RESEARCH   TRIANGLE   INSTITUTE
Contract No. CPA 70-60
RTI Project No. OU-534
December 1970
                       FINAL REPORT
                        FR-OU-534
                         Volume I


     COMPREHENSIVE STUDY OF'SPECIFIED AIR

POLLUTION SOURCES TO ASSESS THE  ECONOMIC

       EFFECTS OF AIR QUALITY STANDARDS
                            by

           D. A. LeSourd, M. E. Fogel, A. R. Schleicher, T. E. Bingham,

                  R. W. Gerstle, E. L. Hill, F. A. Ayer
                        Prepared for:
               Division of Economic Effects Research
                  Air Pollution Control Office
                 Environmental Protection Agency
RESEARCH TRIANGLE  PARK, NORTH CAROLINA  27709

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                        ENVIRONMENTAL PROTECTION AGENCY
February 8, 1971
                            AIR POLLUTION CONTROL OFFICE
                                  1033 Wade Avenue
                            Raleigh,  North Carolina  27605
_ ..    Economics of  Clean Air:  Annual Report to Congress, Backup Document
Sutytct:  ky tjie Researcj1 Triangle Institute

   To:  Addressees

       1.  The technical report from the Research Triangle Institute which

       serves as the backup  document for chapters 3 and 4 of the third 305(a)

       report to Congress, "The EiAuminixs of Clean Air" is enclosed.
       Melvin L.  Myers
       Engineer-Economist
       Division of Economic Effects Research

       Enclosure
       Addressees:
       Dr. John Middleton
       Mr. Laszlo Bockh
       Mr. Lou Schoen
       Dr. B. J. Steigerwald
       Dr. Delbert Earth
       Mr. Robert Neligan
       Dr. John Ludwig
       Mr. Raymond Smith
       Mr. William Megonnel
       Mr. Doyle Borchers
       Mr. Robert Perman
       Mr. Leighton Price
       Dr. Harry Kramer
       fcrT"Fred Renner
       Dr. Charles Walters
       Mr. Jerry Romanovsky
       Mr. George Morgan
                                          Dr. Paul Kenline
                                          Dr. Vaun Newill
                                          Dr. Aubrey Altshuller
                                          Mr. Robert McCormick
                                          Mr. John Brogan
                                          Mr. Sheldon Meyers
                                          Mr. Donald Walters
                                          Mr. Don Goodwin
                                          Mr. Kenneth Mills
                                          Mr. Edward Tuerk
                                          Mr. Paul Gerhardt
                                          Mr. Ron  Campbell
                                          Mr. Henry Kahn

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              RESEARCH TRIANGLE INSTITUTE
       OPERATIONS  RESEARCH AND ECONOMICS DIVISION
         RESEARCH  TRIANGLE PARK, NORTH CAROLINA
                      FINAL REPORT
                        FR-OU-534
                        Voltune I
 Comprehensive Study of Specified Air Pollution Sources
to Assess the Economic Effects of Air Quality Standards
                           by

     D. A. LeSourd, M. E. Fogel, A. R. Schleieher,
  T. E. Bingham, R. W. Gerstle, E. L. Hill, F. A. Ayer
                      Prepared for:

           Division of Economic Effects Research
               Air Pollution Control Office
              Environmental Protection Agency

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                            ACKNOWLEDGEMENTS

     The authors wish to acknowledge the many people who contributed to
the research reported in this document.  RTI staff members who contributed
significantly to the research are:  C. Benrud, C. N. Click, A. 0. Cole,
R. L. Collins, B. L. Jones, H. S. Anderson, R. E. Folsom, D. Godfrey,
R. 0. Lyday, R. E. Paddock, and C. T. Sawyer.  The authors appreciate the
efforts of personnel of PEDCo-Environmental Specialists, Inc. in assist-
ing in the engineering and cost analysis for the following sources:  solid
waste disposal, elemental phosphorus, petroleum refining, petroleum
products and storage, rubber, and varnish.  Also, the authors appreciate
the efforts of W. E. Gilbert, APCO, in assisting in the cost analysis of
gray iron foundries and A. C. Basala, APCO, for assisting in the cost
analysis of iron and steel and kraft (sulfate) pulp.
     The authors also wish to acknowledge the continuing technical
guidance provided by APCO personnel P. A. Kenline, J. R. O'Connor,
M. L. Myers, F. A. Collins, J. Dement, E. 0. Stork, N. Plaks, P. A. Boys
and A. K. Miedetna.
     Finally, special appreciation is extended to the secretaries who
typed and retyped the many drafts of this report:  J. Stockton, project
secretary; S. Evans, F. Heald, S. Powell, and T. Stone.
                                   ii

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                                ABSTRACT
     Estimates are made of the costs of controlling and reducing the
emissions of selected pollutants from mobile sources within the Nation
and pollutants from 23 stationary sources within 298 metropolitan areas.
Under the assumed implementation plan, these estimated costs are those
that will be incurred during the period of Fiscal Year 1971 through
Fiscal Year 1976.  In addition, an extended analysis is made to determine
the economic impact of control costs on each industrial source or group
of industrial sources studied.  Also, the aggregate effects of the impact
of individual industries upon buyer industries and consumer prices are
determined.

     The pollutants from mobile sources selected for analysis are hydro-
carbons, carbon monoxide, nitrogen oxides and particulates.  The six
pollutants for which control cost estimates are made for stationary
sources are particulates, sulfur oxides, carbon monoxide, hydrocarbons,
fluorides, and lead.  Emission standards applied are considered stringent
in comparison with many currently in use throughout the Nation.  Mobile
sources include automobiles and light and heavy-duty trucks.  Stationary
sources studied include solid waste disposal, commercial and institutional
heating plants, industrial boilers, residential heating plants, steam-
electric power plants, asphalt batching, brick and tile, coal cleaning,
cement, elemental phosphorus, grain handling and milling (animal feed),
gray iron, iron and steel, kraft (sulfate) pulp, lime, petroleum products
and storage, petroleum refineries, phosphate fertilizer, primary non-
ferrous metallurgy  (aluminum, copper, lead and zinc), rubber (tires),
secondary nonferrous metallurgy, sulfuric acid, and varnish.  Data
essential for defining metropolitan areas, emission control standards,
and relevant process and air pollution control engineering characteristics
required to support the cost analyses for each source and the cost impact
on each industrial process are presented and analyzed in separate appendixes
to this report.

     Residential heating was examined but control cost estimates were not
made.  Also, the economic impact of emission controls on the sulfuric acid
industry was not made.

     Air pollution control costs for mobile sources are presented on a
national basis and in terms of unit investment and annual operating and
maintenance costs as well as total annual operating and maintenance costs.
The analyses cover the estimated emissions and control costs for new cars
for Model Year (Fiscal Year) 1967 through Model Year (Fiscal Year) 1976.
Control costs for each stationary source, except for residential heating,
are shown for 298 metropolitan areas by investment and annual expenditures
by Fiscal Year 1976.  The emissions and cost estimates developed reflect
the control costs of each stationary source in operation as of Calendar
Year 1967 and those sources assumed to be constructed during Calendar Year
1968 through Fiscal Year 1976.  The impact of control on selected industries
and the Nation are also determined.  Finally, an extensive bibliography is
included.

     Published separately but developed as a part of this research study
are computer programs that will facilitate future cost projections (Volume
II), and a survey plan for obtaining plant and plant process information
where such information is presently lacking (Volume III).
                                   iii

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                          TABLE OF CONTENTS
ABSTRACT	    iii
LIST OF TABLES	    vi
LIST OF FIGURES	    xi
Chapter 1:  Introduction  	    1-1
     I.   PURPOSE OF RESEARCH	    1-1
    II.   SCOPE OF RESEARCH	    1-2
   III.   PRINCIPAL STUDY LIMITATIONS   	    1-4
    IV.   PLAN OF REPORT	    1~6
Chapter 2:  Study Methodology   	    2-1
     I.   INTRODUCTION	    2-1
    II.   MOBILE  SOURCES METHODOLOGY  	  	    2-1
          A.   Overview	    2-1
          B.    Selection  of Vehicle Types and Pollutants  	    2-1
          C.    Engineering and  Cost Analysis	    2-2
   III.   STATIONARY SOURCES METHODOLOGY  	    2-3
          A.   Overview	.	    2-3
          B.    Selection  of Sources and Pollutants  	    2-4
          C.    Engineering Cost and Analysis	    2-5
          D.    Economic Analysis  	    2-16
Chapter 3:  Summary of  Mobile Sources   	    3-1
     I.   INTRODUCTION	    3-1
    II.   EMISSION STANDARDS	    3-1
   III.   EMISSION CONTROL COSTS  	    3-1
    IV.   EMISSION REDUCTIONS   	    3-2
Chapter 4:  Summary of  Stationary  Sources   	   4-1
     I.   INTRODUCTION	   4-1
    II.   EMISSION LEVELS	   4-1
          A.    Solid Waste Disposal   	   4-1
          B.    Stationary Fuel  Combustion	   4-3
          C.    Industrial Processes   	   4-3
   III.   COSTS	   4-5
                                     iv

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                    TABLE OF CONTENTS (Continued)
Chapter 5:  Economic Impact of the Cost of Controlling
                 Emissions from Stationary Sources  	  5-1

     I.   INTRODUCTION	5-1
    II.   GENERAL PARAMETERS AFFECTING ECONOMIC IMPACT 	  5-1

          A.   Type of Source and Quantity of Emissions	5-1
          B.   Structure of Industry and Market	5-3

   III.   SPECIFIC IMPACT ON FIRMS IN EIGHTEEN INDUSTRIAL
               PROCESS SOURCES	5-4

          A.   Asphalt Batching  	  5-4
          B.   Brick and Tile	5-5
          C.   Coal Cleaning	5-5
          D.   Cement	5-5
          E.   Elemental Phosphorus and Phosphate Fertilizer 	  5-6
          F.   Grain Milling and Handling	5-7
          G.   Gray Iron Foundries	5-8
          H.   Iron and Steel	5-8
          I.   Kraft (Sulfate) Pulp	5-9
          J.   Lime	5-9
          K.   Petroleum Refining and Storage	5-10
          L.   Primary and Secondary Nonferrous Metallurgy	  5-10
          M.   Rubber	5-13
          N.   Sulfuric Acid	5-13
          0.   Varnish	5-13
    IV.   CONTROL OF FOSSIL FUEL COMBUSTION	5-13

     V.   AGGREGATE IMPACT ON THE ECONOMY	5-14

    VI.   CONCLUSIONS	5-15
          A.   General Economic Impact of Air Pollution Control  . .  .  5-15
          B.   Solid Waste Disposal  	  5-16
          C.   Stationary Fuel Combustion	5-17
          D.   Industrial Processes  	  5-18

 Appendix I:   Selection of 298 Metropolitan Areas  	  1-1

 Appendix II:  Assumed Emission Standards  ..... 	  II-l
 Appendix III: Mobile Sources	III-l

 Appendix IV:  Stationary Sources	IV-1

 Appendix V:   Alternatives to the Control of Sulfur Oxides From
                    Stationary Combustion Processes  	  V-l
 Appendix VI:  Impact of the Cost of Emission Controls on the Price
                    Level of the U. S.  Economy ............  VI-1
 Appendix VII: Bibliography	VII-1

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                               LIST OF TABLES
 Table

  2-1        Major Sources  of Data for Stationary Combustion
                 Cost Estimating Analyses	2-9

  2-2        Principal Sources of Data on Industrial Process
                 Source Location, Number, and Capacities  	   2-10

  2-3        Principal Sources of Data on Industrial Process
                 Source Production  	   2-11

  2-4        Principal Sources of Data on Industrial Process
                 Source Value of Shipments  	   2-11

  2-5        1967 Statistics for Industrial Process Sources
                 (National and in 298 Metropolitan Areas)	2-12

  2-6        Average Annual Growth Rate for Production and  Capacity  .  .   2-15

  3-1        Summary of Mobile Sources Emission Control Costs  	   3-3

  3-2        Summary of Mobile Sources National Annual
                 Emission Reduction 	   3-4

  4-1        Solid Waste Disposal and Stationary Fuel Combustion
                 Estimates of Potential and Reduced Emission
                 Levels and Associated Costs  	   4-2

  4-2        Industrial Process Sources—Estimates of Potential
                 and Reduced Emission Levels and Associated Costs  .  .  .   4-4

  4-3        Stationary Sources—Estimation of Potential and
                 Reduced Emission Levels and Associated Costs  	   4-6

  4-4        Expected Annual Control Costs Relative to Capacity,
                 Production, and Shipments of Industrial
                 Process Sources  	   4-8

  5-1        Estimated Emissions from all Stationary Sources, FY  1976  .   5-16

  1-1       List of 298 Metropolitan Areas	1-2

 II-l        Allowable Rate of Particulate Emission Based on Process
                 Weight Rate	II-3

III-l        Mobile Source Growth and Potential Emissions,  FY 1967-1976
                 [1967 Baseline]	III-5

III-2        Effects of Controls on Mobile Source Emissions,
                 FY 1967-1976 [1967 Baseline]	III-7
                                       vi

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                       LIST OF TABLES (Continued)


Table                                                                 Page

III-3     Current and Anticipated Standards for Mobile Sources,
               1967 - 1976	III-8

III-4     Unit Control Methods and Costs, 1967 - 1976 Model
               Years:  Cars and Light-Duty Trucks	111-16

III-5     Unit Control Methods and Costs, 1967 - 1976 Model
               Years:  Heavy-Duty Gasoline Trucks	111-17

III-6     Costs of Controls and Effectiveness in Reducing
               Emissions, FY 1967 - 1976:  All Autos and
               Gasoline Trucks	111-21

 IV-1     Cost of Upgrading Municipal Incinerators 	 IV-3

 IV-2     Municipal Incinerator Control Costs	IV-6

 IV-3     Emission Rates for Various Solid Waste Disposal
               Practices	IV-9

 IV-4     Uncontrolled Emission Rates for Commercial-Institutional
               Space Heating	.	IV-11

 IV-5     Emission Factors for Industrial Boilers	IV-12

 IV-6     Emission Rates for Residential Heating Plants	IV-14

 IV-7     Control Alternatives Selected for the Steam-Electric
               Industry	IV-16

 IV-8     Incremental Removal Efficiencies Required	IV-20

 IV-9     Asphalt Batching Emission Control Costs	IV-21

 IV-10    Uncontrolled Particulate Emission Rates from Coal
               Cleaning Processes	IV-32

 IV-11    Unit Gas Volumes and Control Equipment	IV-33

 IV-12    Coal Cleaning Control Costs	IV-34

 IV-13    Present Control Status for the Cement Industry 	 IV-42

 IV-14    Ultimate Particulate Removal Efficiencies Required .... IV-42

 IV-15    Estimated Costs of Upgrading Existing Control
               Equipment	IV-43
                                  vii

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                      LIST OF TABLES (Continued)


Table

IV-16    Elemental Phosphorus Capacity, Furnace Rating and
              Gas Flow Rate Through Scrubbers	IV-56

IV-17    Control Systems Required	IV-58

IV-18    Fertilizer Production Control Costs  	  IV-59

IV-19    1967 Statistical Data on the Elemental Phosphorus
              Industry	IV-61

IV-20    1967 Statistical Data on the Phosphate Fertilizer
              Industry	IV-62

IV-21    Employment Size Index Vs Capacity	IV-68

IV-22    Elevator Emission Factors 	  IV-69

IV-23    Grain Elevator Control Costs	IV-70

IV-24    Animal Feed Mill Control Costs	IV-70

IV-25    Cupola Emission Control Costs	IV-76

IV-26    Uncontrolled Particulate Emission Rates 	  IV-86

IV-27    Particulate Control Levels (1967) 	  IV-86

IV-28    Required Removal Efficiencies for Emission Sources	IV-87

IV-29    Fluorides in Iron and Steel Making	IV-88

IV-30    Selected Control Systems	IV-89

IV-31    Cost Estimating Parameters	IV-90

IV-32    Uncontrolled Particulate Emission Rates 	  IV-98

IV-33    Estimated Particulate Control Levels and Emission Rates
              After Control	IV-98

