&EPA
UniM States
ErevirDfi
Agency
National Emission Standards for Hazardous Air
Pollutants: Site Remediation
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EPA-452/R-03-016
August 2003
National Emission Standards for Hazardous Air Pollutants: Site Remediation
By:
RTI International*
Center for Regulatory Economics and Policy Research
Research Triangle Park, North Carolina 27709
Prepared for:
US. Environmental Protection Agency
Office of Air Quality Planning and Standards
Office of Air and Radiation
Research Triangle Park, NC 27711
*RTI International is a trade name of Research Triangle Institute.
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CONTENTS
Section Page
1 Introduction 1-1
1.1 Agency Requirements for an EIA 1-1
1.2 Summary of the Source Category 1-2
1.3 Summary of Potential Economic Impacts and Market Adjustments ... 1-3
1.4 Organization of this Report 1-5
2 Affected Industries and Engineering Costs 2-1
2.1 Characterizing the Remediation Activities Affected by the Rule 2-1
2.2 Potentially Affected Industries 2-2
2.2.1 The BRS Data 2-3
2.2.2 The Limitations of the BRS Database 2-3
2.3 Control Technologies and Compliance Cost Estimates 2-4
2.3.1 Control Technologies 2-5
2.3.2 Control Cost Estimates 2-6
2.3.3 Monitoring, Inspection, Recordkeeping, and Reporting Costs . 2-6
2.3.4 Formatting Engineering Cost Estimates for Economic Analysis 2-7
2.4 Summary of Estimated Control Costs for Potentially Affected
Industries 2-7
3 Economic Impact Analysis: Methods and Results 3-1
3.1 Qualitative Discussion of Economic Impacts on Firms and
Consumers 3-1
3.1.1 Firm-Level Decisions 3-2
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3.1.1.1 Remediation Resulting from Past Production
Decisions 3-2
3.1.1.2 Remediation Resulting from Future Production
Decisions 3-3
3.1.2 A Qualitative Analysis of Market Impacts 3-4
3.1.3 Impact on Consumers and Social Welfare 3-5
3.2 Selection of Industries for the Economic Impact Analysis 3-6
3.3 Economic Impact Methodology and Results 3-6
3.4 Small Business Impacts 3-7
3.5 Conclusions and Qualifications 3-12
3.5.1 Conclusions 3-12
3.5.2 Qualifications 3-12
References R-l
IV
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LIST OF FIGURES
Number Page
2-1 Distribution of Total Annual Compliance Costs by Industry ($1997) 2-9
3-1 Market for Off-Site Waste Treatment Services 3-3
3-2 Marginal Cost Curve for Final Market Good 3-4
3-3 Market Equilibrium Without and With Regulation 3-5
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LIST OF TABLES
Number Page
2-1 Total Annual Control Costs (TACC) for Site Remediation MACT by
Industry: 1997 BRS Data Set 2-8
3-1 Economic Data for 15 Industries with Highest Total Annual Control
Costs (TACC) 3-8
3-2 SIC and NAICS Codes for 15 Industries with Highest Total Annual
Control Costs 3-9
3-3 Economic Impact Screening Analysis 3-11
VI
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LIST OF ACRONYMS
BRS:
CAA:
CSR:
EIA:
EPA:
GDP:
HAPs:
LQG:
MACT:
MIRR:
NAICS:
NESHAP:
NPL:
NSPS:
NTI:
OAQPS:
OSWRO:
RCRA:
ROS:
SIC:
SVE:
TSD:
VOCs:
Biennial Reporting System
Clean Air Act
Cost-to-sales ratio
Economic impact analysis
U.S. Environmental Protection Agency
Gross domestic product
Hazardous air pollutants
Large Quantity Generator
Maximum achievable control technology
Monitoring, inspections, recordkeeping, and reporting
North American Industrial Classification System
National Emissions Standard for Hazardous Air Pollutants
National Priorities List
New Source Performance Standards
National Toxics Inventory
Office of Air Quality Planning and Standards
Off-Site Waste and Recovery Operations
Resource Conservation and Recovery Act of 1976
Return-on-sales
Standard Industrial Classification
Soil vapor extraction
Treatment, Storage, and Disposal
Volatile organic compounds
vn
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SECTION 1
INTRODUCTION
The Clean Air Act's (CAA's) purpose is to protect and enhance the quality of the
nation's air resources. To accomplish this goal, the Act vested the U.S. Environmental
Protection Agency (EPA) with the authority to establish national emission standards for 188
hazardous air pollutants (HAPs) that cause or may cause adverse health effects or adverse
environmental and ecological effects.1 EPA has determined that site remediation activities can
be sources of organic HAPs (including benzene, ethyl benzene, toluene, vinyl chloride, and
xylenes) and other volatile organic compounds (VOCs). The range of potential human health
effects associated with exposure to these organic HAPs and VOCs includes cancer, aplastic
anemia, upper respiratory tract irritation, liver damage, and neurotoxic effects (e.g., headache,
dizziness, nausea, tremors). The proposed rule would implement Section 112(d) of the CAA by
requiring those affected site remediation activities to meet emission limitation, operating limit,
and work practice standards reflecting the application of the maximum achievable control
technology (MACT).
1.1 Agency Requirements for an EIA
Congress and the Executive Office have imposed statutory and administrative
requirements for conducting economic analyses to accompany regulatory actions. Section 317
of the CAA specifically requires estimation of the cost and economic impacts for specific
regulations and standards proposed under the authority of the Act.2 The Office of Air Quality
Planning and Standards' (OAQPS') Economic Analysis Resource Document provides detailed
instructions and expectations for economic analyses that support rulemaking (EPA, 1999b). In
the case of the site remediation MACT standard, these requirements are fulfilled by providing an
overview of potential
'EPA must periodically review the list of HAPs and, where appropriate, revise this list by rule. In addition, any
person may petition EPA under Section 112(b)(3) to modify the list by adding or deleting one or more
substances.
2In addition, Executive Order (EO) 12866 requires a more comprehensive analysis of benefits and costs for
proposed significant regulatory actions. Office of Management and Budget (OMB) guidance under EO
12866 stipulates that a full benefit-cost analysis is required only when the regulatory action has an annual
effect on the economy of $100 million or more. Other statutory and administrative requirements include
examination of the composition and distribution of benefits and costs. For example, the Regulatory
Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement and Fairness Act of 1996
(SBREFA), requires EPA to consider the economic impacts of regulatory actions on small entities.
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• industry-level impacts and
• societal-level impacts (qualitative discussion).
1.2 Summary of the Source Category
Site remediation is one of the approximately 170 categories of sources included in the
National Emissions Standard for Hazardous Air Pollutants (NESHAP) source category list. Sites
undergoing remediation include, but are not limited to, voluntary cleanup actions and
underground storage tank sites. However, not all sites will be subject to the rule. Site
remediation includes, but is not limited to, the following activities: contaminated soils cleaning,
soil vapor extraction (SVE), and groundwater cleanup or removal of hazardous substances. Site
remediation does not include remediation activities at gasoline stations, cleanup of
contamination at farm or residential sites, or the installation of controls at municipal solid waste
landfills to comply with the New Source Performance Standards (NSPS) or CAA, Section ni(d)
emission guidelines (Nizich, 2001). Superfund NPL sites and permitted or federal order RCRA
corrective action cleanups are exempted from the rule.
