical basis for
estimating testing costs.
Based on the estimates presented in Table 1, a conclusion
can be drawn that the benefits of the exclusion policy -- which
include avoidance of the costs of filing exemption petitions
and/or of altering or ceasing production processes -- will exceed
the costs imposed by requiring companies to self-certify to
qualify for th._ exclusion.
IX
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I. INTRODUCTION
EPA is promulgating a final rule to exclude certain closed
systems and controlled waste processes from the PCB ban rule
where only minute quantities of PCBs are released. The purpose
of this paper is to estimate and discuss the incremental costs
and benefits associated with this rule and the other alternatives
considered by EPA for PCBs generated in closed processes and
processes in which all wastes go to an EPA-approved landfill or
are incinerated in an EPA-approved incinerator.
A. Background
Section 6(e) of the Toxic Substances Control Act (TSCA)
prohibits all manufacture, processing, distribution in commerce,
and use of PCBs after July 1, 1979. EPA promulgated regulations
under 40 CFR Part 761, published in the FEDERAL REGISTER, of May
31, 1979 (44 FR 31514), to implement section 6(e) of TSCA. The
regulations excluded PCBs in concentrations less than 50 ppm frorr
the 6(e) ban, thus permitting their continued manufacture,
processing, distribution in commerce, and use.
The Environmental Defense Fund (EOF) petitioned the U.S.
Court of Appeals for the District of Columbia Circuit to review
three aspects of the PCB regulations, including the 50 ppm
regulatory cut-off as it applies to the manufacturing,
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processing, distribution, and use of PCBs (EDF v.EPA, No. 79-
158r>). in an October 30, 1980 decision, the Court found that
there was not substantial evidence in the record «-.o support this
50 ppm regulatory cut-off. The Court remanded this portion of
the regulations -to EPA for further action.
The effect of the court's decision would be to make the
manufacture, processing, distribution in commerce, end use of
PCBs in concentrations below 50 ppm a violation of section 6(e)
of TSCA unless an exemption petition for these activities is
filed and approved by EPA. An exemption petition must
demonstrate that 1) the company generating PCBs has made a good
faith effort to develop substitutes for PCBs, and 2) that no
unreasonable risk is attributable to the PCBs generated in
process or released from the process. : --(uests for exemption can
be granted for a maximum of one year, i.e. petitions must be
refiled annually.
On February 20, 1901, EPA, EDF, and certain industry
intervenors in EDF v. EPA filed a joint motion with the Court
requesting an eighteen-month stay of the Court's mandate for the
50 ppm regulatory cut-off. During the period of the stay, EPA
agreed to promulgate regulations relating to the msnufacture,
processing, distribution in commerce, and use of low levels of
PCBs, beginning with the publication of two Advance Notices of
Proposed Rulemaking (ANPRs).
— 2 —
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First, EPA agreed to publish an AN PR requesting comments on
the possible exclusion of PCBs from the section 6(e) ban when
generation occurs in a closed or controlled manner which presents
little or no risk to human health or the environment. These
processes are the subject of this economic analysis. In the
ANPK, closed manufacturing processes were defined as processes in
wnich PCBs are generated, but from which no PCBs are released.
Such processes generate PCBs within closed reaction equipment,
and the chemical reactions within the processes destroy those
PCBs continuously as they are produced. Controlled waste
processes were defined in the ANPR as processes in which PCBs are
yenerated, and from which PCBs are released only as constituents
of wastes which --jre either incinerated 5.n EPA approved
incinerators, disposed of in EPA-apprcved PCB landfills, or
stored for such disposal or landfilliny.
Second, EPA agreed to publish an ANPR requesting information
on the manufacture, processing, distribution in commerce, and use
of PCBs in low concentrations which might present risk; i.e.
activities that are not considered closed or controlled. This
rulernaking is only discussed here as it affects the
closed/controlled manufacture rulemakiny.
On April 13, 1981, the Court granted the requests of the
joint motion and entered an order. The text of the Court's order
is set forth in the FEDERAL REGISTER of May 20, 1981, along with
EPA's two ANPRs on the 50 ppm regulatory cutoff (46 FX 27615; 46
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FR 27617; 46 FR 27619 respectively). The Court's April I >, 1981
order stays the mandate of the court, and leaves the 50 ppm
regulatory cutoff i.i place until October 13, 1982. The Court
recently extended the stay to December 1, 1982. The effect of
this order is tnat the regulations promulgated on May 31, 1979,
regarding the 50 ppm regulatory cutoff, remain in effect for the
duration of the stay. Therefore, persons manufacturing,
processing, distributing in commerce, and using PCBs in
concentrations less than 50 ppm may continue these activities
until December L, 1982. EPA intends to request additional stays
of the mandate beyond that date. The Court'.s order requires EPA
to promulgate a final rule for closed manufacturing processes and
controlled waste manufacturing processes by October 13, 1982.
B. The Magnitude of the Incidental Generation Problem
The magnitude of this incidental generation of PCBs has been
documented by the Chemical Manufacturers Association (CMA) ^A_
Report of a Survey on the Incidental Manufacture, Processing,
Distribution, and Use of Polychlorinated Biphenyls at
Concentnations Below 50 PPM), and by Versar, Inc.. Both CMA and
Versar have estimated the number of processes in which PCBs are
incidentally generated in concentrations less than 50 ppm.
Versar has also made rough estimates of the extent to which PCBs
are incidentally generated in concentrations greater than 50 ppm
The term "incidental generation" refers to inadvertent
production of PCBs (e.g., as by-product or impurities) in
manu Lecturing processes for other end-products.
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using information gathered from exemption petitions. (Versar
Materials Balance Information on Inadvertently Generated PCBs) A
List of end-products of manufacturing processes in which PCBs are
incidentally generated is given in Appendix A.
The survey conducted by the Chemical Manufacturers
Association (CMA) provided data which indicate that 26 chemical
firms (of 85 respondents to the survey) generate approximately
13,8UO pounds of PCBs in 135 manufacturing processes where the
in-process concentration of PCBs is less than 50 ppm. An
estimated .69 pounds of PCBs are reportedly generated in 4 closed
manufacturing processes, and approximately 6,900 pounds of PCBs
are generated in 40 controlled waste manufacturing processes.
CMA does not give its criteria for closed and controlled waste
manufacturing processes with these estimates. 97.5% of the PCBs
generated in controlled waste processes are reportedly
incinerated, and 2.5% are disposed of in. EPA-approved chemical
waste landfills (CMA 1981). The 85 chemical firms responding to
the CMA survey represent 37.6% of industrial chemical sales.
However, since these 85 firms represent a large percentage of
basic industrial chemical sales, and since incidental generation
of PCBs is most apt to occur in that industry segment, CMA
assumed that most of the incidentally generated PCBs are
N
accounted for by these 85 surveyed firms. The CMA went on to
estimate that "up to thousands" of processes may generate PCBs in
concentrations under 50 ppm. However, the justification for that
estimate was not given.