IV-34    Required Removal Efficiencies for Kraft Processes 	  IV-100

IV-35    Gas Volume Vs. Production for Kraft Processes 	  IV-101

IV-36    Control Systems Selected	IV-101

IV-37    Kraft Recovery Furnace Emission Control Costs 	  IV-102

IV-38    Rotary Lime Recovery Kiln Emission Control Costs	IV-103
                                viii

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                      LIST OF TABLES (Continued)
                                                                      Page
                                                                       . ,P. -

IV-39    Kraft Smelt-Dissolving Tank Emission Control Costs .....  IV- 103

IV-40    Kraft Bark Boiler Emission Control Costs ..........  IV-111

IV-41    1967 Statistics on the Kraft (Sulfate) Pulp Industry. . .  .  IV-112

IV-42    Ultimate Control Efficiency Required ............  IV-119

IV-43    Lime Kiln Gas Volumes ...................  IV-119

IV-44    Rotary Lime Kiln Emission Control Costs  .... ......  IV-125

IV-45    Vertical Lime Kiln Emission Control Costs .........  IV-126

IV-46    Petroleum Storage Emission Factors .............  IV- 140

IV-47    1967 Statistics on the Petroleum Refining Industry .....  IV-151

IV-48    1967 Statistics on the Petroleum Products and Storage
              Industry  .......................  IV-152

IV-49    Cell Control Equipment ...................  IV-157

IV-50    Costs of Cell Control Systems - Prebaked and Horizontal
              Spike Soderberg  ...................  IV-160

IV-51    Costs of Cell Room Control Equipment - Prebaked and
              Horizontal Spike Soderberg ..............  IV-160

IV-52    Costs of Combined Cell Plus Cell Room Control Systems -
              Vertical Spike Soderberg ...............  IV-161

IV-53    Uncontrolled Emission Rates for Aluminum Reduction Cells.  .  IV-161

IV-54    Metallurgical Processes for Copper, Lead, and Zinc .....  IV-162

IV-55    Primary Smelting - Model Plants ..............  IV-163

IV-56    Sulfur Oxide Emission Rates ................  IV-170

IV-57    Uncontrolled Emission Rates from Secondary Nonferrous
              Metals Industry  ...................  IV-171

IV-58    Emission Control Costs for Secondary Nonferrous
              Metallurgy ......................  IV-172

IV-59    1967 Statistics for Primary Nonferrous Metallurgical
              Sources ........................  IV-174
                                   ix

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                      LIST OF TABLES (Continued)
Table                                                                 Page




IV-60    1967 Statistics for Secondary Nonferrous Metallurgical

IV-61
IV-62

IV-63
IV-64
VI- 1
VI-2

VI- 3

VI-4
VI-5

VI-6
VI-7
VI-8
VI-9
VI- 10
Sources 	
Status of Emission Controls for Rubber Plants 	
Sulfuric Acid Emission Control Costs: Double
Absorption 	
Sulfuric Acid Emission Control Costs: Mist Eliminator. . .
Capacity Vs. Annualized Cost Factors 	

Comparison of APCO and Input-Output Industry

Selected Components of the Input-Output Table of the U. S.


Estimated Impact of the Costs of Emission Control on the




Truck and Bus Chassis Factory Sales 	

IV-174
IV- 188

IV-194
IV- 19 5
IV- 19 7
VI- 12

VI-13

VI-14
VI-29

VI-40
VI-40
VI-41
VI-41
VI-42
VI-42
                                   X

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                              LIST OF FIGURES


 Figure

  2-1        Control Costs "Versus Gray Iron Cupola Capacity 	   2-7

 II-l        New York State Particulate Emission Regulation for Refuse
                 Burning Equipment   	II-4

 II-2        Maryland Particulate Emission Standards for Fuel Burning
                 Installations 	  II-5

III-l        Approximate Distribution of Emissions by Source for a
                 Vehicle not Equipped With any Emission Control System . III-3

 IV-1        Municipal Incinerator Particulate Control Costs	IV-7

 IV-2        Brick and Tile Installed and Purchase Costs of Control
                 Systems [Ref. 28]	IV-27

 IV-3        Brick and Tile Annualized Cost of Control Systems [Ref. 28].  IV-28

 IV-4        Equipment Cost for Venturi Scrubbers	IV-35

 IV-5        Equipment Cost for Venturi Scrubbers	IV-36

 IV-6        Annual Direct Operating Cost for Venturi Scrubbers 	  IV-37

 IV-7        Investment and Annualized Costs for Phosphorus Furnaces  .  .  IV-57

 IV-8        Equipment Cost for Venturi Scrubbers 	  IV-104

 IV-9        Equipment Cost for Venturi Scrubbers 	  IV-105

 IV-10      Annual Direct Operating Cost for Venturi Scrubbers 	  IV-106

 IV-11      Annual Direct Operating Cost for Recovery Boiler Venturi
                 Scrubbers 	  IV-107

 IV-12      Annual Direct Operating Cost for Lime Kiln Venturi
                 Scrubbers 	  IV-108

 IV-13      Equipment Cost for Multi-tube Collectors 	  IV-109

 IV-14      Annual Operating Cost for Multi-tube Collectors  	  IV-110

 IV-15      Equipment Cost for Venturi Scrubber  	  IV-120

 IV-16      Equipment Cost for Venturi Scrubber  	  IV-121
                                        xi

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Figure
IV- 17
IV- 18
IV- 19
IV-20

IV- 21
IV- 2 2

IV- 2 3
IV- 2 4

IV- 25
IV-26

IV-27
IV- 2 8

IV-29

IV- 30

VI-1
VI- 2
VI- 3
VI-4
VI-5
VI-6
VI- 7
VI-8

Annual Direct Operating Cost for Venturi Scrubbers . . .

Annual Direct Operating Cost for Cyclonic Scrubbers . .
Installed Cost of Floating Roofs on Petroleum Storage
Tanks 	

Annual and Installed Costs for Electrostatic


Cost for Converting Fixed-Roof Gasoline Storage Tanks to
Floating Roof Tanks 	
Capital Costs for the Contact Sulfuric Acid Process . .
Annual Operating Costs for Contact Sulfuric Acid

Equipment Costs for Lime Wet-Scrubbing Process 	
Operating Costs for the Lime-Burning Section of the Lime

Operating Costs - Scrubbing and Waste-Treating Section of
Lime Wet-Scrubbing Process at 100% of Capacity . .
Installed Cost for Direct-fired Afterburner for Varnish
Plant 	




Implicit Price Deflators (1958=100) 	
Average Wage Rate for Selected Building Trades 	
Motor Vehicle Factory Sales-Units 	

Page
IV-122
IV-123
IV- 124

IV- 141
IV-143

IV- 14 6
IV-147

IV-149
IV-165

IV- 16 6
IV- 16 7

IV- 16 8

IV- 169

IV- 19 8
VI-43
VI-44
VI- 45
VI- 46
VI- 4 7
VI-48
VI-49
VI-50
Xll

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Figure                                                                Page

VI-9       Motor Vehicle Registrations 	     VI-51

VI-10      Relationship of Motor Vehicle Production to GNP and
                Personal Income  	     VI-52

VI-11      Automobiles Per Household and Per Capita	     VI-53

VI-12      Consumer Price Index for New Automobiles  	     VI-54
                                     xiii

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                                Chapter 1

                              Introduction


                         I.  PURPOSE OF RESEARCH


     This report is submitted in fulfillment of the  requirements  of

the Air Pollution Control Office (APCO) Contract No.  CPA 70-60.   The

research results presented herein are in support of  the  air pollution

control cost estimates and resulting economic analyses given by the

Administrator of the Environmental Protection Agency in  the Third Report

to the Congress of the United States as provided for in  Section 305(a)

of Public Law 90-148, the Clean Air Act, as amended.

     The purpose of the research reported in this document was to make

estimates of the air pollution control costs and economic impact  that

will result from implementation of the Clean Air Act, as amended.   The

section of the act pertinent to this research reads:

               Sea.  SOS.  (a) In order to provide the basis for eval-
          uating programs  authorized by this Act and the development
          of new programs  and to furnish the Congress with the infor-
          mation necessary for authorization of appropriations by
          fiscal years beginning after June SO, 1969, the Secretary,
          in cooperation with State, interstate, and local air pollu-
          tion control agencies, shall make a detailed estimate of
          the cost of carrying out the provisions of this Act; a
          comprehensive study of the cost of program implementation
          by affected units of government; and a comprehensive study
          of the economic  impact of air quality standards on the
          Nation's industries, communities, and other contributing
          sources  of pollution, including an analysis of the national
          requirements for and the cost of controlling emissions  to
          attain such standards of air quality as may be established
          pursuant to this Act or applicable State law.   'The secre-
          tary shall submit such detailed estimates  and  the results
          of such  comprehensive study of cost for the five-year
          period beginning July I, 1969, and the results of such
          other studies, to the Congress not later than  January 10,
          1969, and  shall  submit a reevaluation of such  estimate
          and studies annually thereafter.
                                   1-1

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                         II.  SCOPE OF RESEARCH

      Air pollution  control costs are estimated for mobile sources  on
 a  national basis  and for three major categories of stationary sources
 (solid waste  disposal, stationary fuel combustion, and industrial
 processes) for  298  designated metropolitan areas  (Appendix I).  An
 extended analysis was also carried out to determine the economic impact
 of control costs  on each industrial source or group of industrial
 sources studied.  In addition, this analysis was  carried one step
 further in order  to determine the aggregate effects of the individual
 industry impacts  of control costs upon buyer industries and consumer
 prices.  Although published separately, computer programs that facilitate
 cost  projections, and a survey plan for obtaining plant and plant  process
 information were  developed as a part of this research study.
      Included under the mobile source category are gasoline powered
 automobiles,  and  light and heavy-duty trucks.  Stationary sources
 include solid waste disposal, stationary fuel combustion, and indus-
 trial processes.  The sources included under stationary fuel combustion
 are commercial  and  institutional heating plants,  industrial boilers,
 residential heating plants, and conventional steam-electric heating
 plants.  The  industrial process sources studied are:  asphalt batching,
 brick and tile, coal cleaning, cement, elemental phosphorus, grain
 handling and milling (animal feed), gray iron, iron and steel, kraft
 (sulfate) pulp, lime, petroleum products and storage, petroleum
 refineries, phosphate fertilizer, primary nonferrous metallurgy (aluminum,
 copper, lead, and zinc), rubber (tires), secondary nonferrous metallurgy,
sulfuric acid, and varnish.
     The four pollutants for which control costs estimates are made for
mobile sources are hydrocarbons, carbon monoxide, oxides of nitrogen, and
total particulates.   The six pollutants for which control cost estimates
are made, as appropriate, for each stationary source are particulates,
oxides of sulfur, carbon monoxide, hydrocarbons,  fluorides, and lead.
The emission standards applied far each pollutant are presented in
Appendix II.
                                   1-2

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     For the mobile source category, air pollution control  costs  are
estimated on a nationwide basis and reflect the additional  initial
purchase costs and annual operating and maintenance costs to purchasers
of new automobiles beginning in Model Year (Fiscal Year) 1967 through
Model Year (Fiscal Year) 1976.
     For stationary sources, air pollution control costs are estimated
for each stationary source except residential heating plants that
operated during 1967 in 298 designated metropolitan areas of the Nation.
These 298 metropolitan areas, which were selected and defined by APCO
for this research study, are presented in Appendix I of this report.
In 1967, these areas contained 85 percent of the Nation's population.
Additionally, air pollution control costs that would be incurred by
facilities built during the period 1968 through Fiscal Year 1976 were
estimated.  These estimates are limited to stationary sources and to
the 298 metropolitan areas selected.  Estimated costs for each source
are aggregated for the metropolitan areas and are given in terms of
total investment required as well as the total annual cost which can
be expected by Fiscal Year 1976.
     The scope of the extended analysis of the economic impact of air
pollution control costs on each of the industrial processes is limited
to the analysis of the relationship between the expected air pollution
control costs and product price changes and profit positions of firms
within each source or group of sources.  Information is presented on
market and industry structure in order to determine those factors
which principally affect market prices and profits as well as the
viability of individual plants and firms subjected to additional invest-
ment requirements and operating costs.  The analysis carried out to
study the aggregate effects of the individual industry impacts was
limited to two major buyer industries—motor vehicle and construction.
These two industries are foci of cumulative cost increases because
they are major purchasers from many of the larger and more affected
industrial sources studied.  Finally, using the input-output analysis
technique, the effect of air pollution control costs on the overall
price level of the national economy was determined.
                                   1-3

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                    III.  PRINCIPAL STUDY LIMITATIONS

     The principal limitations of this study are described below.
Limitations are discussed separately and in greater detail in Appendix
III, Mobile Sources, and Appendix IV, Stationary Sources.
     The principal limitation to the mobile source air pollution control
cost and emission analyses is imposed by data inadequacies.  Second,
the analyses are limited to gasoline powered automobiles and light and
heavy-duty trucks.  Third, control costs are limited to newly purchased
vehicles, although annual emissions are calculated for the total vehicular
population excluding buses and diesel trucks.
     The major data limitations experienced in the analysis include:
present size of the vehicle population, mileage data, vehicle classi-
fication, emission factors and, probably most significant, control
system costs.  Vehicle registration data tend to include duplicate
counting and are also somewhat inconsistent with respect to vehicle
classification.  This necessitated careful analysis of available data
in order to reduce multiple vehicle counts to a minimum as well as to
develop a reasonable distribution of vehicle classification.  The
development of emission factors for mobile sources involved assumptions
concerning typical vehicular use patterns.  For this study, government
standard definitions were used where they existed.  To obtain data on
particulate emissions, which are not well defined and for which there
is no  standard measurement procedure, published literature and other
industrial information were used.  Finally, control system cost data
are sketchy at best.   Manufacturers of such devices cannot, or will
not, give exact cost figures for motor vehicle controls.  This report
utilizes a combination of "off the record" interviews with manufacturers
plus whatever published estimates were available.  For items not yet in
production, the same basic approach was used, but with much less confidence.
                                   1-4

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     For the stationary source  category,  several  general study limitations
should be stressed.  Air pollution  control  costs  were estimated only for
establishments located within the selected  298 metropolitan areas and
only for the six pollutants presented  above.   For most sources, however,
this represents the majority of plants  in the  United States and the
most significant pollutants involved.   In any  case,  the total costs
presented in this report should not be  considered as the total cost
for achieving clean air—neither in the 298 areas nor in the Nation.
     More specific limitations  to the  air pollution  control cost and
economic analyses are related to data  insufficiency  and the need to
establish various working  assumptions.
     Ideally, estimation of air pollution control costs and related
emission estimates require data on  the  size, details on all emission
sources, and present level of emission  controls at each establishment.
Unfortunately, the required data are rarely obtainable from available
sources.  Primary sources  of data utilized  in  this study were obtained
from technical and trade journals,  APCO surveys,  reports from the
Department  of Gommerce, the Bureau  of  the Census, other government
agencies, and private communication with  individual  manufacturing firms
and trade associations.  Whenever detailed  data were unavailable,
assumptions were made in order  to develop the  required cost and emission •
estimates.
     As  far as limitations affecting the  economic impact analyses,  it
is equally  true that the principal  difficulty  hinges on data and infor-
mation inadequacies.  The  inability to  adequately define company and
industry economic structure in  terms of revenue,  profit, operating
levels,  capital availability and other  key  factors,  as well as  the
inability to take into account  specific corporation  accounting  prac-
tices, are  stringent limitations to the analyses.  In addition,  certain
assumptions such as working with constant 1967 dollars,  unvarying tech-
nology,  unchanging patterns of  product  substitution  and product and
process  mix for firms, and the  use  of  simplified  economic scale models
must also be considered as-limitations.  The resultant product
is a first  level analysis, and  within  the limitations imposed,  these
results  present a picture  from  which conclusions  and decisions  can  be
made with some level of assurance.
                                   1-5