The site remediation source category potentially includes a wide variety of industries.
Because site remediation activities are not specific to a particular industry or process, creating a
comprehensive list of all potentially affected industries is not possible. For the economic impact
analysis, EPA used the 1997 Biennial Reporting System (BRS) database to identify a sample of
facilities that generated remediation wastes in 1997 and who might have been subject to the rule
if the rule had been enacted in that year. The data were used to estimate the quantity of
remediation wastes generated by various regulatory categories, the physical form of the
remediation wastes generated (e.g., inorganic liquids, organic solids, or organic sludges), and the
quantities and methods used to manage and treat the remediation wastes on-site (e.g.,
incineration, aqueous organic treatment, or stabilization). The Agency believes that the 1997
BRS database provides a fair representation of nationwide baseline conditions for site
remediations activities. A comparison of the total quantity of remediation-derived wastes
reported in the BRS database for the years 1993, 1995, and 1997 showed that the total quantity
of remediation waste treated on-site for these years remained about the same, approximately 22
million tons (Nizich, 2001).
The engineering cost analysis (Zerbonia, 2001) indicates that 490 different Standard
Industrial Classification (SIC) codes had facilities generating remediation waste streams in 1997.
Of these, four SIC codes generated more than 500 waste streams per code, 28 SIC codes
generated more than 100 waste streams per code, 48 SIC codes generated more than 50 waste
streams per code, 84 SIC codes generated more than 25 waste streams per code, and 190 SIC
codes generated 10 or more waste streams per code. Major industry sectors that are engaged in
site remediation activities include industrial organic chemical manufacturing, petroleum
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refining, waste management (refuse), plating and polishing, aircraft, and semiconductors to list a
few.
1.3 Summary of Potential Economic Impacts and Market Adjustments
Implementation of the proposed rules will increase the costs of production at affected
facilities. The response of producers to the additional production costs associated with rule
compliance and the response of consumers to changes in market conditions determine the
economic impact of the regulation. The proposed rule may influence firms' choices of
remediation activities. For example, they may elect not to conduct the remediation or the
increased costs associated with on-site control of air emissions may encourage firms to use off-
site treatment for any remediation wastes generated. As a result, demand for off-site remediation
waste management services will likely increase, placing upward pressure on prices that would in
turn reduce the quantity of services demanded in this market. In addition to off-site remediation
waste materials management and treatment services, higher production costs for products
supplied by firms affected by the rule (i.e., higher on-site remediation costs and higher off-site
remediation service prices) may result in changes in the markets for their particular products.
Higher production costs can lead to reduced production of commodities and/or increased prices
for commodities. These potential changes in market prices and output will in turn affect
society's welfare through losses to consumers and producers.
As discussed above, the site remediation source category can include a large variety of
industries. Although the BRS database provides information on which firms might have been
affected if the rule had been implemented in 1997, EPA does not have information on the
industries and firms that will actually be affected when the rule is implemented. By the date at
which the rule is implemented, the remediation projects ongoing in 1997 will most likely be
finished. Given the lack of certain information on the affected industries and facilities and the
large number of potentially affected industries, we can only examine the general implications of
the rule using industry-level data from the most recent Economic Census (U.S. Bureau of the
Census, 2000). Given the uncertainty about which firms would be impacted, EPA determined
that the most appropriate way to analyze the industry data was at the SIC level because the BRS
data used the SIC system and the bridge between the SIC and NAICS codes was not one-to-one.
However, we also report the corresponding NAICS codes associated with the 15 industries in the
economic impact analysis.
The Agency employed an engineering or financial analysis that takes the form of
estimating impacts through the ratio of compliance costs to the value of sales (cost-to-sales ratio
or CSR) using total industry revenues, control costs, and accounting measures of profit. The
analysis assesses the burden of the rule by assuming the affected industries fully absorb the
control costs, rather than passing them on to consumers in the form of higher prices. One
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drawback of this approach is that it does not consider interactions between producers and
consumers in a market context. It is likely that some percentage of the control costs may be
passed along to other parties through various economic exchanges, in particular in the form of
higher prices for consumers. Therefore, it likely overstates the impacts on facilities and firms
affected by the rule and understates the impacts on consumers. The primary advantages of this
approach are its simplicity and its relatively limited data requirements.
Out of the 490 different SIC codes that had facilities generating remediation waste
streams in 1997, over 80 SIC codes were predicted to have annual compliance costs as a result of
the rule, and 15 industries accounted for 91 percent of the total annual compliance costs of $7.96
million.3 For the 12 industries with revenue data, all had CSRs less than 0.02 percent.
Profitability data for the SIC codes also show the lower quartile return on sales for industries
with data was between 0.4 and 1.8 percent (Dun & Bradstreet, 1997). None of the industries was
shown to have a CSR in excess of the lower quartile return on sales. Given the information
available to the Agency, it does not appear that the rule would impose significant costs on the
potentially affected industries. However, as discussed in more detail in the report, the nature of
the proposed rule and the data makes fully assessing the impact of the regulation difficult.
Small business impacts were particularly difficult to assess. As discussed in the
Preamble, this rule sets minimum standards to be met when parties engage in future site
remediation activities, but it does not itself require any party to undertake such activities. States
may choose to direct a party to undertake site remediation, or parties may undertake remediation
activities voluntarily. EPA anticipates that parties that undertake site remediation generally will
do so voluntarily and that the impact of this rule on those parties will not be significant. Further,
because States and other parties will decide whether to undertake site remediation activities, it is
extremely difficult, if not impossible, to predict how many or what types of small entities will
undertake such activities. The rule is structured to avoid impacts on small businesses. The rule
specifically excludes from its scope remediations conducted at gasoline stations, farm sites and
residential sites (on the ground that these remediations would not exceed the threshold for major
sources). Moreover, the rule would apply only to remediation sites located at a facility that is a
major source under the Clean Air Act and engages in a "MACT activity" (defined as a non-
remediation activity covered in the MACT list of major source categories pursuant to CAA
section 112 (c)). Such sources tend to be large businesses. The rule also contains emission
thresholds that are not likely to apply to small businesses. For example, the rule exempts
sources where the total annual quantity of HAP contained in all extracted remediation material at
the facility is less than 1 megagrams (Mg) per year. For these reasons, EPA certifies that the
3$1997. EPA adjusted the $2000 estimates using a cost factor (0.9753) developed from the Chemical
Engineering Composite Plant Cost Index.
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rule, if promulgated, will not impose a significant economic impact on a substantial number of
small entities.
1.4 Organization of this Report
The remainder of this report supports and details the methodology and the results of the
EIA of the site remediation NESHAP.
• Section 2 presents an overview of the site remediation source category and the
estimated engineering control costs.
• Section 3 describes the EIA methodology and reports economic impact results. This
section also includes qualifications of the analysis.