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Versar estimates that there are between 130 and 500
processes where the in-process concentration of PCBs is less than
50 ppm. (Versar 1982a) Of these, from 4 to 15 processes are
considered closed, and generate a total of between .7 and 1.8
pounds of PCBs. Between 40 and 153 processes are considered
"controlled waste processes", i.e. all wastes from these
processes are disposed of in EPA-approved PCB landfills or
incinerated in EPA-approved incinerators (i.e., PCB approved
incinerators, certain RCRA approved incinerators, and EPA-
approved high efficiency boilers). These "controlled waste
processes" generate between 6,926 and 18,006 pounds of PCBs. The
87-3.42 "other than closed or controlled processes" generate from
6,856 to 17,830 pounds of PCBs (Versar 1982). (See Appendix B)
Data provided in the 26 manufacturing petitions for
exemption from the May 31, 1979 rule were used by Versar to
estimate 1) the number of processes in which PCBs are generated
in concentrations greater than 50 ppm and 2} the total pounds of
PCBs generated in those processes. Appendix B gives the
breakdown of these exemption petitions in terms of numbers of
processes that are closed, controlled, or uncontrolled, and in
terms of the pounds of PCBs contained in such processes.
Depending upon the ppm in-process limit, and on the "no-PCB"
level used to define closed and controlled processes, more or
fewer manufacturers and processes may be affected by the policies
being considered. Assuming that 1) a "closed process" is defined
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as one in which "no PCBs" are released to air, water, and waste
streams, and j£50 ppm ar<" --eleased to products, and 2) a
"controlled process" is defined as one in which "no PCBs" are
released to air and water streams, <50 ppm are released to
products, and all wastes yo to EPA-approved incinerators or EPA-
approved PCB landfij'is, then Versar estimates that among the
submicters of exemption petitions there is one closed process
yeneratiny an unknown amount of PCBs and six controlled processes
generating at least 9,123 pounds of PCBs where in process
concentrations of PCBs are greater than 50 ppm (Versar 19B2).
See Table 2 below.
Aggregating the estimates of the number of processes and
associated poundage from the _<50 ppm and _X>0 ppm cateyorie.~i, the
total number of closed and controlled processes which may be
eligible for the exclusion being considered is estimated to be
between 51 and 175. The total number of pounds of PCBs generated
annually in these processes is estimated to be between 16,051 and
27,131 pounds.
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?abl..e 2: No. of Closed, Controlled, and Other Processes
by PPM Category
PPM
<50
>50
Category
ppm
com
Total
Closed
4-15
1
5-16
Control 1 ed
40-153
6
46-159
Uncontroll ed
87-332
19
106-351
Source: Versar Inc., "Materials Balance Information on
Inadvertently Generated PCBs", 1982.
C. Methodology
The incremental costs and benefits associated with this
rulemaking are calculated against a baseline case of an immediate
ban on all manufacture, processing, distribution and use of
PCBs. The incremental costs associated with the exclusion
options are considered 1) the additional health risks resulting
from any exposure to PCBs from processes which would have been
subject to the ban had they not been excluded, and 2) the
additional costs incurred by manufacturers and EPA due to self-
certification requirements imposed by EPA. The exposure risks
will not be discussed here since a separate exposure analysis is
being prepared by EPA. However, if the assumption is made that
all manufacturers and processors subject to the ban would file
exemption petitions if there is no exclusion rule, and that all
such petitions would be granted without any conditions, then
there would be no incremental costs in terms of PCB exposure in
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the short run. In the long run there might be additional costs
in terms of PCB exposure since companies would be relieved of the
annual exemption petition requirement that they make a "good
faith" effort to develop PCB substitutes.
Incremental benefits are considered the savings which would
accrue to: 1) companies which would be relieved of the burden of
filing exemption petitions, altering processes, and/or ceasing
certain production processes, 2) companies which would be
relieved of the uncertainty resulting from the annual exemption
process, and 3) government which would only have to review brief
exclusion reporting forms rather than lengthier exemption
petitions from companies whose processes had been excluded.
D. Organization of Report
Section II discusses the alternatives available to EPA for
dealing with the incidental manufacture of PCBs, given the
mandate of the Toxic Substances Control Pet (TSCA). Section III
discusses the generic costs of testing, recordkeeping, and
reporting which might be incurred by industry under any exemption
or exclusion policy. It also discusses the costs which would be
incurred by EPA under such a policy. Section IV presents EPA
estimates of the total costs and benefits of various exclusion
policies,
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II. ALTERNATIVES
The final exclusion rule will alleviate the burden of the
PCB ban where little or no risk is posed by the generation of
PCBs as a byproduct or impurity. EPA proposes to exclude from
the PCB ban certain processes from which "no PCBs" are released
into the air, water, or end-products, and from which all wastes
are disposed of in EPA-approved landfills or EPA-approved
incinerators. The rationale for the exclusion is that such
processes pose a "de minimis", or trivial risk.
Since it is often impossible to totally prevent PCBs from
escaping from a process, and since PCBs that may escape are often
difficult to detect, EPA is proposing to issue guidelines on
appropriate analytical techniques to use to detect and monitor
PCB releases to air, water, and end-products of controlled waste
processes at the practical limit of quantification. Since the
actual minimum quantitatabl e level for a particular sample
depends on the sensitivity of the detector, the amount of
original sample extracted and condensed for analysis, and the
extract, and injection volumes, the practical limit of
quantitation of PCBs is a function of the economic
characteristics of each of the inputs to the analysis.
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The major policy variables considered by EPA in developing
the rule included the appropriate ppm cutoffs for PCB release to
various media, the content of the test guidelines, and the
associated recordkeeping and reporting requirements EPA would
impose on industries. For example, EPA considered requiring that
a company, in order to be eligible for exclusion from the ban,
perform tests, and recot1 and report test results, on a monthly,
\
quarterly, semi-annual, or annual basis, or whenever significant
process changes were made. In addition, EPA considered giving
companies the option of making a theoretical calculation on the
concentration of PCBs in their processes.
The rule being promulgated by EPA will exclude closed and
controlled processes from the PCB ban as long as PCB releases to
air, water, and end-products are at or below the practical limits
of quantification. EPA has set these limits of quantification at
10 micrograms per cubic meter per resolvable gas chromatographic
peak in air emissions, 100 micrograms per liter per resolvable
gas chromatographic peak in water effluents, and 2 micrograms per
gram per resolvable peak in an organic waste stream. In order to
be eligible for the exclusion companies will have to certify that
PCB releases from their suspect processes are at or below the
limits of quantification. The certification can be
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made by testing and recording the results, or by making a one-
time theoretical calculation showing that PCB releases will not
exceed limits of quantification. The testing and/or theoretical
calculation will have to be redone each time a firm's process
changes significantly.
This report presents costs and benefits of four regulatory
options. The cost and benefits of other options can be easily
calculated using the cables given. The first alternative is the
use of the exemption petition process to deal with all
incidentally generated PCbs, including those in closed and
controlled processes. Zero costs and benefits are implicitly
associated with this alternative since it is used as the baseline
against which to measure incremental costs and benefits of the
other three alternatives.
The second alternative considered is one in which EPA would
only require that a firm perform a theoretical calculation to
certify that a suspect process qualified for the
closed/controlled exclusion. EPA would not hold the firms to any
stricter standards of proof than the theoretical assessment
results to show that their process qualified.
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The third alternative is the regulatory alternative chosen
by EPA. That alternative requires that a firm with a suspect
process perform a theoretical calculation and/or analytical
testing to certify that their process qualities for the
closed/controlled exclusion. Under this regulatory strategy EPA
will hold firms to a stricter standard of proof than under the
second alternative to assure that PCB releases are below
designated levels; EPA has set up a testing protocol which it
will use for enforcement purposes—i.e. firms will be held to
this standard of proof.
The fourth alternative is one in which EPA would require the
testing described in the third alternative for all processes
which attempt to qualify for the exclusion. In other words,
under thitj regulatory strategy a theoretical calculation could
not be used to certify a process for exclusion.