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                          IV.  PLAN OF THE REPORT

     The  results of this  study are presented in the following  four
 chapters.   Chapter 2 discusses the overall study methodology employed
 to  develop  (1)  the control cost and emission estimates for mobile  and
 stationary  sources, (2) the economic impact analysis for the industrial
 process sources, and (3)  the resultant aggregate impact analysis.   Chapter
 3 presents  a  summary of emissions, controls and costs for mobile sources.
 Chapter 4 presents a summary of emissions, controls and costs  for  all
 categories  of stationary  sources.  Chapter 5 presents a detailed dis-
 cussion of  the  analytical framework employed in determining the economic
 impact of the costs of controlling stationary sources as well  as summary
 statements  of the results.  Summary results include statements on  an
 industry-by-industry basis in addition to a discussion of the  aggregate
 effects of  the  control costs.
     Included also in the report are seven appendixes.  Appendix I
 defines the 298 metropolitan areas which serve as the geographic scope
 of  the stationary sources analysis.  Appendix II presents the  emission
 control standards applied for the purposes of the study for both mobile
 and stationary  sources.  Appendix III presents a detailed technical
 discussion  of the mobile source analysis.  Appendix IV presents the
 details of  the  engineering analysis for each stationary source as well
 as  the details  of the economic analysis for each industrial process
 source.  Appendix V presents a broad based discussion of the subject,
 problems  and potential solutions of controlling stationary combustion
 sources.  Appendix VI presents an analysis of the aggregate effects of
 industry changes upon buyer industries and consumer prices.  Appendix VII
 is  the report bibliography.  Computer programs (Volume II) that facilitate
 cost projections, and a survey plan (Volume III) for obtaining plant and
plant process information not now available are published as two
separate reports.
                                    1-6

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                                Chapter 2
                            Study Methodology

                            I.  INTRODUCTION

     The purpose of this chapter is to describe the methodological
framework which serves as the basis for estimating air pollution emissions
and control costs carried out in this research.  For simplicity, the
discussion is separated under two general headings:  "Mobile Sources
Methodology" and "Stationary Sources Methodology."

                     II.  MOBILE SOURCES METHODOLOGY

A.   Overview
     The control cost and emission analyses for the mobile source
category focussed only on gasoline powered automobiles and light and
heavy-duty trucks.  Buses and diesel trucks were not explicitly con-
sidered in the analysis.  The  baseline year for the analysis was
Model Year 1967.  Basically the methodology involved:  (1) estimating
the characteristics of the vehicle population in terms of number, type
of vehicle and distribution of vehicle by age for each year of the
period 1967 through 1976, (2) estimating control costs to purchasers of
new vehicles purchased during the period 1967 through Fiscal Year 1976,
and (3) estimating annual emissions of each pollutant both with and
without installation of control systems for the total vehicle population.
By 1976, over 80 percent of all vehicles in service will be model years
1967 through 1976.  Finally, only air pollution control systems of
proven technical feasibility were considered.
B.   Selection of Vehicle Types and Pollutants
     Considering the accuracy of available data and the significantly
large fraction of vehicles represented by gasoline powered automobiles
and light and heavy-duty trucks, the rationale for limiting the analysis
to these vehicles and the exclusion of buses and diesel trucks is that
the latter vehicles would not appreciably modify the resulting cost and
emission analysis.  The pollutants selected for the analysis were hydro-
carbons, oxides of nitrogen, carbon monoxide,  and total particulates.
                                   2-1

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 On a Nationwide basis,  the  contribution  of  each  of  these emissions from
 mobile sources is  a  significant  fraction of the  total emissions of each
 pollutant.   In addition,  emission factors have been estimated,  control
 standards  proposed,  and control  technology  determined for each  of these.
 C.   Engineering and Cost Analysis
      The engineering and  cost analysis presented in Appendix III are
 predicated upon meeting increasingly stringent emission  standards
 (Appendix II) for  each  of the pollutants for each model  vehicle from
 1967 through 1976.   To  meet these standards, factory installed  control
 systems or combination  of control systems have been assumed.  The control
 systems for which  costs have been estimated are presented in Tables  III-4
 and III-5  of Appendix III.   Costs were estimated in terms of increased
 purchase and annual  operating and maintenance costs to purchasers of
 new vehicles.  For those  control systems which could result  in  reduced
 operating  costs, calculations were made  to  estimate these offsetting
 benefits.   Information  on initial control costs and anticipated incre-
 mental operating and maintenance costs were based upon available
 published  data as  well  as personal communications with the automobile
 companies  and with control  system manufacturers.  Operating  and main-
 tenance costs were based  upon average vehicle use patterns.
      The emission  analysis  included calculation of  potential annual
 emissions  for each pollutant without control, annual  emissions  assuming
 adoption of  control  practices, and the percent reduction  of  emissions
 on a yearly  and cumulative basis.  Emission factors were  utilized which
 incorporated standard government definitions of typical vehicle  use
 patterns.  Acknowledgement of a  typical  vehicle use  pattern  is necessary
because  emission factors  are stated in terms of mass  rate per typical
mile driven.
     A detailed technical description of the analysis  as well as  a
presentation of the  results can be found in  Chapter 3 and Appendix III.
                                   2-2

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                   III.   STATIONARY SOURCES METHODOLOGY

A.   Overview
     The methodology followed in estimating air pollution control costs
and  emissions was basically an extension of last year's effort.—
Minor  changes were incorporated, when new and improved data and infor-
mation warranted, to improve the accuracy of estimates for various
sources or pollutant types.  This year, however, the study went beyond
simply developing air pollution control cost estimates.  For most of
the  industrial process sources, economic analyses were performed to
determine the impact of the investment and annual cost requirements
on the individual industry as well as aggregate impact on selected
sectors and the national economy.
      The steps taken in the engineering and cost analyses were:
      1)   Identification of significant sources for each- pollutant.
      2)   Estimation of 1967 baseline data showing levels of emissions
           and controls.
      3)   Calculation of pollutant removal efficiencies required to
           meet the standards assumed.
      4)   Determination of appropriate control technology to achieve
           the required removal efficiencies.
      5)   Estimation of investment and annual costs for each control
           technique used by sources in existence in 1967.
      6)   Projection of emission and cost estimates through Fiscal
           Year 1976 and without indicated controls.
      The following steps were added to the engineering and cost analyses
 to determine the economic impact of control costs on the industrial
process sources:
      1)   Description of the industry and market structure relevant
           to each pollutant source.
 —   A departure from the previous effort (see Appendix VII,  Bibliography,
 for report listing), although not specifically a methodological change,  is  in
 the presentation of the estimates.  In this report,  the estimates are  pre-
.sented in an aggregate fashion for 298 metropolitan  areas instead of indi-
 vidual estimates for each area of the 100 metropolitan areas designated  last
 year.   The accuracy of aggregate estimates is clearly superior to individual
 regional estimates due to the necessity of utilizing average values of certain
 key parameters in the cost and emission estimating relationships.

                                   2-3

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     2)    Estimation of investment and annual control costs for typical
          plants or firms in each industry, where feasible.
     3)    Calculation of annual cost per unit of product sold.
     4)    Estimation of degree of cost shifting through product price
          by end of Fiscal Year 1976.
     5)    Evaluation of economic impact on typical firms, industry
          structures, prices,  and sales.
     6)    Estimation of aggregate economic impact on selected industries
          and the national economy.
B.   Selection of Sources and  Pollutants
     Of the many pollutants for which control expenditures may eventually
be required, only six were selected  by APCO for this study.  They are
particulates, sulfur oxides, hydrocarbons, carbon monoxide, fluorides,
and lead.  Choice of these particular pollutants was based on two impor-
tant considerations.  First, and most important, these pollutants are
significant because of their widespread and adverse effects on communities.
Second, acceptable emission control  techniques exist for these six
pollutants.  In fact, air quality criteria and control technology docu-
ments for particulates, sulfur oxides, hydrocarbons, and carbon monoxide
have already been published by APCO; fluoride and lead documents  will
be published in the near future.
     The sources selected for  inclusion in this study are those estimated to
emit significant quantities of one or more of the above pollutants.
The sources selected by APCO include solid waste disposal,  commercial-
institutional heating plants,  industrial  boilers, residential heating
plants, steam-electric generating plants, and the following industrial
process sources:  asphalt, brick and tile, coal cleaning, cement,
elemental phosphorus, grain handling and milling (animal feed milling
only), gray iron foundries, iron and steel^ kraft (sulfate) pulp,  lime,
petroleum products storage, petroleum refineries, phosphate fertilizer,
primary nonferrous metallurgy (copper, lead,  zinc,  and aluminum),  rubber
(tires), secondary nonferrous  metallurgy  (copper, brass, bronze,  aluminum,
lead, and zinc), sulfuric acid, and  varnish.
                                   2-4

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C.   Engineering and Cost Analysis
     Before cost analysis could be performed, a thorough engineering
analysis of the sources was necessary.  This included an understanding
of production processes and an appraisal of their emissicms on existing
levels of control.  In addition, there were numerous process steps for
which one or more unit processes could be employed, e.gj, wet or dry
calcining of cement.
     For each unit process, emission factors were either obtained from
published literature or derived.  Discussions of the emission factors
employed for specific sources are presented in Appendix IV-  Uncontrol-
led emissions were estimated for the unit processes simply by multiplying
emission factors by appropriate production estimates.  Estimates for a
given source were made on an hourly, daily, or yearly basis for a given
plant, an area, or the entire Nation.
     To ascertain whether the 1967 emissions from a given source were in
compliance with the assumed standards (Appendix II), it was necessary
to estimate the existing level of control.  Ideally, the level of control
should be determined for each source within each metropolitan area.
However, it became apparent early in the project that area-specific
information could not be obtained during the available time, if at all.
Accordingly, estimates of 1967 control levels were based on the best
                          2/
obtainable secondary data.—  For some sources, average control levels
for the Nation were applied to the sources in all 298 metropolitan areas.
     In some cases where emissions were being controlled, the control
system was actually part of the production process; such costs were not
considered to be air pollution control expenses.
     The next step in the analysis was the calculation of the pollutant
removal efficiences required to satisfy the emission standards assumed.
Given the allowable and the existing emissions, the required removal
efficiency was calculated using the following equation:
                        R.E. =

 2/
—   For  the  gray  iron  industry,  control  data on a plant by plant basis
were available  from an  APCO  survey.
                                  2-5

-------
                  where:  R.E. is the removal efficiency (in
                          percentage) required;
                          Qe is the existing emission; and
                          Qa is the allowable emission.
The relationship holds for both concentration-based and mass-rate
emission standards.
     The final step of the engineering analysis was the identification
of applicable air pollution control alternatives.   In nearly all cases,
the designation of an alternative on which to base cost estimates
was made because of industrial experience with the control alternative.
Occasionally, it became apparent that one alternative was clearly superior
to all others, but this was the exception rather than the rule.  In
most cases,  there were several alternatives which would meet requirements.
For example, the control of particulates can be accomplished by use of
cyclones, fabric filters, electrostatic precipitators or wet-type scrubbers
and, in the  case of combustion equipment, by fuel substitution.  Sulfur
oxide emissions can be reduced by fuel substitution, gas scrubbing, and
sulfur compound recovery systems.  In general, the designation of control
alternatives for carbon monoxide and hydrocarbons was straightforward
since the number of alternatives was more limited.  The specific control
alternatives on which cost estimates for the given source were based are
presented in Appendix IV.  In general, the size of air pollution
control equipment is expressed in terms of gas throughput and process
size—gas volume relationships were determined for each xinit process.
In addition, certain engineering factors related to equipment cost had
to be established, e.g., required pressure drop for venturi scrubbers;
construction material; type of fabric filter material, wet or dry-type
electrostatic precipitator, etc.  Once these factors were determined,
reasonable estimates of purchase, installation, and operating costs
could be made.   An example of a production - control cost relationship
is shown in Figure 2-1 for the control of gray iron cupolas.
     In order to apply the findings of engineering analysis to control
cost estimation, a variety of source statistics were required.  These
source statistics included regional data for plant location and number
of plants, production, capacity, and value of shipments, as applicable.
                                 2-6

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   80O|—
   60O
 o
 o
 o
*£ 400
 o
 o
   200
                 O INSTALLED



                 Q ANNUAL
                6.25
12.5
18.75        25        31.25


CAPACITY - TONS/HOUR
37.5
43.75
50.0
                        Fig.  2-1.  Control Costs  Versus Gray Iron Cupola Capacity.

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      Primary  data  on  solid waste disposal were obtained from  "The
 National  Solid  Wastes  Survey" and the 1968 National Survey of Community
 Practices.  For stationary combustion sources, the major sources of  cost
 estimating  data are given in Table 2-1.  The principal sources of these
 data for  industrial process sources are presented in Tables 2-2 through
 2-4.   Complete  citations for most references may be found in  the
 bibliography, Appendix VII.
      A summary  of  statistics for industrial process sources is presented
 in Table  2-5.
      Once a control alternative was designed and gas volume and other
 design specifications  determined, control costs were calculated as a
 function  of capacity  and other production characteristics.  The general
 array of  tasks  essential to the estimation of emission control costs
                                     3/
 is briefly  described  in this section.—  The initial task was  that of
 gathering information  about the number of plants or establishments in
 each  of the 298 metropolitan areas.   When available, detailed information
 about the number of plants or establishments in each of the 298 metropo-
 litan areas and the size or capacity of individual processes within each
 plant was compiled.  Most often, employment data were the best available
 indicators  of plant size and production.  The production estimate was then
 used  to determine  exhaust gas volume and emissions.   In a few cases, the
 number  of plants or the total capacity in an area had to be estimated
 because available  records were incomplete.  The amount of specific
 information that was obtained determined to a major extent the manner
 in which  cost estimates were calculated.
      Another task was  to determine which plants needed emission controls,
 i.e., which plants emitted pollutants in excess of the assumed standards.
 Information inputs for this task were the 1967 level of control estimates
 and other factors provided by the engineering analysis described above.
     Next, unit cost estimates for control alternatives or a combination
 of alternatives were computed.   Data for these computations were obtained
 from  a variety of sources:  surveys, previous APCO studies, technical
 articles on specific control equipment,  and articles dealing with specific
 industries.   Unit cost estimates included all recognizable significant
 elements of costs; both initial investment and continuing annual costs
3/
-    Minor but significant variations of the basic technique were necessary;
the relevant sections of Appendix IV describes the method for each source
category.
                                   2-8

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     TABLE 2-1.  - MAJOR SOURCES OF DATA FOR STATIONARY COMBUSTION
                       COST ESTIMATING ANALYSES
               Source
          Major Document(s)
Steam-electric power generation
  plants

Industrial boilers

Commercial-institutional heating
  plants
Residential heating plants
Steam-Electric Plant Construction
  Cost and Annual Production Expenses

1963 Census of Manufactures

Supply and Demand for Energy in
  the U.S. by States and Regions,
  1960 and 1967.
Interstate Air Pollution Study;  St.  Louis,
  Phase II, Project Report,
  Air Pollution Emissions Inventory

1960 Census of Housing
                                 2-9

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               TABLE 2-2   -  PRINCIPAL  SOURCES OF DATA ON INDUSTRIAL
                  PROCESS  SOURCE  LOCATION, NUMBER, AND CAPACITIES
                                   Data Class
            United States
      298 Metropolitan Areas
American  Bureau of Metal Statistics
   1968 Yearbook

Directory of  Chemical Producers,
   Stanford Research Institute

Directory of  American Iron and Steel
   Works of the United States and
   Canada, 1967

Rubber Redbook, Directory of the
   Rubber  Industry, 1968 (20th ed.)