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SECTION 2
AFFECTED INDUSTRIES AND ENGINEERING COSTS
Section 2 describes the remediation activities affected by the rale and the methods used
by the Agency to identify potentially affected industries and calculate engineering compliance
cost estimates. The broad nature of the rule results in a large number of potentially affected
industries. Because of the difficulty in predicting which industries and companies will actually
be affected by the rale when it is implemented, the Agency considers the results to provide an
indication of the types of industries that will be affected and the possible distribution of impacts.
The economic analysis, which is based on the data described in this section, provides a similarly
general overview of the possible distribution of costs with a qualitative discussion of likely
market impacts.
2.1 Characterizing the Remediation Activities Affected by the Rule1
A site remediation is performed in response to the release of hazardous substances into
the environment (e.g., soil, groundwater, or other environmental media). It involves taking
appropriate action to remove, store, treat, and/or dispose of the hazardous substances to the
extent necessary to protect human health and the environment. The term "cleanup" generally
refers to the activities performed to address the hazardous substance contamination. This term
frequently is used interchangeably with the term "remediation."
Site remediations can be performed to address hazardous substance contamination
resulting from either past or current human activities. Examples of such activities include
accidental releases of chemical substances; undetected leaks in tanks or pipelines; releases from
the use of incorrectly designed or poorly maintained equipment for managing materials
containing hazardous substances; improper disposal of hazardous substances in surface
impoundments, containers, waste piles, or landfills; and abandoned hazardous substances.
For the purpose of implementing the rule, a site remediation is one or more activities or
processes used to remove, destroy, degrade, transform, or immobilize organic HAP constituents
in soils, sediments, groundwater, surface waters, or other types of solid or liquid environmental
media as well as "pure" materials that are not mixed with environmental media. The rale would
not apply to site remediations specifically excluded from applicability. The proposed rule would
not apply to the following:
'This section is based on information in Nizich (2001).
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• site remediation involving the cleanup of radioactive mixed waste managed in
compliance with all applicable regulations under Atomic Energy Act and Nuclear
Waste Policy Act authorities
• site remediations performed to clean up remediation material containing little or no
organic HAPs; the proposed rule would not apply to any facility for which the owner
or operator demonstrates that the total annual organic HAP mass content of the
remediation material to be cleaned up at the facility site is less than 1 megagram per
year (Mg/yr)
• Superfund NPL sites and permitted or federal order RCRA corrective action cleanups
are exempted from the rule.
2.2 Potentially Affected Industries
The proposed NESHAP would affect owners and operators of facilities, subject to the
exceptions described in Section 2.1, that are major sources of HAP emissions and at which a site
remediation is conducted to clean up media or other material contaminated with any of the
organic HAP substances listed in the rule. Because of the nature of activities regulated by the
source category, a comprehensive list of SIC or North American Industry Classification System
(NAICS) codes cannot be compiled for businesses or facilities potentially regulated by this
action. The rule may be applicable to any type of business or facility at which a site remediation
is conducted to clean up media contaminated with organic HAPs and other hazardous material.
For many businesses and facilities subject to the rule, the regulated sources (i.e., the site
remediation activities) are not the predominant activity, process, operation, or service conducted
at the facility. The Agency is aware of site remediation activities potentially subject to the rule
being performed at facilities listed under SIC codes for petroleum refining, organic chemical
manufacturing, refuse systems, waste management, business services, miscellaneous services,
and nonclassifiable. Therefore, the industrial code alone for a given facility does not determine
whether the facility is or is not potentially subject to this rule (Nizich, 2001).
For the economic impact analysis, the Agency identified a sample of industries that
might be affected by the regulation using the best available data: the 1997 BRS database. The
remainder of Section 2.2 describes the BRS database and the limitations of using these data to
identify potentially affected industries.
2.2.1 The BRS Data
EPA, in partnership with the states, collects information biennially regarding the
generation, management, and final disposition of hazardous wastes regulated under RCRA, as
amended. The purpose of The National Biennial RCRA Hazardous Waste Report (Based on
1997Data) is to communicate the findings of EPA's 1997 BRS data collection efforts to the
public, government agencies, and the regulated community (EPA, 1999a). The report provides
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an overview of national hazardous waste generation and management practices;
data on waste-handling practices in the EPA regions, states, and largest facilities
nationally, including the quantity of waste generated, managed, shipped and received,
and imported and exported between states and the number of generators and
managing facilities;
data on each state's waste handling practices, including overall totals for generation,
management, and shipments and receipts, as well as totals for the largest 50 facilities;
• a list of large quantity generators that identifies every hazardous waste generator in
the United States that reported itself to be a large quantity generator in 1997; and
• a list of treatment, storage, and disposal facilities that identifies every hazardous
waste manager in the United States that reported itself to be a treatment, storage, or
disposal facility in 1997.
The BRS database provides information on the facility name, location, quantity of waste
generated by waste treatment category, SIC code, and other useful information. To generate
estimates of the annual control cost for facilities, it is necessary to have information on the
quantity of waste generated at the facility level, and the BRS is the best source of such
information.
2.2.2 The Limitations of the BRS Database
Using the 1997 BRS data to identify the affected industries raises a number of issues.
Most, if not all, of the remediation projects underway in 1997 will be completed by the year in
which the rule takes effect. Thus, the specific companies identified in the 1997 BRS database
may or may not incur compliance costs when the rule is implemented. In addition, the BRS data
do not include the activities of off-site waste treatment facilities, which will be subject to the
rule. However, the Agency anticipates that the off-site treatment facilities that would be subject
to the rule will already have the necessary control equipment as a result of complying with other
EPA rules. In addition, the quantity of shipped remediation waste for off-site treatment is
typically only a small percentage of the total quantity of remediation waste generated (e.g., < 6
percent in 1997). Thus, the Agency believes this rule should impose minimal costs on off-site
waste treatment firms. Furthermore, the BRS data identify only large quantity generators, which
may exclude many other waste generators.2 To the extent that large quantity generators are large
facilities must report their activities involving RCRA hazardous waste to BRS if they are either a RCRA-
defmed LQG or a TSD facility.
Large Quantity Generator: A generator is defined as a federal LQG if it meets any of the following criteria
during the year: [a] the facility generated in one or more months 1,000 kg (2,200 Ibs) or more of RCRA
hazardous waste; or [b] the facility generated in one or more months, or accumulated at any time, 1 kg (2.2
Ibs) of RCRA acute hazardous waste; or [c] the facility generated or accumulated at any time more than 100
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companies, small businesses may not be adequately represented in this database. Furthermore,
the BRS database does not identify which facilities are major sources of HAPs, so it is possible
that some of the firms in the BRS that generate waste are not major sources of HAPs and thus
would not be subject to the rule. In addition, the database would not include information on
firms that are major sources of HAPs but generate small quantities of waste. These firms may
still be required to comply with the rule but would not be identified in the BRS data.
Despite these limitations, the Agency believes the BRS data provide the best coverage of
potentially affected firms to conduct the economic impact analysis. As stated above, providing a
comprehensive list of affected industries is difficult because of the broad nature of the rule. The
National Toxics Inventory (NTI) is a database that can be used to identify major sources of HAP
emissions, but it does not contain the information on site remediation activities necessary to
calculate control costs. The Agency was unable to match the BRS data with the data on major
sources in the NTI. Therefore, it was determined that the BRS database provides the best
indication of the industries that might be affected by the rule.