The incremental costs and benefits of each of the last three
alternatives are calculated with and without a reporting
requirement. Under each of these regulatory alternatives
recertification would be required each time there was a
"significant process change".
The greatest amount of uncertainty in calculating
incremental costs and benefits is associated with the third
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alternative, i.e. the one chosen by EPA. Since firms have the
choice whether to test or to perform a theoretical calculation
the total impact will depend largely on how many choose each
option.
Section III presents and discusses the component costs of
each of these policy options as well as others considered by
EPA. Section IV aggregates those costs and benefits over the
applicable number of processes and over time to get a rough
estimate of the total cost of each policy considered.
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III. GENERIC COSTS OF SELF-CERTIFICATION, REPORTING. AND-
PROCESSING EXEMPTION PETITION'S
This section discusses and estimates the costs which would
be incurred by industry and by EPA under various policy
options. The costs of sampling, testing, recordkeeping, and
!
reporting are considered. Most estimates are very rough; the>
problems encountered in making these estimates are discussed
individually.
A. Sampling Costs
The costs of sampling each niedium of release should be added
to the costs of testing to calculate total costs of testing. The
costs of gathering water and product samples are so small that
they are assumed to be zero for purposes of this analysis.
However, the cost of taking air samples from stacks is
significant, so these have been included in the analysis.
The cost of gathering air samples for the testing
recommended by EPA are estimated to be $32,770. This estimate
includes the costs of sampling equipment preparation, site
preparation, labor and overhead costs for a four man sampling
crew working for 5 days, travel costs, and report writing
costs. (See Appendix C)
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B. Test.tr.g Costs
Estimating the costs of detecting and testing for
incidentally generated PCBs is very difficult for a number of
reasons. First, analytical techniques for such testing are still
being developed. Second, the test protocol, and therefore the
individual test costs, may be diffexant for every process and
product. Third, total testing costs nay be different for each
process because the sequential testing scheme recommended by EPA
calls for 2-7 tests to make each determination of the level of
PC3 release, and because the frequency of "significant changes"
in processes (which require recerti fieation) will vary from one
process to another. The technical problems in detecting and
me. Curing small quantities of PCBs in various media are discussed
at length in a CM A study: The Analysis of Chlorinated Biohenyls
(August 1981). Following is a list and brief discussion of the
technical problems discussed in that CM A study:
1. Lack of chlorobiphenyl standards - The chlorobiphenyl s
which occur in chemical process streams are generatri by
chemical reactions which do not produce fixed patterns of
isouers which can be used to identify the presence of
chlorobiphenyl s . Since the chlorobiphenyl s are comprised
of 209 individual chemical isomers, the analysis of
chlorobiphenyl s in pro'cess streams involves the difficult
problem of having to detect, identify, and measure each
2-7 tests should be done on samples which are each from a
separate cycle in the manufacturing process.
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isoner individually. The quantitative analysis of
specific chlorobiphenyl isomers is hampered because
standards necessary to calibrate analytical equipment are
not coinmerci ally available for all of the isomers.
2. Matrix interference - Process stream analyses for
incidentally generated chlorobiphenyls are severely
inhibited by the matrix of other substances in which they
are dispersed. The matrix interferes with the analysis
by hiding the presence of chlorobiphenyls, by decreasing
the sensitivity of the instruments to the presence of
chlorobiphenyls, or by incorporating the chlorobiphenyls
so that they cannot be extracted for analysis. These
matrix effects make it difficult to develop appropriate
analytical methods to detect and measure chlorobiphenyl s
in process streams.
3. Limits of quantification - The limit of an instrument's
ability to reliably measure the quantity of
chlorobiphenyls present in a process stream may be 3 to
3V2 times greater than the limit of detection.
4. Analytic al equipment 1 imitations - Gas Chromatography
(GC) with the electron capture detector (EC) and gas
chrcmatography combined with mass spectrornetry (MS) are
the most suitable methods for the detection,
identification, and measurement of chlorobiphenyls.
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However, these instruments are limited in their ability
to measure low levels of chlorobiphenyl s, and both
methods show variations in response to isomers-within the
same homolog, i.e. isomers with the same number of
chlorine atoms. Also, the GC/EC increases in
responsiveness, while the GC/MS. decreases in
responsiveness, as the number of chlorine atoms
increases.
Although the CM A study points out several limitations in
detecting incidentally generated PCBs, it now appears that, with
sufficient resources for engineering research and development, it
is technologically feasible to detect very low concentrations of
PCBs in processes and products.
A number of variables are involved in estimating test
costs. These are discussed above in the CM A study excerpts.
They include:
1. the complexity of the matrix in which the PCBs are
dispersed,
2. the type of testing equipment used,
3. the size of the sample tested (which also affects the
limit of detection), and
4. the extent of sample extraction and "clean-up" required.
Depending on the combination of variables, the cost of an
individual gas chromatography/mass spectrometry test for
incidentally generated PCBs ranges from $120 - $770 per sample
-18-
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when sent to an outside I ab (SRI 1982). These costs reflect both
the direct costs of operating testing equipment, and the indirect
costs to recover overhead expenses such as depreciation of
capital equipment, maintenance costs, etc. The costs of testing
for PCB releases in air ranges from $120 to $595 per sample.
(This does not include the costs of collecting air samples.) The
cost of testing for PCB releases in water ranges from $180 to
$595. Testing for releases to products ranges from $122 to
$770. See Appendix E for a description of sample products and
associated extraction and clean-up requirements for testing.
Table 3 presents the one-time costs of testing for sel f-
certification for each suspect process. Since the estimated test
costs per sample span a fairly wide range, and since anywhere
from two to seven tests will have to be performed on each medium
of release, the range of total costs is very wide; total costs
range from $840 to $13,720.
C. Costs Associated with Recordkeeping and Reporting for
Self-Certi fication
The costs of recordkeeping and reporting associated with any
exclusion policy will be dwarfed by the costs of testing and/or
performing a theoretical calculation for certification. The
costs of recordkeeping and reporting for self-certification are
assumed to be the same for each of the exclusion options; i.e.
the recordkeeping and reporting requirements are assumed to be
the same as those specified by EPA in the final rule. The final
-19-
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Table 3: One Time Costs of Testing for Self-Certificaiion
No. of Tests
Required on Each
Medium of Release
Two
Four
Seven
Air^
$120-$595/Test
$240-$!, 190
$480-$2,380
$840-$4,165
Water
$180-$595/Test
$360-$!, 190
$720-52,330
$1,260-$4,165
Product
$122-$770
$244-?!, 540
$438-$3,030
$854-?5,390
Total
$344-$3
$l,688-$7
$2,954-$!
,920
,840
3,720
The sequential sampling scheme specified in the CPA testing guidelines requires that 2-1
tests be clone on each medium of release
The costs of air sampling are net included here
Source: SRI 1932
-------
rule requires that all firms which have a process which qualifies
for the exclusion report their determination, and the basis of
the determination, to EPA. Also, records of the theoretical
calculation and/or the testing must be kept for seven years or
for at least three years after the patticular process being used
at the facility ceases operations. A new certification must be
filed and renotification of EPA must occur each time a
significant process change occurs. A significant, process change
is defined as one which is likely to change the concentration of
PCBs in releases from the processes (except in controlled
wastes).
Records of the theoretical assessment must include (1) a
description of the reaction or reactions believed to be producing
the PCBs, (2) the levels of PCBs generated and released, (3)
documentation of the basis for estimates of PCB concentrations in
releases, and (4) the name and qualifications of the person or
persons performing the analyses.