Waste Trade Directory

1963 Census of Business

Rock Products, July 1967 and May 1969

Mimeographed  lists, U.S. Bureau of
  Mines

Tape from Dun and Bradstreet

List prepared by Resources Research,
  Inc.

N.E.S.S. Report, NAPCA

Lists from state highway departments

Lists from surveys by U.S.  Department
  of Commerce and NAPCA

Telephone contacts with firms
The sources used for the U.S. data
on number of employees from 1963
Census of Manufactures and 1964-67
County Business Patterns
                                      2-10

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    TABLE 2-3. - PRINCIPAL SOURCES OF  DATA ON INDUSTRIAL PROCESS  SOURCE PRODUCTION
                                      Data Class
            United States
       298 Metropolitan Areas
   American Bureau of Metal Statistics
     1968 Yearbook

   Bureau of Mines Minerals Yearbook,
     1966 and 1967

   Survey of Current Business, 1968
     issues

   1963 Census of Manufactures

   1963 U.S. Census of Business

   U.S. Industrial Outlook, 1969

   "Sulfuric Acid," Current Industrial
     Reports, 1967

   Hot-Mix Asphalt Production and Use
     Facts for 1967

   The Statistics of Paper, 1968
     Supplement

   Feed Situation, ERS, USDA, May 1969
U.S. capacity in the industry was
prorated to each of the 298 metro-
politan areas on data from the Dun
and Bradstreet tape, 1963 Census
of Manufactures and 1964-67 County
Business Patterns.
TABLE 2-4.  -  PRINCIPAL SOURCES  OF  DATA ON  INDUSTRIAL PROCESS SOURCE VALUE OF SHIPMENTS
Data Class
United States
Census of Manufactures , Preliminary
Report
1963 Census of Manufactures
1963 U.S. Census of Business
Bureau of Mines Minerals Yearbook,
1967
"Sulfuric. Acid," Current Industrial
Reports, 1967
U.S. Industrial Outlook 1969
Telephone contacts with firms
Estimates of U.S. production
Annual Report , International Paper Co . ,
1966
298 Metropolitan Areas
U.S. value of shipments by industry
was prorated to each of the 298
metropolitan areas on the basis of
the ratio of metropolitan area to
U.S. production.
                                        2-11

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                                      TABLE 2-5. -  1967 STATISTICS FOR INDUSTRIAL PROCESS SOURCES (NATIONALLY AND  IN  298 METROPOLITAN AREAS )-'
K>
c
Source and Unit of
Asphalt Batching
Brick and Tile
Coal Cleaning
Cement
Elemental Phosphorus
Grain : Handling
Milling
Gray Iron Foundries
Iron and Steel
Kraft (Sulfate) Pulp
Line
Petroleum Products and Storage
Petroleum Refineries
Phosphate Fertilizer
Primary Nonferrous
Metallurgy: Aluminum
Copper
Lead
Zinc
Rubber (Tires)
Secondary Nonferrous Metallurgy
Sulf uric Acid
Varnish
Measurement *
tons of paving mixture-
brick equivalents
tons
barrels
tons
bushels^'
tons
tons of castings-
tons of raw steel
tons
tons
gallons-
barrels
tons P«0,-
-ji
tonsy/
tonsy.
. / /
tons-^
tiresi/
tons
tons
gallons
Total Number
of Sources
United
States
1,284
469
667
178
13
11,124
2,496
1,446
142
116
185
29,664
256
179

24
19
6
15
60
627
213
220
298
Areas
1,064
301
256
138
8
4,098
2,155
1,179
134
81
113
14,998
199
147

14
10
4
9
54
583
180
216
Capacity^
(Millions of
Units per Year)
United
States
658.0
10,100.0
370.0
515.0
0.7
6,430.0
66.0
17.0
165.0
32.1
21.0
182.0
4,210.0
12.2

3.5
9.3
1.7
1.3
l.ll/
2.6
38.7
23.0
298
Areas
549.0
7,150.0
139^0
395.0
0.3
3,480.0
55.5
14.0
161.0
22.5
14.2
129.0
3,620.0
10.3

2.0
6.4
1.2
0.6
i.oS/
1.9
32.9
22.0
Production—
(Millions of
Units per Year)
United
States
216.0
8,260.0
349.0
374.0
0.6
18,000.0
55.0
14.. 3
127.0
23.9
16.8
1,820.0
3,580.0
7.0

3.3
2.6
0.5
0.9
213.0
2.3
28.8
10.0
298
Areas
180.0
5,910.0
131.0
252.0
0.3
9,760.0
46.2
11.8
124.0
16.8
11.3
1,290.0
2,720.0
5.7

1.9
1.8
0.3
0.4
196.0
1.7
24.5
9.6
Value of Shipments
(Billions of
Dollars per Year)
United
States
1.50
0.35
1.53
1.21
0.20
N/A5-7
4.60
2.70
13.30
3.60
0.24
22.50
20.29
1.60

1.56
1.98
0.13
0.33
3.70
1.59
0.25
0.03
298
Areas
1.30
0.25
0.58
0.83
0.14
N/A^
3.70
2.20
13.10
2.50
0.16
15.80
15.41
1.20

0.88
1.36
0.92
0.15
3.40
147
0.21
0.03
             —   The 298 metropolitan areas are defined in Appendix I.

             —'   Capacity and production are in millions of units  (tons, etc.) unless otherwise footnoted.

             —   Capacity is calculated assuming 1,000 operating hours per year.

             —   Capacity is in million bushels of storage space; production, million bushels of throughput.

             -'   Not applicable.

             —    Capacity is in billion gallons of gasoline storage space; production, billion gallons of gasoline handled.

             ~H   "Tons" applies to smelters; for copper and lead, capacity is given as input material and production is adjusted to remove  effect  of  a labor strike.

             —    Capacity is in millions o£ tires per day.

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information and estimates or assumptions were used only in the absence
of specific data.
     When installation of new control systems is involved, control costs
are reported in terms of the initial investment required to implement
controls and the continuing annual expenses related to that investment.
The investment cost is the total expense of purchasing and installing
control equipment.  The annual cost is the sum of yearly charges for
capital-related costs (interest on the investment funds, property taxes
where applicable, insurance premiums, and depreciation charges) plus
operating  (fuel, labor, utilities, and supplies) and maintenance costs.
     To account for the effect of upgrading existing control equipment,
where possible, to meet increased control requirements, a set of cost-
efficiency parameters called multipliers were derived.  The multipliers
were derived from the relationship that installed costs for 99 percent
.control would be double the cost for 90 percent control and that costs
for 99.9 percent control would be three times the cost at 90 percent.
The three  points,  (i.e., 90 percent equals 1.0, 99.0 equals 2.0, and
99.9 percent equals 3.0) were used to establish an exponential curve
from which cost multipliers for other specific control efficiency levels
could be read.  With the multipliers taken from the curve, costs given
in the literature for one level of efficiency can be adjusted for any
other efficiency level.  As an example, unit cost for a 95 percent
efficiency control level can be adjusted for 98 percent efficiency as
follows:
                              M
                        C   --22x C
                        C98 ~ M   X °95
                               95
                where:  C_fi = cost for 98% control;
                        C95 = cost for 95% control;
                        M R = multiplier for 98% control; and
                              multiplier for 95% control.
Hence, incremental investment costs can be calculated on the basis of
COQ - Cn_.  Annual operating and maintenance costs in this situation
 9o    95
                                   2-13

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 are  also  reported  on  the basis of the increase required to move  from
 a  lower removal  efficiency to the higher level.
      For  this  study,  the level of control which existed in an  industry
 as of 1967 was used as  a baseline; cost estimates were calculated only
 for providing  controls  in excess of  the 1967 average  level for a pol-
 lutant and a source.  For example, the estimated 1967 average  level of
 control in the asphalt  industry was  80 percent; therefore, the estimated
 costs of  control reflect only expenditures that must be made to  comply
 with the  assumed standard by the industry over and above the 1967 base-
 line of 80 percent.   This working assumption follows from the  premise
 that the  level of  control in effect  when the Clean Air Act was amended
 in 1967 is not attributable to the Act.  It was further assumed  that
 the additional sources  constructed after 1967 will be controlled at
 the 1967  control level  and hence  only the control required above this
 level would be attributable to the Act.
      In order  to project air pollution control cost and emission
 estimates through  Fiscal Year 1976 for the industrial process  sources,
 it was necessary to develop projections of the annual growth rates  of
 production and capacity for each source.  This was accomplished  by  pro-
 jecting future production on the basis of a least square regression
                                                      4/
 analysis  with  time  (year) as the independent variable.—  The average
 annual rate of growth (or decline) in production could then be projected.
 The  average annual rates of growth (or decline) in capacity were developed
 by relating the  change in production projected to the change in  capacity
 necessary in order to have the Fiscal Year 1976 operating rate equal to
 the  average operating rate for the period 1958-1968.  Table 2-6  presents
 the  average annual growth rates for both production and capacity utilized
 in this study.
      Except for  the gray iron foundry industry and solid waste disposal,
 estimates  of annual control costs were based on ten-year, straight-line
 (10  percent) depreciation of the indicated investment and 10 percent  to
 cover  capital-related charges such as interest, taxes, and insurance.
 In the gray iron foundry industry, depreciation and capital-related ex-
 penses were obtained from plant survey data.  For estimates in solid
—    Except where such exogenous events as the apparent removal
of tetraethyl lead from gasoline, and hence the predicted downward
demand for lead, made it apparent that this technique was not valid.

                                 2-14

-------
TABLE 2-6.-AVERAGE ANNUAL GROWTH RATE FOR PRODUCTION AND CAPACITY
Industry
Steam-Electric (Fossil Fuel)
Asphalt Batching
Brick and Tile
Coal Cleaning
Cement
Elemental Phosphorus
Grain Handling and Milling
Gray Iron Foundries
Iron and Steel
Kraft (Sulfate) Pulp
Lime
Petroleum Products and Storage
Petroleum Refineries
Phosphate Fertilizer
Primary Nonferrous Metallurgy:
Aluminum
Copper
Lead
Zinc
Rubber (Tires)
Secondary Nonferrous Metallurgy
Sulfuric Acid
Varnish
Average Annual Growth
Rate for Production
(Percent)
4.3
3.1
1.5
3.2
2.0
4.6
2.8
6.2
3.9
6.0
4.7
2.7
2.7
5.1

5.8
1.3
4.1
2.6
4.2
6.1
4.9
-2.4
Average Annual Growth
Rate for Capacity
(Percent)
4.3
3.1
1.5
3.2
2.0
4.9
3.2
6.6
4.2
6.0
4.7
2.7
2.8
5.3

4.4
0.2
4.1
1.4
5.1
6.6
5.1
-5.9
                              2-15

-------
waste disposal, accounting conventions normally used by municipalities
were employed.  For all industries, maintenance and other operating
expenses were estimated on the basis of the types of process and control
equipment involved.
     Finally, it should be noted that the cost and emission estimates
were based on the best available data.  Where data were scarce, engineering
judgement had to be applied to fill in the analytical gaps.  In all
cases all assumptions were carefully reviewed.
D.   Economic Analysis
     The purpose of the economic analysis was to estimate th.e impact
that would be felt by firms applying the designated controls to plants
or operating units within the company structure, and thereby incurring
the required investment and annualized cost.   It was intended to answer,
so far as possible, questions about the extent to which firms might
shift the costs to customers in the form of higher prices,  whether
profits would be reduced, whether competitive market patterns would be
disturbed, and whether some plants or companies would be forced to  close.
     The form of the analysis differed somewhat from industry to industry,
depending upon the absolute magnitude of the  costs involved,  the structure
of the industry and its market,  and the kinds and amounts of data
available.  In general, the analysis followed the steps  outlined in
Paragraph A of this section and as described  below:
     1)    Description of the industry and market.   Basic data were
          assembled showing,  within the data  limitations, the number
          of  firms, size distribution,  operating characteristics, and
          similar  measures  of each industry.   Product markets,  major
          customers,  sales  practices,  and distribution of sales were
          also  defined  for  each  industry.   Estimates were made of price
          trends,  demand, production,  capacity,  and  capacity utiliza-
          tion.  This stage of  the analysis concluded with  a qualitative
                                  2-16

-------
      evaluation of the type and intensity of intra- and inter-
      industry competition for each industry studied.
2)    Estimation of investment and annual control costs.  The costs
      generated per control technique, per unit process or plant
      in the engineering and cost analysis, were translated into in-
      vestment requirements and annual costs per firm, or per plant
      if that was the data availability limit.  Where feasible,
      typical firms or plants were defined to represent the signi-
      ficant variations of size and process utilization within the
      industry and cost differentials resulting from these calculated
      variations.  These costs were compared, where possible, with
      typical revenues and profits.
3)    Calculation of annual cost per unit of production.  The range
      of annual costs developed for typical firms or plants in the
      previous step were expressed as unit costs on the basis of
      the estimated production for those firms or plants, assuming
      a percentage utilization of capacity.  Unit costs were then
      expressed as percentages of price.
4)    Estimation of cost shifting.  A qualitative evaluation was
      made of the price elasticity of demand over a price range
      equal to maximum annual cost per unit of product and the
      pricing practices of the industry, based on the industry and
      market data developed in Step 1.  An estimate was then made
      of the probability that firms in each industry would raise
      prices to offset the increased costs resulting from instal-
      lation of controls.  The most probable change in price attri-
      butable to control costs by Fiscal Year 1976, exclusive of
      all other price influences, was estimated.
5)    Evaluation of economic impact.  Qualitative evaluation was
      made of the impact of nonshiftable control costs on the
      revenue and profit position of typical firms.  Similarly,
      the impact of price changes on competitive markets was
      examined.  Finally, the probability that some firms in each
      industry might be forced out of business or forced to change
      production and product patterns was estimated.
                            2-17

-------
6)   Estimation of aggregate impact.   Using input-output analysis,
     the cumulative impact of price changes due to control costs
     was estimated for the automobile  and construction industries.
     The aggregate effect  of price  changes induced by control costs
     on the national price level was also estimated,  using the
     Gross  National Product  (GNP) deflator as  the  index of change.
                              2-18

-------
                                Chapter 3
                        Summary of Mobile  Sources

                            I.  INTRODUCTION

     The purpose of this chapter is to present  the results of  the
mobile sources control cost and emission reduction analyses.   The
mobile sources included in the analyses were gasoline powered  auto-
mobiles and light and heavy-duty trucks.   Pollutants considered were
hydrocarbons, carbon monoxide, oxides of nitrogen, and total particu-
lates.  The analyses cover the period 1967 through Fiscal Year 1976.
A detailed discussion of the analyses and  results are presented in
Appendix III of this report.

                         II.  EMISSION STANDARDS

     Emission standards increasing in stringency through Fiscal Year
1976 were applied for each pollutant.  These standards were considered
to apply only to newly purchased vehicles.  None of the emission standards
used in this report apply to used vehicles.  The control standards to
be met by newly purchased vehicles in Fiscal Year 1976 are considered
to be the limit of what can be expected with the present reciprocating
internal combustion engine.  It should be noted that the specific
standards applied in this report were those promulgated or under con-
sideration as of July 15, 1970.  As will be reiterated in Appendix III,
if the implementation of the standards adopted  for this study  is
accelerated or if the standards are increased in stringency it can be
expected that control costs will rise proportionally while annual
emissions can be expected to decrease.