2.3 Control Technologies and Compliance Cost Estimates3
The Agency calculated estimated compliance costs for the 490 potentially affected
industries. Below, we briefly describe the control technologies identified in the rule and the
method used to calculate the compliance costs.
2.3.1 Control Technologies
The proposed rule defines three groups of affected sources: process vents, remediation
material management units, and equipment leaks. The affected source for process vents is the
entire group of process vents associated with both in situ and ex situ remediation activities. The
affected source for remediation material management units is the entire group of tanks, surface
impoundments, containers, oil/water separators, and transfer systems used to store, transfer,
treat, or otherwise manage remediation material. The affected source for equipment leaks is the
kg (220 Ibs) of spill cleanup material contaminated with RCRA acute hazardous waste. The wastes that are
not to be counted in determining whether a site is a LQG include: (i) RCRA hazardous wastes managed in
systems regulated under the Clean Water Act (i.e., wastewater treatment plants) or the Safe Drinking Water
Act (i.e., underground injection wells), (ii) wastes that are recycled or reclaimed, and (iii) wastes regulated
only by a given state and not by RCRA.
Treatment, Storage, and Disposal Facility: This is a facility that treats, stores, or disposes of hazardous waste.
Treatment is any method, technique, or process designed to (1) change the physical, chemical, or biological
character or composition of any hazardous waste to neutralize such waste; (2) recover energy or material
resources from the waste; or (3) render such waste nonhazardous or less hazardous. Storage is the
temporary holding of hazardous waste until it is treated, disposed of, or stored elsewhere. Storage methods
include use of containers, tanks, and surface impoundments. Disposal is the discharge, deposit, injection,
dumping, spilling, leaking, or placing of waste so that it may enter the environment (air, land, or water).
3This section draws fromNizich (2001) and Zerbonia (2001).
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entire group of remediation equipment components (e.g., pumps, valves) that contain or contact
remediation material having a total organic HAP concentration equal to or greater than
10 percent by weight and are intended to operate for 300 hours or more during a calendar year.
Given the unique nature of the site remediation source category, the extent of information
currently available to the Agency, and the complexities of gathering additional meaningful
information, we decided to forgo statistically computing an emission limitation or identifying a
specific control technology that represents the MACT floor for site remediations. The MACT
floor for existing affected sources is some level of air emission control beyond no controls.
Because the provisions of Section 112 allow the Agency to select MACT for a source category
that is more stringent than the MACT floor (provided that the control level selected is technically
achievable and that we consider the cost of achieving the emissions reductions, any nonair
quality health and environmental impacts, and energy requirements associated with the selected
control level (CAA Section 112 (d) (2)), we chose to select the MACT technology directly.
To select a MACT technology from alternatives beyond the MACT floor for each
affected source, we looked at the types of air emission controls required under national air
standards for sources similar to those sources that potentially may be associated with site
remediations. These air standards are NESHAP for other source categories, particularly the Off-
Site Waste and Recovery Operations (OSWRO) NESHAP (EPA, 1994, as cited in Zerbonia
[2001]) under 40 CFR 63 subpart DD, and the air standards for RCRA hazardous waste
treatment, disposal, and recovery facilities under subparts AA, BB, and CC in 40 CFR parts 264
and 265. The control levels established by the emission limitation and work practices proposed
in the rule that are being implemented at existing sources subject to these similar rules
demonstrate that the control levels are technically achievable (Nizich, 2001).
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2.3.2 Control Cost Estimates4
According to the nationwide emission and control cost estimates memorandum
(Zerbonia, 2001), in estimating nationwide HAP emissions from site remediation sources, the
1997 BRS database was used to estimate the quantity of remediation wastes generated by various
regulatory categories (e.g., underground storage tanks), the physical form of the remediation
wastes generated (e.g., inorganic liquids, organic solids, or organic sludges), and the quantities
and methods used to manage and treat the remediation wastes on-site (e.g., incineration, aqueous
organic treatment, or stabilization). The 1997 BRS data were used to represent nationwide
baseline conditions for site remediations activities. A comparison of the total quantity of
remediation-derived wastes reported in the BRS database for the years 1993, 1995, and 1997
showed that the total quantity of remediation waste treated on-site for these years remained
about the same, approximately 22 million tons (this estimate includes some operations that are
exempt from the rule).
The estimation of control costs for site remediation activities was based on the
methodology developed for the OSWRO NESHAP (EPA, 1994, as cited in Zerbonia [2001]).
Using this methodology, overall control cost factors were developed to estimate the costs of
applying controls to the various remediation waste management and treatment system units (e.g.,
tanks, air and steam strippers, and process vents) based on the model unit type used to
characterize the remediation activity. Separate cost factors were developed for each of the
different waste management model units based on the "form" of the waste stream. Waste form
codes were assigned according to the waste description code reported for the waste stream. The
total annual cost for the control requirement is $7.80 million.
2.3.3 Monitoring, Inspection, Recordkeeping, and Reporting Costs
According to the nationwide emission and control cost estimates memorandum
(Zerbonia, 2001), the annual monitoring, inspections, recordkeeping, and reporting (MIRR) costs
were calculated based on the number of site remediation emission sources or system types and
the cost factors for MIRR source types, expressed as annual cost per emission source. The
engineering analysis used data obtained from EPA's 1997 BRS database to characterize the
number of emission sources within the remediation waste treatment category or system type that
would be required to apply controls. The cost factors used were those developed for the
OSWRO NESHAP; the methodology and derivation of the MIRR cost factors are discussed in
Appendix E of the OSWRO NESHAP BID, September 8, 1994. The costs are based on use of
the control technologies applicable to the various waste management and treatment system types.
To estimate MIRR costs the Agency had to determine the type of on-site process systems used to
4$1997. EPA adjusted the $2000 estimates using a cost factor (0.9753) developed from the Chemical
Engineering Composite Plant Cost Index.
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manage or treat the wastes (i.e., treatment methods). This information was obtained from
Section H, Box D of Form GM. The total annual cost for MIRR is $0.16 million.
2.3.4 Formatting Engineering Cost Estimates for Economic Analysis
The total quantity of waste managed5 and total annual compliance costs were estimated
for all the treatment categories (see Tables 6a and 7a of the control cost estimates memorandum
[Zerbonia, 2001]). Using this information, the Agency calculated the average annual control
cost per ton of waste managed in each treatment category. The BRS database lists the quantity
of waste generated by facility by treatment category. Multiplying the average control cost for
each treatment category by the number of tons of waste managed by a facility for each treatment
category and summing over all the treatment categories for each facility yields an estimate of the
annual compliance cost for the facility. Aggregating the estimated facility compliance costs over
SIC codes produces an estimate of the annual compliance cost for each SIC code in the BRS
data. The annual control cost estimates by SIC code are only approximations based on average
costs for each waste stream as calculated by the Agency. However, they should provide a basis
for a general assessment of the impact of the proposed regulation.