Records of actual monitoring of PCB levels must include (1)
a description of the method of analysis, (2) documentation of the
results of the analysis, including data from the quality
assurance plan, (3) the name of the analyst or analysts, and (4)
the date and time of the analysis.
-21-
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The costs of recordkeeping and reporting are estimated here
in terins of managerial hours, technical hours, and clerical hours
required to carry out those tasks. The estimated burden on
industry and EPA is given in Table 4 below.
-22-
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Table 4: Costs of Recordkeeping and Reporting for Self-Certification
Managerial Technical
hours costs hours costs
Industry
Recordkeeping
-per test round* 2 $134 4 $172
-for each theo-
retical calcu-
lation 2 $134 4 $172
Reporting 2 $134 2 $BG
(per report)
EPA
Report review .5 $20.0 1 $26
(per report)
Clerical Total
hours costs cost
4 $63 $374.00
4 $68 $374.00
2 $34 $254.00
1 $10 $5G..OO
(Average hourly wage rates used for industry: managerial - $67, technical
$43, clerical - $17). Average hourly wage rates used for EPA:
managerial: $40, technical: $26, clerical: $10. See Appendix F
for calculation of wage rates).
*A "test round" includes one set of tests on each medium of concern: air,
water, and end-product
Source: EPA estimates
-------
D. Cost of Making a Theoretical Calculation of the Level of
Incidental PCD Production and Release
As mentioned earlier, EPA plans to allow companies the
option of making a one tir.ie theoretical calculation of the level
of incidental PCH production and release in place of testing.
However, companies would be held to staying below the
concentration limits specified by EPA. The threat of enforcement
action might cause companies, particularly those with PCB levels
near the quantification limit, to forego the option of making a
theoretical calculation.
The cost of making a theoretical calculation has been
estimated by EPA t<-> be approximately $1,014. (EPA 1982) (See
Table 5) This cost includes the direct labor and overhead costs
of technical and clerical staff to perform and document a
theoretical calculation. It is estimated that it would take an
experienced chemical engineer approximately 22 hours to 1) gather
data on raw materials, 2) analyze the reaction and reaction
conditions to determine whether PCBs were incidentally generated,
3) survey the reactor and other equipment to identify where, and
to what extent, PCBs could be released to air, water, and end-
products, and 4) to document the calculation. Four hours of
clerical t?rne is also estimated to be necessary for the
documentation of this theoretical calculation.
-24-
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Table 5: Cost of Making a Theoretical Calculation of the Level of Incidental PCB
Production and Release (Per Process)
Technical
Hours Costs
Clerical''
Hours Costs
Total
Hours Costs
1. Gather data on raw materials,
e.g. information on
composition and impurities
2. Analyze reaction, reaction
conditions to determine
whether PC^s may be
incidentally generated;
do mass balance calculation;
3. Survey reactor, reaction
conditions to identify
where PCBs may be
released to air, water
$344
$344
$86
$344
5344
$86
in
-------
Table 6: Estimated Costs to Industry of Filing an Exemption Petition (including
research and testing costs)
Managerial Technical Clerical . Total Cost
hours costs hours costs hours costs (per petition)
Company 1* 1763 5200 208
Company 2* $4,500 $11,500
Company 3* 280 $18,760 120 $5,160 60
Source: Industry estimates
[Note: The companies contacted to estimate costs of
$126,000
$16,000
$1,020 $24,940
filing exemption petitions
did not give detailed breakdowns of cost estimates. Specifically, the
wage rates used by Company 1, and hours estimated by Company 2 were not
given. Company 3 provided hour estimates of the cost; the wage rates
used here to calculate total costs were: $67/inanagerial hour,
$43/technical hour, $17/clerical hour.]
*See Appendix D for a more detailed breakdown of exemption petition costs.
-------
E. Costs of Exemption Petitions
For purposes of this analysis EPA surveyed three petitioners
to gather rough estimates of the cost of filing an exemption
petition. Rough estimates of the costs to BPA of processing
exemption petitions are also presented here.
TaOle 6 summarizes the reported costs to individual
companies of developing the data necessary, and documenting the
results, in order to file an exemption petition. More detailed
oreakdowns are given in Appendix D. It is evident from the
estimates received that the effort expended by companies in
making a "good faith" attempt to develop PCB-substitutes and
documenting their cases for "no unreasonable risk" may vary
significantly.
For the three companies surveyed here the exemption petition
development cost ranged from $16,000 to $126,000. It should be
noted that these costs could change if EPA decides to revise the
information requirement or the standard of proof to demonstrate a
"good faith effort" to develop substitutes and of "no
unreasonable risk" to file exemption petitions in the future.
-27-
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The costs to EPA of processing exemption petitions on an
annual basis will depend on the nuiriber submitted and on the
scrutiny given to eau'n petition. Since there are likoLy to be
"economies of scale" in processing petitions, unit costs will
probably fall as the number of petitions submitted rises. Rough
estimates of the number of managerial, technical, and clerical
hours required to process an exemption petition are presented
here. These are broken down by function and .presented in Table 7
below. The functional cost categories include the costs of EPA
review, preparation for public hearings, federal register notice
preparation, and correspondence costs. The total estimated cost
of processing each exemption petition is estimated to be $7,126.
-28-
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Table 7: Estimated Cost to EPA of Processing Exemption Petitions (on a Per-
Petition Basis)
Managerial
hours costs
EPA review 10
Public Hearing 1
Preparation
Federal Reg- .1
ister Notice
Preparation
Correspondence 2
Total 14
$400
$ 40
$ 40
$ 30
$560
Technic al
hours costs
100
10
100
16
226
$2600
? 260
$2600
$ 416
$5876
Clerical Total
hours costs hours costs
10 $100 120
1 $ 10 12
50 $500 151
8 $ 00 26
69 $ 690 309
$3100
$ 310
$3140
$ 576
$ 7,126
assuming managerial wage rate $ $40/hour
assuming technical wage rate @ $26/hour
assuming clerical wage rate f? $10/hour
(See Appendix F for calculation of wage rates for EPA personnel)
Source: EPA estimates
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..V. BENEFITS AND COSTS OF ALTERNATIVE EXCLUSION OPTIONS
As mentioned in the introduction, the incremental costs and
benefits estimated here will be calculated using as a baseline
the scenario in which all PCBs would be banned unless an
exemption request were approved by EPA. The implicit assumption
made here is that all processes which would qualify for the
exclusion would also be granted their exemption requests, and
would be subject to the same disposal requirements and process
control requirements under both policies.
Tne incremental costs associated with exclusion options are
1) the additional health risks resulting £\. j;n any exposure to
PCBs in processes which would have been subject to the ban had
they not been excluded, 2) the costs incurred by companies to
self-certify and report that the level of PCBs in various media
are below designated levels, and 3) the costs incurred by EPA to
spot check records of companies which certify themselves.
A. Costs of Self-Certification (Per Process)
The incremental costs of self-certification will vary
significantly depending on how a company certifies itself.
Companies that make a theoretical calculation will incur the
lowest costs to self-certify. Companies that test to determine
PCB concentrations could incur very high costs depending on the
number and complexity of processes affected, and on the necessary
frequency and sophistication of tests performed. The sequential
-30-
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sampling scheme recommended in the EPA test guidelines which
accompany the final rule calls for 2-7 tests to be perfor.-ned on
each sample from each medium of concern (i.e., air releases,
water effluents, and products). Also, under the final rule
testing and/or the theoretical assessments will have to be
repeated each time there is a significant process change such
that the concentration of PCBs in release might change. It is
estimated that a significant process change could be expected to
occur once every 1-5 years. (EPA 1982a) Since so many variables
are invol.ved in these cost calculations, the estimated range of
costs fcr self-certification which are presented here are very
1arge.