                      III.  EMISSION CONTROL COSTS

     Emission control costs were calculated on  the basis of additional
investment and operating and maintenance costs  to purchasers and users
                                   3-1

-------
 of  new vehicles beginning with vehicle model year 1968.  For  the  purposes
 of  analysis,  vehicle model year and fiscal year were considered to  be
 equivalent.   Table  3-1 summarizes unit investment and annual  operating
 and maintenance costs for automobiles, light-duty trucks and  heavy-duty
 trucks, as well as  total annual investment requirements and cumulative
 total annual  operating and maintenance costs.  As can be seen, unit
 investment costs per vehicle range from two dollars in 1968 to 240
 dollars in 1976 for autos and light-duty trucks and from zero in  1968
 to  46 dollars in 1976 for heavy-duty trucks.  The resultant national
 investment requirement ranged from $13.9 million in 1968 to $3.03 billion
 in  1976.  For autos and light-duty trucks, the control alternatives
 chosen for the years 1968 thru 1972 actually lead to reduced  operating
 and maintenance costs.  Starting with the control systems installed
 from 1973 on,  however, increased operating and maintenance do occur.
 For heavy-duty trucks, operating and maintenance costs are either zero
 or  positive.   Cumulatively, national annual operating and maintenance
 costs reach $908 million by 1976.

                        IV.  EMISSION REDUCTIONS

      Table 3-2 summarizes the effect of the control costs expenditures
 on  the annual  emission of each of the pollutants.  By Fiscal Year 1976,
 total national emissions of hydrocarbons, carbon monoxide, nitrogen
 oxides, and particulates from autos and trucks of all ages are reduced
 71,  60, 23, and 16  percent, respectively.  It is significant  to note
 that  before 1975, when nitrogen oxide standards become effective,
 increasing the control of hydrocarbons and carbon monoxide lead to
 increases in nitrogen oxide emissions.  After 1975, the controlling of
 these  emissions on  a national level begins with the introduction  of
nitrogen oxide control systems.   Also, the standards and hence reduction
of particulate emissions do not begin until 1975.  As time passes and
with  larger fractions of the vehicle population being under control by
Fiscal Year 1976, the percent reduction of all pollutants from potential
emissions will increase.
                                   3-2

-------
                  TABLE 3-1. - SUMMARY OF MOBILE SOURCES EMISSION CONTROL COSTS
Fiscal Year

1967
1968
f3 1969
u>
1970
1971
1972
1973
1974
1975
1976
Investment
Cost per
Vehicle
[Autos
and Light-
Duty
Trucks ]
(Dollars)

0
2.00
2.00

7.00
17.00
17.00
42.00
42.00
240.00
240.00
Additional Investment
Operating Cost per
and Mainte- Vehicle
nance Cost [Heavy-
per Vehicle Duty
L Autos and Trucks]
Light-Duty (Dollars)
Trucks ]
(Dollars/
Year)
0 0
-5 . 10— 0
-5 . 10— 0

-5.10^' 9.00
-2. 70^ 9.00
-2.70^ 9.00
7.90 21.00
7.90 21.00
20.70 46.00
20.70 46.00
Additional Incremental
Operating Investment
and Mainte- Cost to
nance Cost Purchasers
per Vehicle of Model
[Heavy-Duty Year Vehicle
Trucks] (Millions of
(Dollars/ Dollars)
Year)

0
0
0

0
0
0
3.50
3.50
13.50
13.50

0
13.9
20.7

56.1
131.1
136.6
346.3
498.5
2,068.7
3,031.7
Cumulative
Annual
Operating
and Mainte-
nance Costs
(Millions
of Dollars)

0
- 35. 4—
- 88.2-^

-138. 3^'
-175. 3^
-208. 9-^
-154.4^
- 50. 3^
743.5
908.6
—    Negative values indicate a savings in cost of operation.

-------
TABLE 3-2. - SUMMARY OF MOBILE SOURCES NATIONAL ANNUAL EMISSION REDUCTION
Fiscal Year , P°teTitialf
(millions of

1967
1968
1969
1970
1971
£ 1972
1973
1974
1975
1976
Hydrocarbons
21.1
24.2
25.4
26.1
26.5
27.3
28.0
28.8
29.9
30.8
Carbon
Monoxide
126.0
130.0
137.0
140.0
143.0
146.0
151.0
155.0
160.0
166.0
Emissions
tons /year)
Nitrogen
Oxides
5.70
5.91
6.18
6 . 35 w--
6.45
6.64
6.82
7.00
7.26
7.50
Controlled Emissions
(millions of tons /year)
Participates
0.33
0.35
0.36
0.37
0.38
0.29
0.40
0.41
0.42
0.44
Hydrocarbons
21.1
20.7
20.2
19.0
17.4
15.7
14.1
12.4
10.7
9.1
Carbon
Monoxide
126.0
125.6
124.4
118.4
110.5
102.0
94.0
86.0
76.3
66.4
Nitrogen
Oxides
5.70
6.07
6.56
6.91
7.20
7.58
7.44
7.13
6.55
5.78
Particulates
.33
0.35
0.36
0.37
0.38
.39
.39
0.41
0.39
0.37

-------
                                 Chapter 4

                      Summary of Stationary Sources

                              I.  INTRODUCTION

     The stationary sources covered in this chapter include solid waste
disposal, stationary fuel consumption for heat and power, and industrial
process sources.  The engineering and technical analysis conducted for
this study provides estimates of the levels of emissions of six pollutants:
particulates, sulfur oxides, carbon monoxide, hydrocarbons, fluorides, and
lead.  The quantities of emissions of these pollutants from each source
were estimated as of 1967.  These provided a baseline from which to estimate
the controls needed, their associated costs, and the control effectiveness
that could be related to the passage of the Clean Air Act of 1967.  Potential
emissions were projected to fiscal year 1976 and the reduced emissions attain-
able in  that year were calculated, along with estimates of the investment
required to meet designated emission standards and the annual cost of con-
trol for fiscal year 1976.  The results of this analysis are presented
in this  chapter.  Detailed discussions of the analyses are presented in
Appendix IV of this report.

                          II.   EMISSION LEVELS
 A.    Solid Waste Disposal
      It is estimated  that  solid waste was  generated  at  the rate  of 10.2
 pounds per person per  day  in the  United States  in  1967.   The 298 metropolitan
 areas  had  an estimated population of  166,882,000 in  that  year and therefore
 approximately 311 million  tons  of solid waste.  Of  this,  15 percent was
 incinerated,  42  percent was  open  burned,  and 43 percent disposed of in
 landfills,  ocean dumping,  composting,  and  other ways.   Incineration and
 open burning  are sources of  particulate,  carbon monoxide, and hydrocarbon
 emissions.   The  initial 1967  estimated emissions and the  1976 levels  of
 these  emissions,  as estimated with and without  implementation of the  Clean
 Air Act, are  shown in  Table  4-1.
                                    4-1

-------
                                         TABLE  4-1.  -  SOLID WASTE  DISPOSAL AND STATIONARY  FUEL  COMBUSTION
                                                ESTIMATES  OF POTENTIAL AND REDUCED EMISSION LEVELS AND ASSOCIATED  COSTS

                                                                      1298 Metropolitan Areas!p
N>
Quantity of Emissions ,/
(Thousands of Tons per Year)—

Source
Solid Waste Disposal
Commercial- Institutional
Heating Plants
Industrial Boilers
Residential Heating Plants
Steam-Electric Power Plants
I/
1.1
I/
A/
5/
Year
1967 ,
FY76 W/0^'
FY76 wA/
1967 ,
FY76 W/0^
FY76 WA/
1967
FY76 W/0
FY76 W
1967
FY76 W/0
FY76 W
1967
FY76 W/0
FY76 W
Part
sox
1,110.0
1,500.0
185.0
127.
152.
135.
1,360.
1,410.
142.
160.
120.
120.
1,600.
2,185.
533.
0
0
0
0
0
0
0
0
0
0
0
0
1,
1,
2,
2,
1,

7,
10,
1,
940
440
400
330
310
100
776
597
597
370
100
600

3,
5,
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
CO
770.0 1
450.0 2
414.0
-
-
—
-
HC F Pb
,400.0 -
,020.0 -
293.0 -
_
_
- - -
; -: i
Associated Emission Control Level Control Costs
(Percent) (Millions of Dollars)
Part
N/A^
N/A 5/
N/A I/
0
0
11.2
61.5
62.0
99.0
0
0
0
78.0
7810
96.6
The 298 metropolitan areas are defined in Appendix I.
Emissions abbreviated are: particulates (Part), sulfur oxides (SO ) , carbon monoxide (CO)
in the table indicate the emission levels meet the applicable regulation (Appendix II) or
Estimates without implementation of the Clean Air Act are shown.
Estimates with implementation of the Clean Air Act are shown.
SO CO HC F Pb Investment Annual
N/A 5/ N/A5/ -
N/A 5/ N/A5_/ - - 201.0 113.0
0 -
0 -
2.8 41.7 25.1
0
0 - - - -
50.5 - 1,050.0 555.0
0
0
0 0 0
0 - - - -
0 - - - -
84.1 - 1,340.0 426.0
, hydrocarbons (HC) , fluorides (F) , and lead (Pb) . Bl
that emissions are negligible or do not exist.
          ~    Not applicable.

-------
B.   Stationary Fuel Combustion
     Combustion of fossil fuels for  the production of heat and power
is the source of substantial emissions of particulates and sulfur
oxides.  Coal and residual fuel oil  are the  fuels causing the most
emissions, while distillate fuel oils and natural gas produce very
small amounts of pollutants when burned in properly adjusted equipment.
     For this analysis ,  the  sources  in  this  category have been  divided
into residential heating, commercial-institutional heating, industrial
boilers  (excluding fuel  combustion that is part  of the direct production
process, as in a  cement  kiln,  for instance), and steam-electric  genera-
tion.
     Included within the 298 metropolitan areas  are 95.3 percent of the
commercial-institutional heating plants, 83.4 percent of the industrial
boilers, 81.0 percent  of the residential heating plants, and 75.0 percent
of the steam-electric  power plants in the United States in 1967.
     Table 4-1 shows the 1967  and 1976 emissions of particulates and
sulfur oxides estimated  for each  of  these sources and the associated
emission control  levels  with and without controls.  It is clear that
industrial boilers and steam-electric power  plants are the most important
sources  of emissions in  this category, although  commercial-institutional
heating  plants contribute substantial emissions  of sulfur oxides as well.
The  control techniques adopted for this study can reduce particulate
emissions from the major sources  by  more than 95 percent.  Control of
sulfur oxides is  somewhat less effective, ranging from an estimated
50.5 percent to an estimated 80.1 percent for the two largest source
categories.
C.   Industrial Processes
     Eighteen industries or  industry groups  were included for analysis
as major sources  of  the  six pollutants under study.  Of these, 15 are
sources  of particulates, three of sulfur oxides, two of carbon monoxide,
three  of hydrocarbons, five  of fluorides, and two of lead.  Table 4-2
shows  the estimated  1967 and 1976 emission levels and control effectiveness
for  each pollutant by  source.
                                  4-3

-------
                   TABU: 4-2.-  INDUSTRIAL  PROCESS  SOURCES - ESTIMATES op POTENTIAL AND REDUCED KMISSION LEVELS AND  ASSOCIATED COSTS
                                                              (298 Metropolitan Areas|-
                                                                                      l/
Quantity of Emissions _.
(Thousands uf Tons per Year)—
Sourco
Asphalt Batching


Brick and Tile


Coal Cleaning


Cement Plants


Elemental. Phosphorus


Grain:
Handling


Milling


Gray Iron Foundries


Iron and Steel


Kraft (Sulfate) Pulp


Lime


Petroleum Products and
Storage

Petroleum Refineries


Phosphate Fertilizer


Primary Nonferroua
Metallurgy:
Aluminum


Copper


Lead


Zinc


Rubber (Tires)


Secondary Nonferrous
Metallurgy

Sulfurlc Acid


Varnish


Year
1967
FY76 U/o2'
FY76 UiV
1967
FY76 U/0
FY76 U
1967
FY76 U/0
FY76 U
1967
FY76 U/O
FY76 U
1967
FY76 W/O
FY76 U

1967
FY76 W/O
FY76 W
1967
FY76 W/O
FY76 W
1967
FY76 W/O
FY76 W
1967
FY76 U/0
FY76 W
1967
FY76 U/0
FY76 U
1967
FY76 U/0
FY76 U
1967
FY76 U/0
FY76 W
1967
FY76 U/0
FY76 U
1967
FY76 U/0
FY76 U


1967
FY76 W/O
FY76 U
1967
FY76 U/0
FY76 U
1967
PY76 U/0
FY76 U
1967
PY76 U/0
FY76 U
1967
FY76 U/0
FY76 U
1967
PY76 U/0
FY76 U
1967
FY76 U/0
FY76 U
1967
FY76 U/0
FY76 H
Part
452.0
571.0
37.8
_
-
-
64.7
92.3
14.1
239.0
280.0
16.1
2.4
3.3
0.2

1,400.0
1,730.0
26.1
274.0
347.0
5.4
166.0
255.0
29.1
1,100.0
1,460.0
93.0
561.0
847.0
120.0
181.0
253.0
20.3
_
-
-
80.0
98.4
30.7
-
-
-


6.0
8.9
1.7
-
-
-
-
-
-
-
-
-
1.2
1.7
-
9.8
14.8
2.9
63.6
90.1
55.1
-
-
•
S°X
-
_
-
.
-
-
-
-
-
-
-
-
-
-
-

-
-
-
_
_
-
_
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,750.0
2,150.0
1,270.0
-
-
-


-
-
-
2,140.0
2,380.0
227.0
200
269.5
17.2
416.0
508.0
76.7
_
_
-
-
-
-
650.0
921.0
129.0
-
-
-
CO HC F Pb
_
_ •
-
15.6
20.8
1.0
-
-
-
.
-
-
2.4
- 3.3 -
0.2

_
_
-
-
-
-
2,220.0 -
3,420.0 -
209.0 -
26.4
35.2
5.2
-
_
-
_
-
-
600.0 -
738.0 -
320.0 -
5,300.0 810.0 -
6,620.0 996.0 -
330.0 529.0 -
0.6
1.5
0.2


8.2
12.2
2.3
-
-
- - -
5.5
7.9
7.9
-
-
_
- "•"•T/ - -
n.a.1/ -
n.a.!' -
14.5
22.0
2.2
-
-
-
2.2 -
2.2 -
0.3 -
Associated Emission Control Level
(Percent)
Part
80
80
98
_
-
-
58
58
93
96
96
99.7
80
80
99.0

35
35
99.0
35
35
99.0
12
12
90
55
55
97
81
81
98
60
60
97
_
-
-
67
67
90
-
-
-


90
90
98
_
_
-
-
_
-
_
.
-
SO
80
99.0
48
48
96
46
46
67
_
-
-
SO, CO HC F Pb
-
- - _ • . ..
-
0
- 0
- 95
-
-
-
-
-
-
- 85
- 85
- 98

_
-
-
_
-
-
18
18
95
- 30
- 30
- 89
-
-
-
-
_
-
63 -
63 -
86 -
37 47 67 -
37 47 67 -
62 95 87 -
- 98
- - 98
- 99.8


- 90
- 90
- 98
25 ...
25 -
94 ...
32 96
32 ... 96
96 - - - 96
51 -
51 -
93 -
- n.a.-' -
n.a.-jV -
- n.a.^ -
48
- - 48
96
0
0 - - -
86 ...
18 -
18 -
90 -
Control Coats
(Ml U Inns of Dollars)
Investment Annual