2.4 Summary of Estimated Control Costs for Potentially Affected Industries
Using the BRS database, of the 490 industries (by SIC) potentially affected by the rule,
four SIC codes generated more than 500 waste streams per code, 28 SIC codes generated more
than 100 waste streams per code, 48 SIC codes generated more than 50 waste streams per code,
84 SIC codes generated more than 25 waste streams per code, and 190 SIC codes generated 10
or more waste streams per code. Major industry sectors that are engaged in site remediation
activities include industrial organic chemical manufacturing, petroleum refining, waste
management (refuse), plating and polishing, aircraft, and semiconductors to list a few.
Using the methodology described above, the Agency estimates approximately 16 percent
of the 490 potentially affected industries identified in the 1997 BRS database might have faced
additional control costs associated with HAP and VOC emission reductions if the proposed
MACT standards had been implemented in 1997. According to the nationwide emission and
control cost estimates memorandum (Zerbonia, 2001), total control costs for this rule are
estimated to be $7.96 million6. Table 2-1 presents the total compliance costs for the top 15
industries potentially affected by the rule. These industries account for 91 percent of the total
national compliance cost estimate (see Figure 2-1).
5Wastes not potentially affected by the MACT applicability (i.e., CERCLA and RCRA Corrective Action sites
with source codes of A61, A62, and A63) were not included in the analysis.
6$1997. EPA adjusted the $2000 estimates using a cost factor (0.9753) developed from the Chemical
Engineering Composite Plant Cost Index.
2-7
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Table 2-1. Total Annual Control Costs (TACC) for Site Remediation MACT by Industry:
1997 BRS Data Set
SIC Code
3351
2819
9999
2869
3354
2491
3728
3334
2816
3861
9224
4953
3795
5171
Description
Copper rolling and drawing
Industrial inorganic chemicals, n.e.c.
Unclassifiable establishments
Industrial organic chemicals, n.e.c.
Aluminum extruded products
Wood preserving
Aircrat parts and equipment, n.e.c.
Primary aluminum
Inorganic pigments
Photographic equipment and supplies
Unknown
Fire Protection
Refuse systems
Tanks and tank components
Petroleum bulk stations and terminals
Subtotal
Other
Total
Total Annual
Control Costsa
$1,454,760
$1,164,347
$1,055,556
$893,113
$559,896
$465,774
$393,920
$288,344
$275,047
$194,294
$128,052
$116,520
$113,032
$83,487
$67,051
$7,243,193
$716,356
$7,959,549
Share of TACC
18%
15%
13%
11%
7%
6%
5%
4%
3%
2%
2%
1%
1%
1%
1%
91%
9%
100%
$1997. EPA adjusted the $2000 estimates using a cost factor (0.9753) developed from the Chemical Engineering
Composite Plant Cost Index. Note these cost also include in situ.
2-8
-------
TACC = $7.96 million
Petroleum Bulk
Stations and Terminals
(1%)
Other
(9%)
Copper Rolling
and Drawing
(18%)
Tanks and Tank
Components
(1%)
Refuse Systems
(1%)
Fire Protection
(1%)
Unknown
(2%)
Photographic
Equipment and
Supplies
(2%)
Primary Aluminum
(4%)
Industrial Inorganic
Chemicals, n.e.c.
(15%)
Unclassifiable
Establishments
(13%)
Aircraft Parts and
Equipment, n.e.c.
(5%)
Wood
Preserving
(6%)
Aluminum
Extruded Products
(7%)
Industrial Organic
Chemicals, n.e.c.
(11%)
Figure 2-1. Distribution of Total Annual Compliance Costs by Industry ($1997)
2-9
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SECTION 3
ECONOMIC IMPACT ANALYSIS: METHODS AND RESULTS
The underlying objective of the economic impact analysis is to evaluate the effect of the
proposed regulation on the welfare of affected stakeholders and society in general. The
proposed rules to control air pollution sources from site remediation activities will affect a wide
variety of industries. Implementation of the proposed rules will increase the costs of production
at affected facilities. The response of producers to the additional production costs associated
with rule compliance and the response of consumers to changed market conditions determine the
economic impact of the regulation. Specifically, the increased costs of production associated
with the rule may induce affected owners to change production processes, inputs, or output rates
or to cease operations. If the remediation is not required, the increased costs associated with the
rule may alter the firm's decision about whether or not to remediate. These actions have broader
societal implications because they are transmitted through market relationships such as price and
output to producers and consumers.
EPA typically develops partial equilibrium computational models to measure the size and
distribution of economic impacts associated with air pollution regulations. These models
account for behavioral responses by producers and consumers to the regulation (i.e., reactions by
producers and consumers result in changes in prices and production levels). Many attempts were
made to collect data in the format needed for such an analysis. After critical review, however,
the Agency concluded that the data were insufficient to develop a market model. As a result, the
Agency developed a qualitative description of potential market impacts of the rule and
conducted a simple screening analysis, described in more detail below, to develop quantitative
measures of the economic impacts associated with the rule.
3.1 Qualitative Discussion of Economic Impacts on Firms and Consumers
The proposed rule will potentially change the decisions made by firms regarding the
remediation of contaminated media (e.g., soil or ground water) and ultimately could influence
decisions regarding their primary production operations. As a result of changes in the cost of
production at the firm level, supply and demand for services will directly impact the affected
industry and may indirectly impact other industries. Below we describe the possible actions for
firms that will have sites they need to remediate at the time the rule is implemented and the
decision firms face about the generation and clean up of future contaminated media. We discuss
the possible impacts on market supply and demand for the final products in the affected industry
3-1
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and indirect impacts on other industries. Finally, we summarize the possible impacts on
consumers and social welfare.
3.1.1 Firm-Level Decisions
In baseline, firms choose a mix of products, level of production, and method of
production. The production process generates materials and residual wastes that can
contaminate the local media at the site, both anticipated and accidental, that must be remediated
either on-site or off-site. Firms that remediate on-site can choose between one or more on-site
treatment methods and purchasing remediation services from off-site providers. Off-site waste
handlers will also choose between one or more treatment methods to handle the flow of waste
they receive from site remediation projects and other sources. Given these choices, firms will
attempt to minimize costs of complying with new regulations.
3.1.1.1 Remediation Resulting from Past Production Decisions
Depending on the choices firms have made in the past, there may be contaminated media
that must be remediated when the proposed rule is implemented. These firms face a choice of
remediating the waste or materials on-site or shipping off-site to a third-party remediator. The
rule will potentially affect the costs of both alternatives. Firms that decide to remediate waste
materials from site remediation projects on-site will face increased costs for remediation due to
the rule. The rule may also change the relative cost of different remediation alternatives, leading
the firm to change the way it treats remediation waste materials. In either case, the cost of on-
site remediation will increase, causing an increase in the cost of producing the final goods
supplied by that firm.
Alternatively, the firm could decide to send its remediation waste materials off-site for
treatment. As discussed in Section 2, the Agency assumes that the off-site waste treatment firms
have already installed the required control technology, so the proposed rule should not impose
additional costs on off-site waste treatment facilities. However, if demand for off-site waste
treatment increases as a result of the rule, then the cost of off-site remediation may increase.