The costs of testing a process range from $844 per year,
assuming the lowest estimates of testing costs and assuming that
only 2 tests need to be performed on each medium of release, to
$13,720, assuming the highest estimate o£ testing costs to be
applicable, and that 7 tests need to be done on each medium of
release. (See Table 3) If a significant process change occurs
once T year, so that annual recertification is necessary, then
the present value of costs over 10 years ranges from $6,030 to
$98,023. If a significant process change occurs only once every
four years then the present value of testing costs for
recertification .rauld range from $1,814 to $23,091. (See Table
3) The costs of air sampling must be added to the costs of
testing to calculate total certification costs.
-3?.-
^ _, jt^jpsjc^vcwf&mi*-* ..j
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Table 8: Present Value of Testing Costs Over 10 .Year's (Per Process)*
(using a 10% discount rate)
NTo. of Tests No. of Significant Process 'Changes
Required on Each
Medium of Release
.1 per year 1 per 2 years ] per 4 years
Two ?6,030-$28,007 $3 , 313-$15 , 390 $1,814-58,426
Four $12,060-$56,013 $6, 627-S30, 730 $ 3 , 628-$16, 852
Seven $21 , 105-S38, 023 $11, 597-$53, 864 $6, 350-$23 , 091 ,
(N
The sequential sampling scheme specified in the EPA testing guidelines requires that 7-1
tests be done on each medium of release
"Hie costs of air sampling are not included here.
It is
1982a)
3It is estimated that "significant" process changes will occur every 1 to 5 years. (EPA
-------
The costs of self-certification would be significantly less
if a company makes a theoretical assessment(s) to show that PCB
releases are below a certain level. The cost of making that
calculation has been estimated to be S1,U14 per process. (See
Table 5) The present value of the costs of conducting
theoretical assessments over 1U years range from $7,244, assuming
that significant process changes occur every year, to 52,180,
assuming that a significant process changes only happen once
every 4 years. Given the choice between doing a theoretical
calculation and testing for certification, not all companies that
have processes in which PCBs are generated would be willing to
self-certify using a theoretical calculation, especially it" they
feel that the level of PCBs in their processes may be variable
and/or near the maximum allowable concentration of PCBs. But
manufacturers and processors that are reasonably certain that
PCBs that are generateu in their processes remain below the
limits of quantification may not feel that testing is necessary.
Table y shows the recordkeeping costs' to industry associated
with testing and/or theoretical assessments for self-
certification. Discounting the stream of recordkeeping costs
which could be incurred annually over a 10 year period, total
recordkeeping costs per process range from $804 assuming that
significant process changes occur once every four years, to
52,672, assuming that significant process changes occur once
every year.
-33-
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PREAMBLE
The following guidelines describe methods for performing testing
of chemical substances under the Toxic Substances Control Act
(TSCA). These methods include the state-of-the-art for
evaluating certain properties, processes and effects of chemical
substances. They are intended to provide guidance to test
sponsors in developing test protocols for compliance with test
rules issued under Section 4 of the TSCA. They may also provide
guidance for testing which is unrelated to regulatory
requirements. Support documentation is included for some of
these guidelines. It is expected that additional guidelines and
support documentation will be incorporated later as the state-of-
the-art evolves or the need for them warrants.
Since these guidelines are divided into three sections which
cover the diverse areas of health effects, environmental effects
and chemical fate testing, there are some differences in the ways
they are presented. These differences are explained in an
introduction prepared for each section.
-------
Table 9: Recordkeeping Costs to Industry For Self-Certification
{Per-Process)**
Frequency of Significant Present Value*
Process Changes 10 Years
One per Year ** $2,672
One per two years ** $1,468
One per four years ** $804
*Using a 10% discount rate
**Assuming testing will he required on air releases, water
releases, and end-products.
-34--
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Table 10 presents the costs of reporting assuming that
significant process changes occur every one to four years. The
present value of the combined reporting costs to industry and EPA
range from $665 per process if one report must be filed every
four years, to $2214 if one report must be submitted each year.
B. Benefits Derived b'rom an K".c lus ion Policy (Per Process)
The benefits associated with the various exclusion policies
include 1) the cost savings to industry from not having to shut
down or alter processes, or -file exemption petitions, 2) the
added certainty for industry in not having to file annually for
exemption from the PCti ban rule, and 3) the savings to KPA by not
having to process exemption petitions each year. We have not
attempted to quantify the potential savings to industry from
added certainty or from not having to shut down or alter
processes. However, these benefits should not be ignored in
considering alternative options. Only the costs of filing an
exemption petition are quantified here. Table 6 shows that the
annual cost of filing an exemption petition may range from
S16,OOU to $132,440 (see Section III). Assuming that these same
costs would have to be incurred by a company each year over the
next 10 years for each process which does not fall within the
criteria for exclusion, then the total cost of filing exemption
petitions over tnat period range from $114,313 to $946,226 per
process. (See Table 11)
-35-
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Table 10: Costs of Reporting for Self-Certificat ion
No
1
1
1
Present Value*
* *Industry
. of Reports Cost per
Required process
Report/Year $1,814
Report/2 Years $997
Report/4 Years $545
Over 10 Years
**EPA Review
Costs Per
Process Total
$400 $ 2,214
$220 $ 1, 217
$120 $ 665
*assuming a 10% discount rate
**see Table 2 for detailed calculation of these costs
-36-
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Taole 11: Costs to Industry of Filing Exemption Petitions (per
process)
1U years
annual cost per petition** *present value
Company
Company
Company
2
3
1
$16
524
$132
,000
,940
,440
$1
91
$9
14
78
46
,313
,185
,226
*using a 1U% discount rate
**see Table 6 for detailed calculation of these costs
-37-
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C• Total Incremental Costs and Benefits of Exclusion
Policy Options (For Process)
The incremental costs and benefits of three exclusion policy
options are quantified here usiny as a baseline the costs and
benefits associated with an exemption petition process.
Obviously, many more policy options could be constructed with
various combinations of self-certification requirements. The
cost of options not given here can be easily calculated using the
tables given.
The first alternative which is implicitly considered here is
the use of the exemption petition process to deal with all
incidentally generated PCUs including those in closed and
controlled processes. This alternative is used as the baseline
against which to measure costs and benefits of the other three
alternatives, i.e. zero costs and benefits are implicitly
associated with this option. The second alternative considered
is one in which EPA would only require that a firm perform a
theoretical calculation to certify that a suspect process
qualified for the closed/controlled exclusion. Under this
alternative EPA would not hold the firms to any stricter
standards of proof than the theoretical assessment results to
show that a process qualified for exclusion. The third
alternative — the regulatory option chosen by EPA — requires
that a firm with a suspect process perform a theoretical
calculation and/or analytical tests to show that their process
qualifies for the closed/controlled exclusion. Under this
-38-
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regulatory strategy EPA will hold firms to a stricter standard of
proof than under the second alternative to assure that PCB
releases are below designated levels; EPA has set up a testing
protocol which it will use for enforcement purposes under this
regulatory strategy. The fourth alternative is one in which EPA
would require that testing be done for all processes attempting
to qualify for exclusion. Theoretical calculations would not be
acceptable to qualify for the exclusion under this regulatory
approach.