15.4 12.3


40.8 11. A


13.1 5.3


110.0 29.6


6.6 3.1



416.0 153.0


27.4 11.0


317.3 108.2


981.0 507.0


73.0 30.3


10.6 14.5


1,080.0 0


162.0 7.1


32.1 10.0




223.3 75.8


87.0 42.0


16.2 7.1


4.7 2.2


1.9 1.3


61.9 21.8


176.0 40.8


0.8 1.0
—   The 298 metropolitan areas are defined in Appendix I.
    Emissions abbreviated are:  particulatea (Part),  sulfur oxides  (S0_).  carbon monoxide  (CO), hydrocarbons (HC). fluorides (F)
    in the table Indicate the emission levels meet the applicable regulation  (Appendix  II) or that emissions are neRllalble or do
 -   Estimates without Implementation of the Clean Air Act  are  shown.
-   Estimates with implementation of the Clean Air Act are shown.
-'  Not available.
and lead (Pb).  Blanlu
not exist.
                                                                        4-4

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                              III.  COSTS

     Control of emissions from stationary sources as indicated in this
study and shown in Table 4-3 will require a total estimated investment by
Fiscal Year 1976 of $6,510 million.  By that year, the associated total
annual control cost, including depreciation, operating and maintenance
costs5 will amount to an estimated $2,214 million.
     As noted in Table 4-3, an investment of $201 million and annual costs
of $113 million for control of solid waste disposal will reduce emissions
of particulates by 87.7 percent,  carbon monoxide by 92.4 percent, and hydro-
carbons by 85.5 percent of the level of these emissions that would otherwise
occur in Fiscal Year 1976.  From  the analyses reported in Appendix IV, it is
estimated that approximately 54 percent of these costs will be borne by
municipalities and the remaining  46 percent by private businesses and indi-
viduals .
     Table 4-3 further shows that control of stationary fuel combustion
sources will require a total investment of approximately $2,432 million by
Fiscal Year 1976 and annual costs in that year will be approximately $1,006
million.  As a result, it is estimated that particulate emissions will be
reduced by 75.9 percent and sulfur oxide emissions will be reduced by 67.5
percent below the levels of emissions that would otherwise prevail as a re-
sult  of fuel combustion in that year.  By far the greatest share of these
costs will be paid by manufacturers and electric utilities.
                                   4-5

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     TABLE 4-3.-  STATIONARY  SOURCES -  ESTIMATES OF POTENTIAL AND REDUCED EMISSION LEVELS AND ASSOCIATED COSTS

                                             [298 Metropolitan Areas]-
Source
Solid Waste Disposal


Stationary Fuel
Combustion
,

Industrial Processes


Total


Year
1967
FY 76 W/0-
FY 76 fcA
1967
FY 76 W/0
FY 76 W
1967
FY 76 W/0
FY 76 W
1967
FY 76 W/0
FY 76 W
21
Quantity of Emissions—
(Thousands of Tons per Year)
Part
1,110
1,500
185
3,247
3,867
930
4,601
6,053
453
8,958
11,420
1,568
sox
-
-
-
11,416
14,447
4,697
5,156
6,229
1,720
16,572
20,676
6,417
CO
3,770
5,450
414
mm
-
-
7,520
10,040
539
11,290
15,490
953
HC
1,400
2,020
293
mm
-
-
1,412
1,736-
849
2,812
3,756
1,142
F
-
-
-
mm
-
-
53
73
9
53
73
9
Pb
-
-
-
_
-
-
20
30
10
20
30
10
Control Costs
(Millions of Dollars)
Investment


201


2,432


3,877


6,510
Annual


113


1,006


1,095


2,214
—   Metropolitan areas are defined  in Appendix  I.
2/
—   Emission abbreviations are:  particulates  (Part), sulfur oxides  (SO  ),  carbon monoxide  (CO),
hydrocarbons. (HC), fluorides  (F), and lead  (Pb),  Blanks in the table  inaicate  the emission  levels meet the
applicable regulation  (Appendix  II)  or that emissions are negligible or do not  exist.
o /
—   Estimates without implementation of the Clean Air Act.
—   Estimates with implementation of the Clean  Air Act.

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     The group of manufacturing industries included under the industrial
process category of sources will be required to invest $3,877 million
and pay annual costs of $1,095 by Fiscal Year 1976 for control of emis-
sions from their process sources (see Table 4-3).   As a result, it is esti-
mated that emissions from these sources will be reduced from the levels
that would otherwise occur in that year by these percentages:  particulates,
92.5 percent; sulfur oxides, 72..4 percent; carbon monoxide, 94.6 percent;
hydrocarbons, 51.1 percent; fluoride, 87.7 percent; lead, 66.7 percent.
The annual control costs relative to capacity, production, and shipments
are shown in Table 4-4.
                                     4-7

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oo
                                TABLE 4-4,.- EXPECTED ANNUAL CONTROL COSTS RELATIVE TO CAPACITY,  PRODUCTION, AND SHIPMENTS OF  INDUSTRIAL  PROCESS SOURCES
                                                                     [Fiscal Year 1976;  298 Metropolitan Areas!
                                                                                                                                                        I/
Source Totals
Source ai:'l Unit of Measurement

Asphalt Batching tons of caving mixture^
Brick and Tile brick equivalents
Coal Cleaning
Cement
Elemental Phosphorus
Grain: Handling
Milling
Gray Iron Foundries tons of
Iron and Steel tons of
Kraft (Sulfate) Pulp
Lime
Petroleum Products and Storage
Petroleum Refineries
Phosphate Fertilizer
Primary Nonferrous
Metallurgy: Aluminum
Copper
Lead
Zinc
Rubber (Tires)
Secondary Nonferrous Metallurgy
Sulfuric Acid
Varnish
tons
barrels
tons
bushels-'
tons
castings-
raw steel
tons
tons
gallons^'
barrels
tons fj^.
fi/
tons^'
tons*/
tonsi/
tons^
tires
tons
tons
gallons
Capacity-
Millions
of Units)
694.0
8,060.0
177.0
462.0
0.4
4,430.0
70.6
22.0
219.0
33.3
19.9
159.0
4,480.0
15.6

2.7
6.5i/
l.fr^
0.7
282.0
3.0
47.2
28.0
Production-
Millions of
Units)
227.0
6,660.0
167.0
295.0
0.4
12,100.0
58.8
18.0
165.0
25.3
15.8
1,590.0
3,300.0
8.5

2.4
0.9
0.3
0.5
266.0
2.6
34.7
21.8
Value of
Shipments
(Billions
of Dollars)
1.6
0.2
0.8
0.9
0.1
N/A^7
4.8
3.5
17.4
3.7
0.3
19.5
18.6
1.8

1.1
0.8
0.1
0.3
4.6
1.8
0.3
0.1
Annual
Control
Cost
(Millions
of
Dollars)
12.3
11.6
5.3
29.6
3.1
153.0
11.0
108.2
507.0
30.2
14.5
0
7.1
10.0

75.8
42.0I/
7.1^
2.2^
1.3
21.8
40.8
1.0

Cost per Unit
of Annual Cap.
(Dollars per
Unit)
0.018
0.001
0.030
0.064
7.750
0.345
0.156
4.947
2.315
0.910
0.729
0
0.002
0.641

28.100
6.450
4.438
3.143
0.005
7.267
0.864
0.043
Cost Ratios
Cost per Unit
of Annual Prod.
(Dollars per
Unit)
0.055
0.002
0.032
0.100
7.750
0.013
0.187
6.039
3.073
1.200
0.918
0
0.002
1.176

31.500
46.600
23.600
4.400
0.005
8.385
1.176
0.055

Cost per Dollar
of Shipment
(Percent)
0.7
5.8
0.8
3.3
3.1
N/A^'
0.2
3.1
2.9
0.8
4.8
0
0.04
0.6

6.9
5.3
7.1
0.7
0.03
1.2
13.6
1.0
                  —  Estimated costs for controlling particulate, sulfur oxide, carbon monoxide, hydrocarbon, fluoride and lead emissions from  facilities expected to be
                      operating in fiscal year 1976.  The metropolitan areas are defined in Appendix I.
                  —  Capacity and production are in millions of units (tons, etc.) per year unless otherwise noted in footnotes.
                  —  Capacity is calculated assuming 1,000 operating hours per year.
                  4/
                  —  Capacity is in million bushels of storage space; production, million bushels of throughput.
                  —  Capacity is in billion gallons of gasoline storage space; production, billion gallons of gasoline handled.
                  —"Tons" applies to smelters.
                  —  Credit for Increased sulfuric acid production is not included.
                  —'  Not applicable.
                  —'  Tons  of ore concentrate are shown.

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                               Chapter 5
               Economic Impact of the Cost of Controlling
                    Emissions from Stationary Sources
                            I.  INTRODUCTION

     Analysis of the economic impact of control costs on stationary sources
starts with the required investment and annual costs required to control indi-
vidual sources and the direct individual burden relative to the financial
strength of each.  It then considers the effect of these costs on the
market for products and finally the aggregate impact on selected indus-
trial sectors and the national economy.
     The detailed cost analyses for industrial process sources, stationary
combustion sources, and solid waste disposal are shown in Appendix IV.
This chapter summarizes these analyses and discusses the general determi-
nants of economic impact in these categories.

            II.  GENERAL PARAMETERS AFFECTING ECONOMIC IMPACT

A.   Type of Source and Quantity of Emissions
     Combustion of fossil fuels is a major source of particulate and
sulfur oxide emissions, for which control costs will be substantial.  It
is difficult to estimate the economic impact of these costs on commercial
and institutional establishments because of their great diversity.  Com-
mercial enterprises that rent their quarters may be very reluctant to pay
increased rents to compensate property owners for control costs.  Thus,
the owners of older store and office buildings may have to absorb these
costs in order to keep tenants.  But, because it is older buildings that
are most probably heated by coal-fired boilers, for which control costs
will be highest, the effect may be to hasten the obsolescence of these
structures and resultant changes in use patterns.  Firms may move to
newer quarters and property may change hands, rather than have the
increased cost reflected in the prices charged by the firms-^ue  to  an in-
crease fn.-rentals of the older facilities.
                                  5-1

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     The impact on institutions such as schools and hospitals will tend
to be borne by taxpayers for publicly owned institutions, while private
owners may face reactions similar to the commercial patterns, but with
less flexibility of response alternatives.
     Industry uses substantial quantities of fossil fuels to product steam
for heat and power, thereby contributing significantly to pollutant emissions.
Fuel consumption in industrial boilers varies greatly from one industry to
another so the significance of this source of pollution for any particular
metropolitan area depends upon the mix of industrial plants present.  For
the firms involved, controlling emissions from this source will generally
require switching to a low sulfur fuel.  This may require an initial invest-
ment to convert the burner plus an increase in the annual cost of fuel.
Typically, such costs should require a change in business operations for the
firm and the costs will probably be passed on through the general pricing
formula.
     The impact of control costs on steam powered electric generating plants
will be much more substantial than for other fuel consumers.  They consume
very large quantities resulting in large pollutant emissions concentrated
in particular locations.  Control problems and associated costs are much
larger per plant, emission standards may be considerably more stringent,
and, in most instances, control cannot be accomplished by fuel switching
where supplies of low sulfur fuels are inadequate Csee Appendix V).
     At the other extreme, although residential heating plants are a signi-
ficant source of pollution, zero control costs are shown for this source
category because the trend of fuel use indicates that emissions in excess
of applicable standards will soon be negligible.  Coal furnaces are almost
never installed in new single-family and very seldom in new multifamily
dwellings.  Coal furnaces are being replaced with oil, gas, or electric
heating units as they wear out.  In residential heating, oil and gas
seldom produce significant emissions, since distillate oil and natural
gas are very clean fuels.  Air pollution controls will, therefore, have
no effect on residential property owners.
     For the industrial process sources covered in this report, control
costs and the impact of these costs vary greatly depending upon the technolo-
gical difficulty of controlling the source of pollution and the volumes of the
                                   5-2

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pollutants involved.  In some instances, adequate  control  can be  achieved
only through the use of equipment and materials  that are still  relatively
unproven and expensive, as in primary aluminum smelting.   In others,  the
controls are relatively simple and economical, such as  the use  of floating
roofs for petroleum storage tanks.
B.   Structure of Industry and Market
     The economic impact of control costs on individual firms depends not
only on the magnitude of the cost relative to the revenue  and profit of
the firm, but also on its competitive relationship with the other firms
in its industry and competing industries and the nature of the market
demand to which it sells.  An industry characterized by a  small number of
very large firms selling under conditions of oligopolistic competition
with price leadership, such as the steel industry, may be expected to shift
increased costs into price without loss of sales and revenues in most
instances.  On the other hand, an industry such as gray iron foundries,
in which there are many small firms engaging frequently in ruthless
competition for custom orders from large customer firms, will find that
price adjustments are very difficult to obtain.  The smaller and less
efficient firms that are least able to absorb increased costs may be
those least able to increase prices; marginal firms will almost certainly
be forced to close when required to introduce pollution controls that
necessitate investment and operating costs but do not increase production.
     Other industries include some older plants that are less efficient
and profitable than their newer competitors, as is the case in cement
production.  The effect of control costs may then be to hasten closing or
modernization of older plants to maintain the competitive position of the
firm in a market that will accept a price increase covering only part of
the increased cost.
     The production of varnish using a cooked resin component,  which is
the source of pollutant emissions in that instance, illustrates another
impact pattern.  As one minor component of the larger industry complex
encompassing all industrial and trade coatings, this type of varnish is
already being gradually phased out by most producers.  The impact of
control costs may be expected to hasten the decline in production of this
product as firms choose to discontinue the product rather  than incur any
control cost.
                                    5-3

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      The buyer  side of the product market also has an obvious influence  on
 the  ability  of  firms  to shift control costs.  For processes such as grain
 storage, the total cost is small relative to the user's ultimate product
 price.  In addition,  grain buyers have no effective alternative to the
 present system  of elevator storage and must pay whatever price is charged.
 Therefore, control cost for grain storage appears fully shiftable.
      One other  important market pattern is that of regulated industries.
 Steam electric  power  producers will be able to recover control costs only
 to the extent that regulatory agencies include these costs in the rate
 base and approve rate increases.  It may be assumed that regulatory agencies
 will do so,  but there will almost certainly be time lags between the
 incurrance of added costs and the introduction of new rates during which
 producers will have to absorb the costs in the form of reduced profits.