Figure 3-1 shows the up ward-sloping supply curve for off-site remediation services, Soff, and a
baseline demand curve, D. Assuming that the off-site remediation industry is perfectly
competitive, an increase in demand to D' will result in an increase in the price of off-site
remediation services from Poff to Poff.
3-2
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MCfinal good'
|yjpfinal good
Q
Figure 3-1.
Regardless of whether the site remediation waste material is treated on-site or off-site, the cost of
remediation may increase, leading to an increase in the cost of producing the final market goods
supplied by the firm. In Figure 3-2 the marginal cost curve for producing the final market good
for a firm in a perfectly competitive industry will shift upwards from MCfmalgoodto MCfmalgood'
indicating an increase in the marginal cost of producing a unit of the final market good.
The following firm decision rule summarizes the options the firm faces:
min[c(poffy,C(bon,con)]
where C(poff) is the cost of off-site remediation given the price of remediation services.
C(bon,con) is the total cost of on-site remediation, which is equal to the baseline cost of on-site
remediation (bon) and the additional cost associated with the rule (con). The firm will choose the
treatment strategy that minimizes the cost of treating site remediation waste given the additional
costs imposed by the rule directly on firms that remediate on-site and indirectly through an
increase in the demand for off-site treatment services for firms that send their waste off-site for
treatment.
3.1.1.2 Remediation Resulting from Future Production Decisions
The proposed rule may also influence future production decisions that affect the
generation of wastes that could contaminate local media and ultimately need remediation. In this
context, firms have more options than when they are facing the choice of how to clean up
existing contaminated media. In addition to the choice between on-site and off-site management
of remediation materials, looking to the future firms may choose to
3-3
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• change output levels to reduce the amount of waste generated or the likelihood of an
accidental release of hazardous waste,
• change the mix of outputs to produce products that generate less waste or reduce the
likelihood of an accidental release of waste,
• change production processes or the mix of inputs to reduce the amount of waste
generated or reduce the likelihood of an accidental release of waste, or
• cease operations if total revenues are less than total costs (production costs plus
remediation costs).
3.1.2 A Qualitative Analysis of Market Impacts
P'
P
gfinal
;ood'
o final g
;ood
good
Q' Q
Figure 3-3. Market Equilibrium Without and With Regulation
The Agency qualitatively evaluated the potential market impacts of the rule using the
model of perfect competition. In these markets, buyers and sellers exert no individual influence
on market prices. Price is set by the collective actions of producers and consumers of products
and services who take the market price as a given in making their production and consumption
choices. Figure 3-3 illustrates a market in which prices and quantities for final goods are
determined by the intersection of market supply and demand curves. The baseline consists of a
market price and quantity (P, Q) that is determined by the downward-sloping market demand
curve (Dfmalgoods) and the up ward-sloping market supply curve (Sfmalgoods).
Incorporating these regulatory control costs results in an upward shift (from sfmalgoods to
Sfmalgoods) of the aggregate supply curve. At the new equilibrium with the regulation, the market
3-4
-------
price increases from P to P' and market output declines from Q to Q'. In the long run, if the
firms decide to change the mix of inputs or outputs produced as a result of the regulation, this
will further affect market prices and quantities. To the extent that firms are able to adapt their
processes to reduce the need for site remediation or to reduce the cost of treating the waste from
site remediation, the long-run costs of the rule may be lower.
3.1.3 Impact on Consumers and Social Welfare
The analytics above suggest we could expect upward pressure on prices in industries that
need site remediation services, so prices will be directly or indirectly affected by the proposed
regulation as producers make new choices. Among other things, the magnitude of these price
changes would depend on
• the size of the unit control costs relative to market price,
• the elasticity of consumer demand for the products,
• the elasticity of supply by the producers, and
• the number of affected firms and their share of the market.
Higher production costs and increases in price reduce quantity demanded by consumers and
output by firms for each product, leading to changes in economic welfare of consumers and the
profitability of firms. These market adjustments would determine the social costs of the
regulation and its distribution across stakeholders (producers and consumers). Without more
detailed data and analysis, predicting the magnitude of the social costs of the regulation is
difficult.
3.2 Selection of Industries for the Economic Impact Analysis
As discussed in Section 2, the Agency identified over 490 industries (SIC codes) that
would potentially have been affected by the rule using the 1997 BRS database. Out of this 490,
over 80 industries were identified that might have faced additional control costs if the proposed
MACT standards had been implemented in 1997. The data requirements for collecting data on
each of these industry's activities (i.e., company financial data for each affected company within
the industry and market data for each affected industry) are substantive given the large number
of potentially affected industries. Therefore, the Agency employed the following strategy to
select a limited number of industries for the economic analysis. First, the Agency aggregated the
facility-level costs by SIC code to compute the total costs of the rule for each affected SIC code
(presented in Table 2-1). The cost estimates do not include Superfund NPL sites and permitted
or federal order RCRA corrective action cleanups that are exempted from the rule. Out of this
list, EPA identified the 15 industries with the highest total annual compliance cost estimates.
These 15 industries, listed in Table 3-1, account for approximately 91 percent of the total
3-5
-------
national compliance cost estimate ($7.24 million). Given the uncertainty about which firms
would be impacted and because the BRS data is reported using the SIC system and the bridges
between the SIC and NAICS code classifications were not one-to-one for all industries, EPA
determined the most appropriate way to analyze the industry data was using the SIC system.
Table 3-2 lists the NAICS codes associated with the 15 SIC codes analyzed that would
potentially be impacted by the rule.
3.3 Economic Impact Methodology and Results
The Agency employed an engineering or financial analysis to estimate impacts, which
takes the form of the ratio of compliance costs to the value of sales (cost-to-sales ratio or CSR).
The analysis assesses the burden of the rule by assuming the affected firms fully absorb the
control costs, rather than passing them on to consumers in the form of higher prices. One
drawback for this approach is that it does not consider interaction between producers and
consumers in a market context (i.e., the interaction between change in price and change in
quantity demanded and supplied). Therefore, it likely overstates the impacts on facilities and
firms affected by the rule and understates the impacts on consumers. EPA calculated a CSR for
each of the 15 industries as follows:
CSR = Total Annual Compliance Costs/Values of Shipments or Receipts (3.1)
To compute these ratios, EPA attempted to collect basic economic information for all 15
industries identified in Section 3.2 using the U.S. Census Bureau's "Comparative Statistics 1987
SIC Basis" (U.S. Census Bureau, 2001) (see Table 3-1). However, 1997 data were available for
only 8 of the 15 industries (53 percent). The Agency obtained 1992 revenue statistics for four of
the remaining seven industries missing data (U.S. Census Bureau, 1995a-d). For the screening
analysis, 1992 data were adjusted to 1997 dollars using a GDP deflator. As shown in Table 3-3,
shipments for the 12 industries ranged from $4 to $182 billion.
The CSR analysis results do not show significant impacts for any industry. All of the
ratios are less than 0.02 percent. A review of profitability measures (Dun & Bradstreet, 1997)
shows that these values are significantly below return-on-sales (ROS) data for even the lower
quartiles of industries with data available. The lowest lower quartile ROS measure was 0.4
percent (petroleum bulk stations and terminals).