The-incremental costs and benefits of each of the last three
alternatives are calculated including a recordkeeping and
reporting requirement. Under each of these regulatory
alternatives recertification would be required each time there
was a "significant process change".
The greatest amount of uncertainty in calculating
incremental costs and benefits is associated with the third
alternative, i.e. the one chosen by EPA. Since firms have the
choice whether to test or to perform a theoretical calculation
the total impact will depend largely on how many choose each
option. since there was no data from which to estimate the
percentages of firms which will choose each option EPA has
assumed that roughly 40-60% of the processes which file for
exclusion will perform theoretical assessments of the
concentrations of PCB releases rather than doing testing.
-39-
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Table 12 p>"esen.ts the estimated incremental benefits and
costs per process for each of f~.j three alternatives
considered. The present value of the incremental benefits per
process is the same for each alternative. Discounted over 10
years at a 10% rate, incremental benefits range from $165,225 to
$951,127. The present value of the incremental costs per process
range from $3,64y to $337,036. The low end of the range
represents the costs of performing a theoretical calculation
initially, and once every four years thereafter when the process
changes. The high end of the range represents the costs of
testing annually to recertify. A major cost component in that
total is the costs of doing air sampling to determine PCB
releases to air.
The net benefits for the three alternatives considered here
range from $U to $y47,478 pe»- process. It is assumed that net
benefits would never be negative since firms would choose the
least costly alternative available to them to comply with the
rule, i.e. if it were going to cost them more to certify for
exclusion than to file an exemption petition each year then the
firm would choose to utilize the exemption petition
alternative. Because of the discretion allowed firms under EPA's
exclusion rule (Alternative 3) tne range of net benefits for that
alternative is very large, i.e. net benefits range from $0 to
$145.4 million. The wide range is bounded at the high end by
estimates of net benefits for firms that only have to do
infrequent theoretical calculations, and at the low end by
-40-
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T-ib.l <• 17: Avor.i'jo I re- ?'«'Mi'Mti ril IV'tiori's .'iii.l < \ m t M I'.
( )v c i I O Yi-> .1 t r, )
f'»r
,1 v.i I i
Al tern-it- i vo 7
Al t/>rn.it. I vo .3
Al I >-i ii.il. j v
jlenof i Is
"~f Nfiir;;Tnv
KxiMiipt inn IV r. it inn'
(1 >•> t :i ft n wl'
Cont.51 Snvorl by no I:
h.ivi nq in .i\ tor
r> r r«ns^ pr^xlnc t i (>n
A'l'tP'l cor t: .*>i nt y
Kl'A
I'ot. i tion I'rocesr, i ny
nnvin'j.s (per p^fit: inn)
"Tnt. .TT"
SIM, 11 J-$O, 'M 7.
Co 3 t 3
SoT'f Cc-rl:l f ir.-.Tf inn (t)r- $ i. on
$r.(),9!2
1 , 127
$r,4r, -
$120-
ir>0
$2,C>72
$1,01 4
$400
f
I
1
i ri'.j .1 !(>$ (lisc:onnt rn
Al t T n.ih i vo 2: Only MiO'T et ic ol .ir.ROsnirionr.s r^-jui r-?'l fijr oxolusinri
Al t orn.it i v«? .3 ' Tllorlro^ Jo ol .ir^Respment. ami/or f^-Jhinf} .T:t:opt..-il)l p Tnr exclusioti,
Al tprri.it I V" 4: Only f^Bhinq nrcepK.-ilil o for »x':l union
( Al ( ^r n.ih i vo 1 — t If .il t «»r-ii,Tt i vo in winch nnl y M»o oxompfinti p'.»Htif»n pro'/onn W.TM nsoil (
wiMi (?lr>.qo^J .itifl con t. r« )l | .-.-I pro<:»3sos — if tno-l ns Mio b.?^p| iti^ .T|.iinpf. whi<:h tn m«-..T5Mt
bonorits of the ntti"r ,il I «rn.ir i vns : i . *> . ?.orn C;/->S|;B nn'l bonofits .iro i mpl iv i tl y .if snr I nl <
al t orn.i t i ve )
Tho r.in'jo of costs in v-i y 1 ,irqo R i nc o mielor this .il tornnl: i uo f i rmR .iro 'livon I ho <-lmi.-
tor.i nr porrnnn .1 thoor "t i«- .il c ,il cnl .11 i n?i f> '(ii.il i fy for tlio exclusion
rl with this
vlioilior to
-------
Table 13: Aggregate Incremental Benefits and Costs for Exclusion Options2 (Present value1 over 10 years)
(in millions of dollars)
Alternative 2 Alternative 3 Alternative 4
51 processes-175 processes 51 processes-175 processes 51 processes-175 processes
!J Benefits
! INDUSTRY
i Exemption Petition 5.8-45.9 - 20.0-157.5 5.8-45.9 - 20.0-157.5 5.8-45.9 - 20.0-157.5
i Costs Saved
s
I* Costs Saved by not
having to alter
cr cease process
Added certainty -— -—• —•
l- EPA 2.6 - 8.9 2.6 - 8.9 2.6 - 8.9
j). Petition Processing
|'| - Savings
Total 8.4-48.5 - 28.9-166.4 8.4-48.5 - 28,9-166.4 8.4-48.5 - 28.9-166.4
ij ' Self Certification
Costs tos
INDUSTRY
-Sampling & Testing/
Theoretical ft.
Calculation .1-.4 - .4-1.3 6.1-8.6 - 20.8-29.73,4 12.0-16.9 - 41.3-58.1
-Recordkeeping .04-.14 - .14-.47 .04-.14 - .14-.47 .04-.14 - .14-.47
- Reporting .03-.09 .09-.32 .03-.09 - .f9-.32 .03-.09 - .09-.32
EPA
-Report Review .01-.02 - .02-.7 .01-.02 - .03-.7 .01-.02 - .02-.7
-Enforcement -—
Total .18-.69 - .65-1.8 6.2-8.8 - 21.0-31.2 12.1-
15.0 - 41.6-59.6
fusing a 10% discount rate
^Alternative 2: Only theoretical assessments required fot exclusion
Alternative 3: Theoretical assessment and/or testing acceptable for exclusion.
Alternative 4: Only testing acceptalbe for exclusion
(Alternative 1 — the alternative in which only the exemption petition process vas _ •• ,-. .-:-0l with closed
and controlled processes -- is used as the baseline against which to measure cos'.s ;"ic D«=-srr.tr ^f the other
Alternatives; i.e. zero costs and benefits are implicitly associated with this alternative.
JThe range of costs is very largo since under this alternative firms are given the c^sicc ••••'••»:.•.•...• to tes1; ..'.
yerEorm a theoretical calculation to qualify for the 'jxclusion
The rarnje. oE costs presented hert assumes that 5U'i oE firms will pertorm thoorer. . .M , . jVfSRmunts .im) lot w
-------
estimates of net Dene Cits. Cor firms* that must do frequent testing
(including air sampling) to qualify for exclusion. It is
important to note that these net benefit figures do not include
the benefits in cost savings from added certainty and from not
having to alter or cease production, nor the costs of enforcement
for EPA. It is likely that inclusion of these unquantified
benefits and costs would result in larger net benefits since the
enforcement costs to Kt"A are not likely to outweigh the benefits
of added certainty and avoidance of production changes.
The net benefits of Alternative 2 -~ the regulatory strategy
in which EPA would only require that theoretical calculations be
done for certification -- are obviously a lot higher than for
aither of the otner two alternatives. The present value of net
benefits for that alternative ranges from $153,uys to $947,478
per process, whereas net benefits range from -$0 to $947,478
under the alternative chosen by EPA, and from -$0-$713,717 under
the alternative where only testing would be permitted to qualify
for exclusion.