  III.  SPECIFIC IMPACT ON FIRMS  IN  EIGHTEEN  INDUSTRIAL  PROCESS SOURCES

      An analysis was  made for this study of the impact of control costs
 on the eighteen industry sources discussed in Chapter 4.  To the extent  that
 data were available,  the probable effects of control costs on the operation
 and  structure of both firms and the industry were estimated, as well as the
 probability  of price  changes and the market reaction to them.   These results
 are  summarized in this section with a fuller statement provided in Appen-
 dix  IV.
 A.    Asphalt Batching
      Over 80 percent of this industry are within the 298 metropolitan
 areas.  The  total annual control cost for these firms is estimated to
be $12.3 million, or about $15,357 per firm by FY 1976.   Prices will rise
 in most areas by the full amount of the cost of control, increasing prices
by $0.05 to  $0.06 per ton at the plant.  A few firms will find that most
 of their competitors are outside the control regions so that their prices
 cannot be increased significantly.  Firms in this position could experience
a 20-50 percent decrease in profits before taxes forcing them to probably
discontinue operations or move to a new location.  Some other firms, unable
 to finance the capital investment required for control,  may also be forced
 to discontinue operations at their present locations.
                                   5-4

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B.   Brick and Tile
     The brick and tile industry faces very stiff competition from other
building materials suppliers so that its share of the construction market
has been declining.  The projected FY 1976 annual control cost of $11.6
million for the firms in the 298 metropolitan areas equals approximately
$1.76 per thousand brick or brick equivalents making it probable that
a price increase of this magnitude would reduce sales significantly.
It is estimated that prices will rise by no more than $1.00 to $1.10 per
thousand, and that this will be accompanied by closing or merger of some
marginal firms, a lower growth rate for the industry as a whole than would
otherwise occur, and depressed earnings for most firms.
C.   Coal Cleaning
     The FY 1967 annual control cost for coal cleaning plants in the 298
metropolitan areas is estimated to be $5.3 million, or $0.03 per ton of
coal.  It is anticipated that this cost will be included in the price
with no resultant burden on profits or sales for the firms involved.
D.   Cement
     Cement plants built since 1960 have been designed to provide effective
control of pollutant emissions.  Older plants, which account for 76 percent
of the capacity of the industry, need additional control equipment to
improve their existing control systems or to build entirely new systems.
Thus, the impact of control costs on any firm will depend upon the number
of its plants in the 24 percent of the industry that is now fully controlled,
the 63 percent now partially controlled, or the 13 percent requiring new
control systems.  Annual control costs for typical plants in FY 1976 for the
most expensive group needing new control systems are estimated to be in the
range of $78,000 to $210,000 per plant, or $0.087 to $0.104 per barrel of
cement produced.  Because  the costs are spread unevenly throughout the firms
in the industry, and because it appears that the newer plants that are already
controlled are the more efficient producers, it is probable that prices in
most markets will increase little if at all.  The current trend of large and
highly efficient firms invading the market territories of older firms and
the growing competition of substitute products strengthens this probability.
As a result, the trend toward replacement of old plants may accelerate.  Some
reduction of the industry  growth rate and lower profit margins are also
anticipated.
                                    5-5

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E.   Elemental Phosphorus arid Phosphate Fertilizer
     All of  the firms producing elemental phosphorus have  plants  within the
298 metropolitan areas, but these account for less than half  the  phos-
phorus production in the U.S.  Annual control costs for the plants  in-
volved will  be approximately $3.1 million, or $7.80 per ton on  the  average.
It is estimated that the price effect resulting from this  cost  increase
will be a rise of less than one percent, or approximately  $3.90 per ton,
reflecting the fact that only part of the production of each  of the seven
firms in the market would be affected under the proposed regulations.   A
price increase of this magnitude would probably not affect the sale of
elemental phosphorus or phosphoric acid for industrial use significantly.
     The firms producing elemental phosphorus are among those producing
phosphate fertilizer and also selling phosphoric acid to other fertilizer
manufacturers.  It was not possible in this study to determine the  impact
of control costs applicable to the production of elemental phosphorus
within the framework of revenues and profits from the multiple product
operations of the firms.  Control costs for fertilizer production were
similarly blended into overall cost and revenue in such a way as to make
analysis of  the impact on profits impossible without more detailed data
than were available at this time.
     Annual  control cost for all producers of phosphate fertilizer with-
in the 298 metropolitan regions, estimated at $6.91 million for Fiscal
Year 1976, varies depending upon the type of fertilizer produced.   The
average cost amounts to approximately $1.70 per ton of fertilizer produced,
approximately the control cost per ton for production of normal superphosphate.
Control cost for production of ammonium phosphate is estimated to be approxi-
mately half  the average annual cost, the control cost for triple super-
phosphate being slightly above the average.   It appears that these costs
will be entirely incorporated into price,  since demand has a very low price
elasticity.  The impact of these price increases can be evaluated in
relation to the cost of nutrients delivered on the farm.   Because of the
control costs, the delivered price of the P205 equivalent in normal or triple
superphosphate may be expected to increase in about the same proportion as  the
average fertilizer production costs.  This would maintain the value advan-
tage already established for triple superphosphate due  to  lower
                                     5-6

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transportation cost in most locations.  The projected price  increase for
ammonium phosphate is approximately half that of other phosphate fertilizers,
giving it an added price advantage.  If the average price of phosphate
fertilizer increases by $0.70 to $1.00 per ton, it is expected that the
trend toward reduction of production of normal superphosphate in favor of
the two other fertilizer forms considered will be accelerated.  As a result,
some smaller producers making only normal superphosphate may be forced to
discontinue production.
F.   Grain Milling and Handling
     This analysis was limited to grain elevators and grain mills producing
animal feeds, since other types of milling were reported to be well controlled.
Control of particulate emissions projected for storage, transfer, and milling
of grain was found to require an annual cost by FY 1976 of $164 million,  of
which $153 million would be for controls on grain elevators and $11 million
for controls on feed mills.  The impact of these costs can only be approxi-
mated due to the complexity of the industry structure.
     Of the 4,098 grain elevators in the 298 metropolitan areas, 71
percent have a capacity of less than 500,000 bushels; most of these are
probably country elevators for temporary storage of grain.  The remainder
are primarily larger terminal elevators, many of them connected to mills  of
various types.  There were also 2,155 feed mills covered in this study.
Some of these are operated in conjunction with country elevators and some
with terminal elevators.  Further complexity is added by the fact that some
feed mill operations are part of very large grain-processing firms making
many products and also operating many grain elevators.  Many smaller firms
operate grain elevators with some of these also including feed mills in their
operations.
     Lacking detailed data on many of the firms and facilities involved,
it was possible only to estimate the probable overall impact of control
costs.  This indicates that annual control costs for country elevators
would be just under $10,000 per year on the average, with $78,000 per year
for terminal elevators and $4,000 per year for feed mills.  These costs will
probably be shifted entirely into price amounting to an increase of $0.0127
per bushel of grain stored and $0.187 per ton of feed milled.
                                  5-7

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G.   Gray Iron Foundries
     The annual cost of control for the 1,115 foundries within the  298
metropolitan  areas, representing 77 percent of the industry, is
estimated to  be $108.2 million for Fiscal Year 1976.  Cost will vary sub-
stantially depending on the size of the plant, ranging from 0.7 percent of
the cost of castings for large foundries to approximately 3 percent in small
single cupola foundries.  Net income before taxes for these firms averages
6.8 percent for the large foundries and 5.8 percent for small ones.
     With low rates of return normal for the industry, it would appear
that as much  as possible of the added cost of controls would be shifted
to the customers through price increases,  Demand for castings is relatively
insensitive to price increases since castings make only a small contribution
to the cost of producing machinery and other products of the customer indus-
tries.  Foundries find it very difficult to increase price, however, since
this is a market in which many relatively small firms compete strongly
for custom orders from a much smaller number of large customers.   Ruthless
competition among sellers plus the greater financial and market strength
of buyers maintain strong pressures to hold prices down.  As a result,  prices
are expected  to rise only approximately two percent on the average, causing
reduced profits for approximately one-third of the firms in the industry.
The smaller and less efficient firms may therefore be expected to close or
to merge with others to form more efficient larger production units.
H.   Iron and Steel
     The steel industry is usually described as an oligopoly characterized
by administered prices and price leadership.  In such an industry the added
costs of air pollution control will probably be passed on to consumers
through price increases whenever the industry decides to adjust its price
structure in response to the overall cost and market pattern.  Since general
economic expansion,  accompanied by some inflation, is anticipated through
Fiscal Year 1976,  and since the steel industry has reached agreement with
foreign producers to limit imports of steel into this country to a signi-
ficant degree, it is expected that steel prices will rise by the full amount
of control costs,  with the lowest control cost per ton of steel produced
found in the use of  electric arc furnaces, the highest for open hearth
furnaces,  and intermediate for basic oxygen furnaces.  Examination of

                                   5-8

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typical mixes of production equipment representative of the industry
indicates that this range of cost will be from $0.37 to $1.91 per ton of
finished steel produced.
I.   Kraft (Sulfate) Pulp
     The kraft paper industry has tended in recent years to follow a cycle
of approximately five years duration during which prices, revenues, and
profits have fluctuated in response to uneven investment.  Demand growth
has been anticipated by heavy investment, leading to temporary overcapa-
city, low prices, and low profits.  As demand has caught up to productive
capacity, prices and profits have risen, leading to improved expectations
and repeated overinvestment.  The industry is currently in the rising
phase of this cycle which should persist into 1972.  This period of ex-
panding investment should include much of the required investment in
control equipment.  By FY 1976 it is expected that annual control cost will
be $30.3 million for the aggregate industry with nearly all of this being
incorporated in the price structure.
     By FY 1976, almost all pulp production will be by integrated firms rather
than independent pulp producers.  This is the direction in which the industry
has been moving and it will probably be accelerated by the requirement of
pollution controls that will make independent production less  viable economically.
J.   Lime
     The cost of controlling emissions from lime kilns in the 298
metropolitan areas will be approximately $14.5 million per year by FY 1976.
Analysis of typical firms of various sizes indicates that cost will range
from $0.15 to $0.60 per ton of lime produced, with costs being somewhat higher
per ton of production for small firms than for large ones, and higher for
operators of rotary kilns than for vertical kilns.
     This is a highly competitive industry, eomplicated by the fact that a
significant fraction of industrial customers have bought or constructed lime
production facilities.  Despite a steadily rising demand for open market lime,
competition among producers, plus the fact that some plants will be outside
control areas, is expected to prevent a general price rise for lime.  Since
the costs involved are relatively small, cost absorption by the producers
is not expected to have serious adverse effects, although some very small
plants may be closed.
                                  5-9

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K.   Petroleum Refining and Storage
     Bulk storage facilities for petroleum products are almost entirely
owned by petroleum refining companies so that this analysis of the impact
of control costs for both storage and refining is treated as one.  The
economic impact on these firms will be primarily from the required invest-
ment of $162 million for control of refinery processes and $1,082 million
to control storage tanks.  The recovery of products should completely
offset the annual costs for storage facilities and partially offset annual
costs for refineries, with the result that net annual control costs will
amount to $7.1 million per year by Fiscal Year 1976.   If this cost were
applied entirely to gasoline production, it would be approximately $0.0021
per barrel, small enough to have no appreciable effect on the firms or the
market.  The indicated required investment, while large, appears to be
within the capacity of the industry, but may require some firms to modify
their investment plans.
L.   Primary and Secondary Nonferrous Metallurgy
     The company and market structures for production and sales of primary
and secondary aluminum, copper, lead, and zinc are so closely interrelated
that analysis of the impact of air pollution control costs has been made
of the composite industrial complex.  Until recently primary aluminum
production was carried on by firms producing only that metal, but in the
last few years a trend toward integration into a primary nonferrous metals
production sector has appeared.  The numerous substitution possibilities
among these metals for various uses, and between primary and secondary
production, make it necessary to consider the markets for all four
simultaneously; price impacts are separately estimated as are the effects
on firms to the extent possible.
     Production of each of the four primary metals is dominated by three
or four large firms, with a few smaller firms in competition.  All of the
firms involved are stable and generally profitable, resulting in consi~
derable effective competition.  The secondary industry, in contrast, is
composed of many firms, more than half of which are small firms with fewer
than 20 employees.  Primary producers have substantial market power,
generally well-balanced by the strength of large firms that make up most of
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the market demands.  Secondary producers, however, have relatively much
less ability to control the market; their prices and production are
generally determined by the primary market.
     Annual control costs for primary aluminum production varies according
to the process employed.  Average annual cost is estimated to be $0.013 per
pound produced with the prebaked process, $0.016 per pound for the horizontal
spike soderberg process, and $0.011 per pound for the vertical spike
soderberg process.  It is probable that considerable amounts of alumina
and  cryolite may be recovered by the required control equipment from pre-
baked and vertical spike soderberg operations, but not from horizontal
spike soderberg operations.  This could result in net annual costs for
the  first two of less than half that required for control of horizontal
spike soderberg operations.  Such a cost differential could significantly
reduce the profits of a firm primarily dependent on use of the horizontal
spike soderberg process.  The competitive nature of this market is such
that prices may be expected to rise in response to initiation of control
expenses, but only sufficiently to cover the cost affecting a major
share of the firms and output.
     Producers of secondary aluminum will experience annual control costs
of approximately $0.0032 per pound in the typical plant.  It is probable
that secondary aluminum producers will have to absorb much of this control
cost if the primary price does not increase enough to allow the secondary
price to rise.  If this occurs, some of the marginal secondary producers
may  not be able to continue.
     Analysis of primary and secondary producers of copper, lead, and zinc
shows a somewhat similar pattern.  Since the control method for primary
smelters includes operation of contact acid plants to remove sulfur oxides,
sulfuric acid is produced as a salable byproduct.  Net annual control cost
for  primary smelters depends in part on the revenue realized from the sale
of acid.  Some firms already operate acid plants in conjunction witK smelters,
the  acid from these sources being sold for approximately $14 per ton.  To
the  extent that this is now being done, it presumably is a profitable
operation.  It may be presumed, however, that smelters now being operated
without acid plants to utilize the available sulfur oxides do not do so
because the firms involved have determined that acid could not be profitably
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produced.  This may be either because the distance to a potential market
is too great or because it is felt that market demand is not sufficient
to absorb large additional quantities without sharp price reductions.
Therefore, acid produced as a byproduct of air pollution control probably
can be sold only at a price much below the present market and may not be
marketable at all.
     Annual control costs for a typical copper smelting plant already operating
an acid  plant would be approximately $1,370,000 or $0.0095 per pound of
copper produced.  If an acid plant is added where none is now in operation,
and  the  acid sold at the present market price, annual costs would increase
to   $4,500,000 per year, less revenue of $2,500,000, and a net cost of
$0.012 per pound of copper produced.  Actual net annual costs will probably
be somewhat higher.
     Since an acid plant alone provides adequate control of emissions from
a lead or zinc smelter, those firms now operating acid plants need incur
no additional control cost.  Addition of an acid plant to a lead or zinc
smelter  would result typically in an annual control cost of $2,500,000,
with an  equal amount of byproduct revenue if the acid were salable at
$14 per  ton.
     Analysis of control of secondary copper, lead, and zinc plants
indicates that annual control costs will be $0.0037 per pound for copper,
$0.0019  per pound for lead, and $0.0031 per pound for zinc.
     Despite the significant increased costs that may result from installations
of air pollution controls, the current market for copper, lead, and zinc
does not indicate an equivalent price increase over the next several years.
Intense foreign competition, the uneven impact of controls on domestic
producers, and probable overcapacity argue against a general rise in the
price of any of these metals.  Discontinuance of the use of lead as an
additive for gasoline would appear likely to cause a price decline for  that
metal, in fact.   It is probable, therefore, that, as in aluminum, some
small and marginal secondary producers of copper, lead, and zinc may be
adversely affected by control -costs.  Secondary lead producers may be
particularly hard hit with little growth predicted after 1971 for primary
lead producers.
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M.   Rubber
     Air pollution controls to prevent emissions of carbon black during
automobile tire manufacture are specified in  this analysis.  However, the
value of carbon black recovered more than offsets the annual control cost,
leaving no net annual cost for this process.  A very small additional
cost, equal to approximately $0.005 per  tire, will be required for after-
burners to control hydrocarbon emissions.
N.   Sulfuric Acid
     The impact of air pollution  control costs and the supply of sulfur
and sulfur products associated with them is the subject of a separate
study now under way.  This study  should  result in an analysis which
covers  the sulfuric acid  industry, among others, in great detail; there-
fore, no impact analysis  of this  industry was made for this study.
0.   Varnish
     Control  of emissions from varnish cookers, the only portion of the
industry emitting  significant amounts of pollutants, will require annual
costs equal to approximately $0.10 per gallon of varnish produced.
Analysis of the impact of this control cost on the market and on pro*-
ducing  firms  was hampered by the  fact that virtually no data were available
for varnish as a separate product distinguished from other industrial and
trade coatings.  It was determined, however,  that production of varnish
produced from cooked resins is rapidly declining.  Synthetic varnishes
apparently are taking over this market.  It seems probable, therefore,
that  the primary effect of control costs will be to accelerate the decline
in production of this product.