The CSR should be interpreted with care. Again, we emphasize that this approach does
not account for the fact that the regulation may cause the economic conditions to change. The
CSR approach assumes that firms continue to produce the same quantity of output using the
same inputs, production process, and remediation method. In addition, the firms are assumed to
absorb all costs. This approach essentially holds fixed all interaction between facility production
and market forces. In reality, some percentage of the control costs may be passed along to other
3-6
-------
parties through various economic exchanges. Therefore, it is likely that the CSR overstates the
impacts on industries and understates the impacts on consumers.
3.4 Small Business Impacts
Small business impacts were particularly difficult to assess. As discussed in the
Preamble, this rule sets minimum standards to be met when parties engage in future site
remediation activities, but it does not itself require any party to undertake such activities. States
may choose to direct a party to undertake site remediation, or parties may undertake remediation
activities voluntarily. EPA anticipates that parties that undertake site remediation generally will
do so voluntarily and that the impact of this rule on those parties will not be significant. Further,
because States and other parties will decide whether to undertake site remediation activities, it is
extremely difficult, if not impossible, to predict how many or what types of small entities will
undertake such activities. The rule is structured to avoid impacts on small businesses. The rule
specifically excludes from its scope remediations conducted at gasoline stations, farm sites and
residential sites (on the ground that these remediations would not exceed the threshold for major
sources). Moreover, the rule would apply only to remediation sites
3-7
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Table 3-1. Economic Data for 15 Industries with Highest Total Annual Control Costs (TACC)
oo
SIC Code
2491
2816
2819
2869
3334
3351
3354
3728
3795
3861
4953
5171
9224
9999
Description
Wood Preserving
Inorganic Pigments
Industrial Inorganic Chemicals, NEC
Industrial Organic Chemicals, NEC
Primary Aluminum
Copper Rolling and Drawing
Aluminum Extruded Products
Aircraft Parts and Equipment, NEC
Tanks and Tank Components
Photographic Equipment and Supplies
Refuse Systems
Petroleum Bulk Stations and Terminals
Fire Protection
Unclassifiable Establishments
Unknown
Establishments
451
74
667
740
21
129
160
1,138
37
739
NR
9,104
NR
NA
NA
Value of Shipments
($103)
$4,461,521
$3,734,497
D
D
$6,224,610
$7,679,080
$6,177,701
$20,073,061
D
$21,305,761
NR
$181,554,365
NR
NA
NA
Paid Employees
11,668
8,608
D
D
15,763
21,150
30,357
127,729
D
63,642
NR
116,215
NR
NA
NA
Annual Payroll ($103)
$298,123
$395,570
D
D
$707,402
$786,621
$944,829
$5,747,346
D
$2,928,089
NR
$3,524,999
NR
NA
NA
D = Withheld to avoid disclosure.
NA = Not available.
NR = Not reported.
Source: U.S. Bureau of the Census. "Comparative Statistics 1987 SIC Basis." . As obtained on December 20, 2001.
-------
Table 3-2. SIC and NAICS Codes for 15 Industries with Highest Total Annual Control Costs
SIC Code Description NAICS
2491 Wood preserving 321114
2816 Inorganic pigments 325131
325182
2819 Industrial inorganic chemicals, n.e.c. 211112
325131
325188
325998
331311
2869 Industrial organic chemicals, n.e.c. 325110
325188
325193
325120
325199
3334 Primary aluminum 331312
3351 Copper rolling and drawing 331421
3354 Aluminum extruded products 331316
3728 Aircraft parts and equipment, n.e.c. 336413
3795 Tanks and tank components 336992
NAICS Description
Wood preservation
Inorganic Dye and Pigment Manufacturing (pt)
Carbon Black Manufacturing (pt)
Natural gas liquid extraction
Inorganic dye and pigment mfg
All other basic inorganic chemical mfg
All other miscellaneous chemical product and preparation mfg
Alumina refining
Petrochemical Manufacturing (pt)
All other basic inorganic chemical mfg (pt)
Ethyl alcohol mfg
Industrial gas mfg (pt)
All other basic organic chemical mfg (pt)
Primary aluminum production
Copper rolling, drawing, and extruding
Aluminum extruded product mfg
Other aircraft part and auxiliary equipment mfg
Military armored vehicle, tank, and tank component mfg (pt)
(continued)
-------
Table 3-2. SIC and nNAICS Codes for 15 Industries with Highest Total Annual Control Costs (continued)
SIC Code
Description
NAICS
NAICS Description
3861 Photographic equipment and supplies
325992 Photographic film, paper, plate, and chemical mfg
333315 Photographic and photocopying equipment mfg (pt)
4953 Refuse Systems
562211 Hazardous waste treatment and disposal
562212 Solid waste landfill
562213 Solid waste combustors and incinerators
562219 Other nonhazardous waste treatment and disposal
562920 Materials recovery facility
5171 Petroleum bulk stations and terminals
422710 Petroleum bulk stations and terminals
454311 Heating oil dealers (selling for consumption—retail)
454312 Liquefied petroleum dealers (selling for consumption—retail)
9224 Fire Protection
92216 Fire Protection
9999 Unclassifiable Establishments
NA
Unknown
NA
-------
Table 3-3. Economic Impact Screening Analysis
SIC Code Description
2491
2816
2819
2869
3334
3351
3354
3728
3795
3861
4953
5171
9224
9999
NA =
NR =
Source: U
Wood Preserving
Inorganic Pigments
Industrial Inorganic Chemicals, NEC
Industrial Organic Chemicals, NEC
Primary Aluminum
Copper Rolling and Drawing
Aluminum Extruded Products
Aircraft Parts and Equipment, NEC
Tanks and Tank Components
Photographic Equipment and Supplies
Refuse Systems
Petroleum Bulk Stations and Terminals
Fire Protection
Unclassifiable Establishments
Unknown
Not available.
Not reported.
.S. Bureau of the Census. "Comparative Statistics
Value of Shipments Total
($103)
$4,461,521
$3,724,497
$20,169,205
$60,226,652
$6,224,610
$7,679,080
$6,177,701
$20,073,061
$22,586,854
$21,305,761
$15,654,017
$181,554,365
NR
NA
NA
Annual Compliance
Costs ($103)
$418
$258
$1,158
$737
$367
$1,306
$551
$259
$80
$175
$104
$60
$115
$891
$111
1987 SIC Basis." . As obtained on December 20, 2001.
Dun and Bradstreet. 1997. Industry Norms & Key Business Ratios: Desk-Top Edition 1996-97. Murray Hill, NJ: Dun & Bradstreet.
U.S. Bureau of the Census. March 10, 1995a. 7992 Census of Manufactures—Industry Series: Industrial Inorganic Chemicals (Industries 2812, 2813, 2816,
and 2819). MC92-I-28A. Washington, DC: U.S. Government Printing Office.
U.S. Bureau of the Census. March 2, 1995b. 7992 Census of Manufactures—Industry Series: Industrial Organic Chemicals (Industries 2861, 2865, and
2869). MC92-I-28F. Washington, DC: U.S. Government Printing Office.