D. Aggregate Incremental Costs and Benefits of Exclusion
Policy Options
Table 13 aggregates the incremental costs and benefits of
the three exclusion alternatives over the total number of
processes which may be affected oy the exclusion. The cost
ranges within each category represent the 1U year discounted (10%
real rate) present value of benefits and costs for 51 processes
-43-
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to 175 processes. Aggregate incremental benefits, range from
$8.4 million for 51 processes, to $166.4 million for 175
processes. Incremental benefits will be the same under all of
the alternatives considered.
The incremental costs range from .$18 million under the
second alter.-ative (where only theoretical calculations need be
done for self-certification), to $59.6 million under Alternative
4, where only testing would be acceptable for certification for
exclusion. The range of incremental costs for the alternative
chosen by EPA is given assuming that 50% of the firms which
certify will do a theoretical calculation, and the other 50% will
conduct testing for certification. Under that assumption the
incremental costs associated with the EPA policy (Alternative 3)
range from $6.18 million to $31.2 million.
Assuming 175 processes take advantage of this rul<;; n'< ing,
net benefits range from -$0 under Alternatives 3 and 4, to $166
million under Alternative 2 (where theoretical calculations would
be sufficient for self-certification). for the alternative
chosen by EPA net benefits range from $0 to $145.4 million if 175
processes take advantage of the exclusion (<.:•''lining one-half of
the firms affected
-------
Table 14: Summary Table: Aggregate Net Benefits
(in millions of dollars)
.,1
Number of processes affected:
51 processes 175 processes
Al ternative 2
(theoretical
7.71-48.32 27.1-165.75
assessments only)
Alternative 3
or theoretical
Alternative 4
permitted )
(testing and/
assessments )
(only testing
0-42. 32 0-145. 43
0-36. 44 0-124. 85
iAs measured here, NET BENEFITS = [(Exemption Petition Cost
Savings to Industry) + (EPA petition processing savings)] -
(Self-Certification Costs to Industry)
' ' 'It is assumed that Net Benefits will never be negative
since firms will choose the least cost alternative in order to
continue manufacturing, i.e. if certification costs associated
with the exclusion rule are greater than the costs of filing
exemption petitions annually then firms will choose to file
exemption petitions rather than certify for exclusion.
-45-
-------
As has been mentioned before, the range of net benefits
estimated here does not include the benefits derived from the
added certainty associated with an exclusion policy nor the
benefits from not having to cease or alter certain types of
processes. Also, enforcement costs to EPA (outside of report
review costs) have not been quantified. It is probably safe to
say that i€ these benefits and costs could be quantified the net
benefits of all of the alternatives would be increased
significantly.
-46-
-------
REFERENCES
G-1A. 1981a. Chemical Manufacturers Association. Comments in
response to two advanced notices of proposed rulemaking relating
'to the manufacture of PCBs below 50 pprn. 'November 25.
Washington, D.C.: Office of Toxic Substances, U.S. Environmental
Protection Agency. EPA Docket Nbs. OPTS - 62013 and OPTS-62014.
G-1 A. 1901b. Chemical Manufacturers Association. "The Analysis
of Chlorinated Biphenyls". August. 21. Washington, D.C.: Office
of Toxic Substances, U.S. Environmental Protection Agency. EPA
Docket No. 62017.
EPA. 1982a. Environmental Protection Agency. Motes from
Economics and Technology Division Meeting.to discuss chemical
process changes for purposes of PCB Closed/Controlled
Rulemaking. September 9, 1982. Washington, D.C.
EPA. 1982b. Environmental Protection Agency. Notes from
telephone conversation between George Wall ash, OAQPS, EPA, and
Amy Moll, OTS, regarding costs of doing stack sampling.
September 14, 1982. Washington, D.C.
MHI. 1982a. Midwest Research Institute. Methods of Analysis
for Incidentally Generated PCBs - Literature Review and
Preliminary Recommendations" (Draft Interim Report). April 7,
Washington, D.C.: Office of Toxic Substances, U.S. Environmental
Protection Agency. EPA Docket No. 62013.
SRI. 1982. SRI International. Cost Estimates for
Implementation of MR I Analytical Protocol^ for Itic identally
Generated PCBs. August 23, 1982. Washington, D.C.: Office of
Toxic 3ubstances, U.S. Environmental Protection Agency.
Versar. 1982a. Versar Materials Balance Information in
Inadvertently Generated PCBs. April 22. Washington, D.C.:
Office of Toxic Substances, U. S.. Environmental Protection Agency.
Versar. 1982b . Versar List of Plants and Chemical Manufacturing
Processes Known or Suspected to Generate PCBs as Impurities.
September 8, 1982 Memo to Liz Bryan, et. al. Office of Toxic
Substances, U.S. Environmental Protection Agency.
-47-
-------
Appendix A
End-Products of Manufacturing Processes in Which PCBs are
Incidentally Generated
(Versar, 1982a,b)
Dyes
diaryl ide yellow
dyes/pigments made with halogenated solvents
halogenated dyes/pigments
halogenated solvents, unspecified
phthalocyanine
Organic Chemicals
al kyl benzene
alkyl chlorophosphine derivatives
benzene chlorination (process)
benzene phosphorous dichloride
biphenyl derivatives
carbon tetrachloride
chlorinated aryl phosphines
chlorinated naphthalene derivatives
chlorinated phosphate ester
chlorobutane derivatives
chlorosilane derivatives
chloroxylene derivatives
diphenyl oxide and derivatives
ethyl benzene
halogenated solvents, unspecified
-48-
-------
monochlorinated butylated diphenyl
monochlorinated terphenyls
oryano phosphorus trichloride derivative
pentachloranitrobenzene
ph.enyl chlorosiianes
phenyl siloxanes
polychlorinatea terphenyls
tetrachloraethylene
uiTi chloride
-------
Summary of Inudvortont Product Ion of I'CDu >>y Concunt ri.»:uud (ppin)
2«i-SO*««
Sulitota 1
50-200
2ml -SOI)
500-1 200
1 2l)0-IO,OOO
HOI) -) 00,000
Sul, lota 1
.1 1
Typo of Number of
I'lui.-oaa Scenario I*
Cloaud 4 -
Controlled 4O -
Othef than 87 -
Clouud 4 -
Controlled 40 -
Othor than 87 -
<50 ppca T31 -
ClouoJ
Controlled
Olliar than
1 Closed
Control led
Othar tlian
CloBod
Controlled
Othur than
CloauJ
Control led
Other than
Clouud
Controlled
Othur than
>50
0
8
0
6
0
0
k
0
1
-
-
0
-
-
0
-
-
0
-
-
0
0
-
157
1
1
16
1
14
1
3
2
3
4
26
—
Prncuaauo
* Suunut to 2 t
15
153
332
15
153
332
•"§60
0
7
0
6
0
1
1
526
1
- 5
- 12
O
- 5
- 10
0
- 4
0
0
- 5
0
0
- 4
0
Quantity of I'Clla (Ilia)
t Ui:ciiatlo 1 Scunnrlo 2
0.7 - 1.0
6026 - 10,006
6056 - 17,030
0.7 - 1 U
6026 - 18,006
6049 - 17, (HO
1'CDa pur I'MK.'utia (lliu)
iicuiiiirlo 1 Scenario 2
0.2
173
78
0.2
173
70
(INK IIIIK
0
10,008
0
1140
•
0
0
5000
0
25000
59
-
-
0
-
-
0
-
-
0
-
-
0
0
-
/
125
14770 1O,
125 0
5011 1149
125 0
4,000
5125 5000
4000
25000
2'JOOO
r?, 044
0 - 4131
008 - 10,764
0
- 4131
- 1905
0
- 4.125
0
0
- 9125
0
0
- 29000
0 '
0
1259
0
0 -
192 -
0
0 -
0 -
0
5000 -
0 -
0
0
25000 -
(INK
- 125
- 92U
125
422
125
1333
2563
1333
7250
tINK
0
1440
0
0 -
192 -
0
0 -
0
0
5000 -
0
0
25000 -
0
- 026
- 903
826 ,
191
IOJ1
1825
7250
,027 - 81,081
* t nv: I u-lu-l In nioi'o than one plin category t>ucuu:iu thora lu lii«.uf fluiuitt Inform^t ion to ileturminu thu coi'ruct III*D oatu«jory .
'•In i iii^ uijuiuiio tnu "control led" category -my Include (iroouauos who to thu (iro>luut cont ilna up to 25 ;. I'CUa ( [iioi.eu
wliont i>ru.liu:tu contain >2£ ppm fall Into the "oUior than" catuwi i>rocuuuuu uhuru
[.i •! l.i.;i :, ciintaln >50 [n'
-------
Appendix C
AIR SAMPLING (from stacks)
Cost Breakaown
Act ivity
Hours
5 Days (includes travel time)
Travel Costs
a. Round-trip airfare y $200 each
b. 5 nights hotel y $75/night
c. 5 days of meals ? $34.50/Cay
Data Reduction/Report Writing
200
Costs
1.
2.
3.
Sampling Equipment Preparation 100
Site Preparat ion/Equ ipment Installation
Four-Man Sampling Crew for 160
$4,300
S10,000
$6,880
$800
$1,500
S 6 90
$2,990
$t 600
TOTAL
$32,770
SOURCE: EPA 1982b
-51-
-------
Appendix 3
Zst±sa-£ir^r Ccsts ts Industry cf Filir.c an
-
1» Development of an Analytical Method to
Quantitate ?C2s in Organic Pigments
2,
2.
4.
5.
6.
7.
2.
9.
Analytical Testing Progvan ca Raw
Materials &. Finished Products
Process Heforaulation for Product
Compliance '
Record Seeping with Manufactured
Products i Purchased 2aw Materials "
Custocer Assurance Data Provided
en Products
Administrative Tine
Legal Drafting and Filing
riant Survey for Ixposure Levels
Coopany & Trade Association Meetings
TOTAL ACTIVITY IS FTLIXG EXEMPTION .
APPLICATION
EFTORT CPersor. Tears)
Technical
0.50
Q.2C
.
2.50
Secretarial
0.1
0.1
•
•
0.1
Managerial
.
0.1
0.1
0.1
0..1
0.1
0.85
A??
cc
•
•
Bote: Specific hourly and financial burden es-tiitatas are not
riven here tn imin.tain. ccnfidentikli-tv
-52-
-------
Appendix D (cont.)
Estimated Costs to Industry of Filing an
Exemption Petition
Company 2
Hours Cost
Managerial — $4,500
Technical
Analytical Testing -- $9,500
Travel — $2,000
Total $16,000
Company 3 Hours Cost*
Managerial 280 $18,760
Technical 120 $5,160
Clerical 60 $1,020
Total ^ ! $24, 940
'*Wage rates used to arrive at cost estimates:
$67/managerial hour, $43/technical hour, $17/clerical hour
-53-
-------
Appendix E
Description of Samples to be Tested for PCB Concentration
SAMPLE PRODUCT-1
Description: Clear Liquid
Extraction: None
Cleanup: None
Analysis: Direct in jection/CGC/EIMS
Anticipated Levels of PCB's: 1-100 ug/g. All horaologs present
Anticipated Levels of Interferents: Negligible
SAMPLE PRODUCT-2
Description: Opaque, viscous oily liquid
Extraction: Dilute 1/100, filter off solid (F2)
Cleanup: Liquid (Fl) - Florisil column cleanup
Solid (F2) - Digest with acid, refilter and extract
PCBs into hexane
Analysis: CGC/EIMS
Anticipated Levels of PCBs: 100-1, 000 • ug/g, C^^Cl - C12H5C15
presents
Anticipated Levels of luterferents: Twenty-five chlorinated
species from chloroform through C^Cl^ are known to be
present. C^Clg is present at about 40%; all
chlorobenzenes are present, including CgClg at 10%.
Sample assays at 50% chlorine
SAMPLE PRODUCT-3
Description: Colored Powder
Extraction: Dissolve in heated I^SO^, extract three times with
hexane, dry on Na2S04 column, concentrate the
appropriate volume
Analysis: CGC/EIMS
Anticipated Levels of PCBs: 100 ug/g total; niixture of C^HjCl
iso:ners
Anticipated Levels of Interferences: Minimal Chlorinated; may
semivolatile hydrocarbons, aromatics, and nitrogen
bases
SAMPLE WATER-1
Description: Industrial wastewater
Extraction: Method 603
Cleanup: Method 608
Analysis: CGC/EIMS
Anticipated Levels of PCBs: 50 ug/Liter total, 50 isomers over
all homologs -
Anticipated Levels of Interferences: 100-1,000 ug/Liter each of
10 PNAs, 6 chlorinated pesticides, and 4 chlorophenols
-54-
-------
SAMPLE AIR-1
Description:
Extract ion:
Florisil, aqueous condensate, and hexarie rinse (3
containers) from modified ^ethoci 5 train (assume
sample is in-house)
Florisil -- soxhlet, 4 hours.' with hexane
Aqueous sample - liquid-liquid partition with
hexane-
Hexane Rinse - back extract with water
Combine all extracts
Cleanup: ShaKe hexane extract with concentrated sulfuric acid
Analysis: CGC/EIMS
Anticipated Levels of PCRs: 10 uq/m^ (10m of air sampled)
total; 10 isomers C12HgCl throuqh C12H7C13; mostly a
mixture of the three C^2HgCl isomers
Anticipated Levels of Interferences: similar levels of PCNs and
chlorobenzeries; some chloraliphatics
-55-
-------
Appendix F
Calculation of Wage Rates for EPA Personnel
I. Managerial hourly wage rates:
0 Assumed GS-15 (step 5) annual salary based on."Proposed
Pay Schedule for Federal White Collar Employees"
(August, 1982): $55,025
0 Allow 50% overhead costs:
$55,025 x 1.5 = 582,537
0 2,080 manhours/year
$82,537-r2,080 hrs. = $40/hour
II. Technical hourly wage rates:
0 Assumed GS 12/13 (step 5) annual salary based on
"Proposed Pay Schedule for Federal White Collar
Employees" (August, 1982): $33,290 + 39,586)
2 = $36,438
0 Allow 50% overhead costs:
$36,438 x 1.5 = $54,657
0 2,080 manhours/year
0 $54,657-^2,080 S26/hour
III. Clerical hourly wage rates
0 Assumed GS 4/5 (step 5) annual salarly based on
"Proposed Pay Schedule for Federal white Collar
Employees" (August, 1982): ($13,541 + 15,153)
2 = $14,347
0 Allow 50% overhead costs:
S14,347 x 1.5 = $21,520
0 2,080 manhours/year
0 21,520T 2,080 =$10/hour
-------
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