U.S. Bureau of the Census. February 24, 1995c. 7992 Census of Manufactures—Industry Series: Shp and Boat Building, Railroad and Miscellaneous
Transportation Equipment (Industries 3731, 3732, 3743, 3751, 3792, 3795, and 3799). MC92-I-37C. Washington, DC: U.S. Government Printing Office.
U.S. Bureau of the Census. April 19, 1995d. 7992 Census of Transportation, Communications, and Utilities—Subject Series: Establishment and Firm Size
(Including Legal Form of Organization). UC92-S-1. Washington, DC: U.S. Government Printing Office.
-------
located at a facility that is a major source under the Clean Air Act and engages in a "MACT
activity" (defined as a non-remediation activity covered in the MACT list of major source
categories pursuant to CAA section 112 (c)). Such sources tend to be large businesses. The rule
also contains emission thresholds that are not likely to apply to small businesses. For example,
the rule exempts sources where the total annual quantity of HAP contained in all extracted
remediation material at the facility is less than 1 Mg per year. For these reasons, EPA certifies
that the rule, if promulgated, will not impose a significant economic impact on a substantial
number of small entities.
3.5 Conclusions and Qualifications
3.5.1 Conclusions
The economic impact analyses focused on a set of industries that were known to be large
quantity generators of hazardous waste who were generating hazardous and non-hazardous waste
as part of a site remediation in 1997 as reported in the BRS database. The Agency believes that
the data provide an overview of the potential impacts of the rule. However the Agency
recognizes that the set of industries identified in the data will probably not be the exact industries
that will be directly affected by the rule in the year the rule is implemented. As stated in Section
3.4, the Agency anticipates that parties that undertake site remediation generally will do so
voluntarily and that the impact of this rule on those parties will not be significant.
3.5.2 Qualifications
In addition to qualifications mentioned elsewhere in the report, the results and
assessments of the screening analysis should be viewed in light of the following limitations and
uncertainties:
• EPA used the 1997 BRS database to identify future remediation sites. The actual
firms and industries affected by the rule may differ from this population.
• The 1997 categories of waste treatment options in the BRS may change and/or the
distribution of wastes within each category may change for future remediation sites.
• The engineering cost estimates represent an upper-bound estimate for the firm's
costs. There may be lower cost alternatives that achieve the same emission
reductions.
• Superfund NPL sites and permitted or federal order RCRA corrective action cleanups
are exempted from the rule.
3-12
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REFERENCES
Dun and Bradstreet. 1997. Industry Norms & Key Business Ratios: Desk-Top Edition 1996-97.
Murray Hill, NJ: Dun & Bradstreet.
Nizich, Greg, EPA/WCPG. December 19, 2001. Personal communication with Carol
Mansfield, RTI. Updated preamble and rule for site remediation.
U.S. Bureau of the Census. March 10, 1995a. 7992 Census of Manufactures—Industry Series:
Industrial Inorganic Chemicals (Industries 2812, 2813, 2816, and 2819). MC92-I-28A.
Washington, DC: U.S. Government Printing Office.
U.S. Bureau of the Census. March 2, 1995b. 7992 Census of Manufactures—Industry Series:
Industrial Organic Chemicals (Industries 2861, 2865, and 2869). MC92-I-28F.
Washington, DC: U.S. Government Printing Office.
U.S. Bureau of the Census. February 24, 1995c. 7992 Census of Manufactures—Industry
Series: Ship and Boat Building, Railroad and Miscellaneous Transportation Equipment
(Industries 3731, 3732, 3743, 3751, 3792, 3795, and 3799). MC92-I-37C. Washington,
DC: U.S. Government Printing Office.
U.S. Bureau of the Census. April 19, 1995d. 7992 Census of Transportation, Communications,
and Utilities—Subject Series: Establishment and Firm Size (Including Legal Form of
Organization). UC92-S-1. Washington, DC: U.S. Government Printing Office.
U.S. Bureau of the Census. 2000. E9700A1: Economy-Wide Key Statistics (1997 NAICS
Basis): 1997 [Computer File], .
U.S. Bureau of the Census. "Comparative Statistics 1987 SIC Basis."
. As obtained on December 20, 2001.
R-l
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U.S. Environmental Protection Agency (EPA), . 1999a.
U.S. Environmental Protection Agency (EPA). 1999b. OAQPS Economic Analysis Resource
Document. Durham, NC: Innovative Strategies and Economics Group.
Zerbonia, Robert, RTI. September 26, 2001. Personal communication with Greg Nizich,
EPA/WCPG. Summary of nationwide emission and control cost estimates for the site
remediation MACT project.
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TECHNICAL REPORT DATA
(Please read Instructions on reverse before completing)
i. REPORT NO.
EPA-452/R-03-016
3. RECIPIENT'S ACCESSION NO.
4. TITLE AND SUBTITLE
5. REPORT DATE
August 2003
National Emission Standards for Hazardous Air Pollutants: Site
Remediation
6. PERFORMING ORGANIZATION CODE
7. AUTHOR(S)
8. PERFORMING ORGANIZATION REPORT NO.
RTI Project Number 7647-004-392
9. PERFORMING ORGANIZATION NAME AND ADDRESS
10. PROGRAM ELEMENT NO.
RTI International
Center for Regulatory Economics and Policy Research, Hobbs Bldg.
Research Triangle Park, NC 27709
11. CONTRACT/GRANT NO.
68-D-99-024
12. SPONSORING AGENCY NAME AND ADDRESS
13. TYPE OF REPORT AND PERIOD COVERED
Final
Office of Air Quality Planning and Standards
Office of Air and Radiation
U.S. Environmental Protection Agency
Research Triangle Park, NC 27711
14. SPONSORING AGENCY CODE
EPA/200/04
15. SUPPLEMENTARY NOTES
16. ABSTRACT
The final rule would implement Section 112(d) of the CAA by requiring those affected site remediation
activities to meet emission limitation, operating limit, and work practice standards reflecting the application
of the maximum achievable control technology (MACT). The economic impact analyses focused on a set of
industries that were known to be large quantity generators of hazardous waste who were generating
hazardous and non-hazardous waste as part of a site remediation in 1997 as reported in the BRS database.
The Agency believes that the data provide an overview of the potential impacts of the rule. The Agency
employed an engineering or financial analysis that takes the form of estimating impacts through the ratio of
compliance costs to the value of sales (cost-to-sales ratio or CSR) using total industry revenues, control
costs, and accounting measures of profit.
17.
KEY WORDS AND DOCUMENT ANALYSIS
DESCRIPTORS
b. IDENTIFIERS/OPEN ENDED TERMS
c. COSATI Field/Group
economic impacts
small business impacts
social costs
Air Pollution Control
Economic Impact Analysis
Regulatory Flexibility Analysis
18. DISTRIBUTION STATEMENT
Release Unlimited
19. SECURITY CLASS (Report)
Unclassified
21. NO. OF PAGES
36
20. SECURITY CLASS (Page)
Unclassified
22. PRICE
EPA Form 2220-1 (Rev. 4-77) PREVIOUS EDITION IS OBSOLETE
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