                  IV.   CONTROL  OF FOSSIL  FUEL  COMBUSTION

      Special technical  economic  problems have been revealed by the
 analysis  of stationary  fuel  combustion pollution  sources.  Superficially,
 the most  obvious  control technique would appear  to be  regulations requiring
 the use of low sulfur fuels  to prevent the emission  of  sulfur oxides.
 It is increasingly apparent,  however,  that supplies  of  natural gas cannot
 be increased  sufficiently to meet all the demands of  fuel users who would
 prefer  this  fuel.   Fuel oil  supplies,  also,  are  unlikely  to be adequate
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 for  projected demands.  Rapidly increasing demands for gasoline and  jet
 fuel compete sharply with distillate fuel oil, pushing refineries  to produce
 maximum quantities of these various light fractions of petroleum.  As a
 result, production of residual fuel oil is not increasing as rapidly as
 otherwise would be expected.  Yet, the very rapid growth in demand for
 electricity is resulting in increased generating capacity, much of which
 would be designed to consume residual fuel oil if this fuel were available
 in assured supply.  Imports of residual fuel oil are restricted under
 the  oil quota system making increased supply from this source,  in amounts
 perhaps doubling present imports,  unlikely.   Even unlimited imports would
 ease the shortage only if low-sulfur oil were available whereas many
 foreign crude oils have very high sulfur content. 'A switch to  low-sulfur
 fuels probably cannot, therefore,  be accomplished by substituting natural
 gas  and low-sulfur residual oil for current  consumption of high-sulfur
 oil  or coal.  Finally, supplies of coal are  potentially very large, but much
 of this has a sulfur content in excess of the one percent content generally
 applied as the standard acceptable for sulfur oxide emissions.
      It appears, therefore, that controls must be based on some combination
 of consumption of low-sulfur fuels, desulfurization of fuels, and
 installation of mechanical devices to remove sulfur oxides from flue gases.
 An extended analysis of this problem is given in Appendix V.

                   V.  AGGREGATE IMPACT ON THE ECONOMY

     Two types of aggregate economic impact  were examined in this  study.   The
 automobile and construction industries were  identified as being industries
purchasing many of the products of the industries to which air  pollution
 controls will be applied.   An analysis was made, therefore, of  the cumulative
effect of price increases  resulting from control costs on the cost of
producing automobiles and  private construction.   The other measure of
aggregate impact used was  the estimated change in the level of  prices
resulting from the specific price increases  estimated for each  subject
industry.   The change in the general price level was measured by the
implicit GNP deflator since this appeared to be the most appropriate
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index for the purpose.  Input-output analysis was used  for both sets of
estimates and a detailed explanation of the methodology and results of
these studies is given in Appendix VI.
     It is estimated that the cumulative impact of control costs affecting
inputs to the construction industry will be approximately $600 million
per year, resulting in a cost increase of 0.6 percent.  The cumulative
impact on the automobile industry, exclusive of direct  cost increases
resulting from controls on automobile exhaust emissions, is estimated
at $225 million per year, or $22.50 per car produced if 10 million vehicles
were manufactured.
     The overall impact of price changes resulting from controls is
estimated to increase the price level by 0.14 percent.

                             VI.  CONCLUSIONS

A.   General Economic Impact of Air Pollution Control
     The foregoing analyses indicate that control of air pollution
emissions from solid waste disposal, stationary fuel combustion, and
industrial processes will require an investment of approximately
$6.510 billion to control the capacity estimated to be  in existence
in the 298 metropolitan areas in Fiscal Year 1976.  This estimate
is based on projected industrial and population growth, which will sub-
 stantially  increase  the  sources of pollution and required investment
 in  control  equipment over  that  required for 1967.  The  total estimated
 annual  cost  of  these controls,  including depreciation,  finance, and
 operating expenses,  would  then  amount to approximately  $2.214 billion
 per  year by  Fiscal Year  1976.
      These  figures are large in absolute amounts; however, their signi-
 ficance  can be  shown more  clearly by comparing  them with the related
 figures  for  the  national economy.  The $ 6.510 billion investment in
 air  pollution control equipment is less than 5  percent  of the $126
billion  of gross private investment in the United States for the year
 1968.  Similarly, if the gross national product  (GNP) of the United.
 States in Fiscal Year 1976 is $1.2 trillion, the annual cost of $2.214
billion  in  that year will be less than 0.2 percent of the nation's gross
output.
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      The investment  requirements  and  annual  costs  estimated are for
 controls that would  substantially reduce air pollution  emissions in
 the United States.   The  effects of the  controls  on emissions are
 summarized in Table  5-1.
      Analysis of the economic  impact  of projected  requirements  for
 air pollution control was  concentrated  on eighteen industrial process
 sources and only an  analysis of direct  costs and emission reductions
 was made for solid waste disposal and stationary fuel combustion.   Some
 indication of the economic significance of the projected costs  in  the
 latter two sectors has become  apparent, however.
   TABLE 5-1.  - ESTIMATED EMISSIONS FROM ALL  STATIONARY  SOURCES,  FY1976
                         [298 Metropolitan Areas]

Estimated Emissions with
1967 Control Levels
(thousands of tons)
Emissions in Compliance
with Assumed Standards
(thousands of tons)
Reduction of Pollutants
(thousands of tons)
Percentage Reduction
Emissions
Part.
11,420
1,568
9,852
86.2
sox
20,676
6,417
14,259
68.9
CO
15,490
953
14,537
93.8
HC
3.756
1,142
2,614
69.6
F
73
9
64
87.7
Pb
30
10
20
66.7
B.   Solid Waste Disposal
     Solid waste disposal in the 298 metropolitan areas will require
an estimated total investment of $201 million by Fiscal Year 1976 and
an annual cost that will amount to $113 million.  Approximately 46
percent of these amounts will be borne by private individuals and
businesses and 54 percent by municipal government.  The costs borne
by the municipal government may be passed on to the population within
the 298 metropolitan areas or just to those people residing in an area
where solid waste collection is being municipally provided.  The range
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of possible per  capita  costs  can be illustrated as  follows:
      •   If the municipal  costs were  shared  equally by the  186
          million people  estimated  in  the  298 metropolitan areas
          in Fiscal Year  1976,  the  per capita burden would be
          $0.58  for investment  and  $0.33 per  year for annual costs.
          Both of these costs would presumably  be financed out
          of local government taxes.
      •   Since  only  39 percent  of  municipally  collected waste is
          disposed of by  methods requiring new  or additional air
          pollution control,  it  might  be postulated  that only
          39 percent  of the population of  these areas would  have
          to pay the  added  costs.   Using this assumption, the per
          capita costs  would be  $1.49  for  investment and $0.84
          per year for  annual costs.
C.  jtationary Fuel Combustion
     The investment requirements and annual costs of air pollution
control of heat and power production in commercial,  institutional,
and industrial establishments will be broadly spread throughout
the economy.  More than $1 billion of investment may be required
of these firms and institutions by Fiscal Year 1976  and annual
costs will be approximately $580 million by that year.  These
costs will be shared by approximately 1.2 million sources.  The
amount required of each establishment will depend upon its  size
and its need for steam  for  its operating processes.   Without
detailed knowledge of these factors, it is not possible to
estimate the economic impact of  the projected control requirements.
     Steam-electric power plants will have investment requirements
and annual costs almost equal to the other stationary combustion
sources combined.  When these costs are worked into  the rate  base
structure of the industry,  it is estimated that they will provide
justification for an increase of approximately 2 percent in the
average price of electricity.  This cost will be diffused into
the entire economy, making  a small marginal contribution to many
other cost patterns.
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D.   Industrial Processes
     Analysis of the Impact of annual control costs on the industries
affected indicates that:
      •   Firms in seven of the 17 industries studied will be
          able to pass these added costs on to their customers
          in the form of higher prices.   These are the asphalt
          batching, coal cleaning, elemental phosphorus, phos-
          phate fertilizer, grain milling and handling, iron and
          steel, and kraft (sulfate)  pulp industries.
      •   Firms in three industries are  expected to recover
          sufficient quantities of valuable materials in con-
          trolling emissions to offset the entire annual cost
          of control.  This is the case  for petroleum refining,
          petroleum storage, and rubber  (tires).   Some primary
          aluminum producers also fall into this category although
          the rest of the nonferrous  metallurgical industry does
          not.
       •  Firms in the other seven industries will probably have
          to absorb all or part of the control costs, which will
          reduce their revenue from sales, taxes paid, and net
          profits.  In four of these  industries—cement, secondary
          nonferrous metallurgy, varnish, and gray iron foundries—
          firms may find that less than  half of their annual control
          costs can be recovered by increasing prices.  The brick
          and tile, lime, and primary nonferrous metallurgical
          industries will recover a larger share of control cost,
          but probably not the entire amount.
      •   Those prices that are increased will not rise by more
          than approximately 2 1/2 percent as a result of air
          pollution control costs. Those increases which may
          exceed 2 percent are for brick and tile, elemental
          phosphorus, gray iron, and  primary zinc.
       •  Increases in the cost of materials used by the auto-
          mobile and construction industries, which use many of
          the products included in this  study, may lead to an
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increase in the price of an automobile of about $22.50 and
in the cost of a new home of about $100, assuming 25
percent of the construction costs are for new housing
units.
The aggregate effect of price increases induced by
air pollution control costs will increase the national
price level by approximately 0.14 percent.
A number of marginal firms may be forced to close or
to enter different product lines.  This effect will
apparently be confined primarily to the secondary non-
ferrous metallurgical, varnish, and gray iron industries.
Some brick and tile and cement plants may become sub-
marginal, also.
No appreciable effect is predicted for the general
level of employment or for employment in specific occupations,
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                     APPENDIX I



Selection of 298 Metropolitan Areas

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                               APPENDIX  I
                   Selection of 298 Metropolitan Areas
     The Clean Air Act, as amended, specified  a plan for  control of
air pollution on a regional basis.  In brief,  after the U. S. Government
has issued air quality criteria and a report on control techniques for
a specific type of air pollutant,  State  governments are expected to
adopt and implement air quality standards  for  that pollutant applicable
to the air quality control regions (AQCR's) designated.
     Estimates of cost are presented for stationary source controls
in 298 metropolitan areas arbitrarily selected as regions.  The 298
metropolitan areas reflect the anticipated number of AQCR's for the
5-year period covered by this report.  All standard metropolitan
statistical areas  (SMSA's) are included  as a part of a region.  Two
or more adjacent SMSA's appearing  to have  a mutual problem were com-
bined into one region.  Non-SMSA based regions were centered upon
a community of 25,000 population,  contiguous communities  showing a
common problem, communities containing known major point  sources, or
central communities within a large air shed.   Selection and compi-
lation of these regions does not necessarily imply intentions on the
part of  APCO to designate or not  to designate them as AQCR's.  Table
1-1 was compiled on  the basis of information available as of June 1, 1970.
Information pertaining to the designation  of AQCR's after that date
has not been considered in this report.
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                TABLE 1-1.- LIST OF  298 METROPOLITAN AREAS
 1.   Aberdeen (S. Dak.)
 2.   Aberdeen-Hoquiam  (Wash.)
 3.   Abilene (Tex.)
 4.   Alamogordo  (N. Hex.)
 5.   Alamosa (Colo.)
 6.   Albany (Ga.)
 7.   Albany-Schnectady-Troy-Amsterdam  (N.Y.)
 8.   Albuquerque  (N. Hex.)
 9.   Allentown-Easton-Phillipsburg  (N. J., Penn.)
10.   Atnarillo (Tex.)
11.   Anchorage (Alaska)
12.   Ann Arbor-Jackson  (Mich.)
13.   Asheville (N. C.)
14.   Astoria (Oreg.)
15.   Athens (Ga.)
16.   Atlanta (Ga.)
17.   Atlantic City-Southeast New Jersey  (N. J.)
18.   Augusta-Aiken (Ga., S. C.)
19.   Augusta-Waterville-Skowhegan (Maine)
20.   Austin (Tex.)
21.   Bakersfield  (Calif.)
22.   Baltimore (Md.)
23.   Bangor (Maine)
24.   Bay City-Saginaw-Midland  (Mich.)
25.   Bellingham  (Wash.)
26.   Berlin-Rumford (N.H., Maine)
27.   Big Spring  (Tex.)
28.   Billings (Mont.)
29.   Binghamton  (N. Y., Penn.)
30.   Birmingham  (Ala.)
31.   Bismark-Mandan (N. Dak.)
32.   Bloomington  (Ind.)
33.   Bloomington  (111.)
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           TABLE 1-1. - LIST OF 298 METROPOLITAN AREAS (continued)
34.   Bluefield-Princeton  (W. Va.)
35.   Blytheville (Ark., Mo., Tenn.)
36.   Boise (Idaho)
37.   Boston (Mass.)
38.   Bowling Green  (Ky.)
39.   Bozeman (Mont.)
40.   Bristol-Johnson City-Kingsport  CTenn., W. Va.)
41.   Brunswick (Ga.)
42.   Bryan (Tex.)
43.   Butte-Anaconda (Mont.)
44.   Cape Girardeau-Caruthersville  (Mo.)
45.   Carbondale-Marion-Harrisburg  (111.)
46.   Casper (Wyo.)
47.   Cedar Rapids-Iowa City  (Iowa)
48.   Champaign-Urban-Danville  (111.)
49.   Champlain Valley (N. Y., Vt.)
50.   Charleston  (S. C.)
51.   Charleston  (W. Va.)
52.   Charleston-Matton (111.)
53.   Charlotte (N. C., S. C.)
54.   Charlottesville (Va.)
55.   Chattanooga (Ga., Tenn.)
56.   Cheyenne (Wyo.)
57.   Chicago (111., Ind.)
58.   Chico-Oroville (Calif.)
59.   Cincinnati  (Ind., Ky., Ohio)
60.   Clarksburg-Fairmont-Morgantown  (W. Va.)
61.   Cleveland (Ohio)
62.   Clovis (N.  Mex.)
63.   Colorado Springs (Colo.)
64.   Columbia (S. C.)
65.   Columbia-Jefferson City (Mo.)
66.   Columbus-Newark (Ohio)
67.   Columbus-Phoenix City (Ala., Ga.)
68.   Corpus Christi (Tex.)

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             TABLE  1-1.  - LIST OF 298 METROPOLITAN AREAS (continued)
 69.    Cumberland-Keyser (Md.,  W.  Va.)
 70.    Dallas-Fort  Worth (Tex.)
 71.    Dayton (Ohio)
 72.    Davenport-Rock Island-Moline (111.,  Iowa)
 73.    Danville  (N. C.,  Va.)
 74.    Decatur  (111.)
 75.    Denver (Colo.)
 76.    Des Moines-Ames  (Iowa)
 77.    Detroit-Port Huron (Mich.)
 78.    Dothan (Ala.)
 79.    Douglas-Lordsburg (Ariz., N. Mex.)
 80.    Dover  (Del.)
 81.    Dubuque  (111.,  Iowa, Wis.)
 82.    Duluth-Superior  (Minn.,  Wis.)
 83.    Eau Claire  (Wis.)
 84.    El Centro-Brawley (Calif.)
 85.    El Dorado (Ark.,  La.)
 86.    Elmira-Corning-Ithaca  (N. Y.)
 87.    El Paso  (N. Mex., Tex.)
 88.    Enid (Okla.)
 89.    Eureka (Calif.)
 90.    Evansville-Owensboro-Henderson  (Ind.,  Ky.)
 91.    Fairbanks (Alaska)
 92.    Fargo-Moorhead  (Minn., N. Dak.)
 93.    Fayetteville (N.  C.)
 94.    Flagstaff (Ariz.)
 95.    Flint  (Mich.)
 96.    Florence-Corinth  (Ala.,  Miss., Tenn.)
 97.    Florence (S. C.)
 98.    Fort Collins (Colo.)
 99.    Fort Dodge (Iowa)
100.    Fort Myers (Fla.)
101.    Fort Pierce-Vero  Beach (Fla.)
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            TABLE 1-1. - LIST OF  298 METROPOLITAN AREAS (continued)
102.    Fort Smith-Muskogee  (Ark., Okla.)
103.    Fort Wayne (Ind.)
104.    Four Corners (Ariz., Colo., N. Mex.,  Utah)
105.    Fresno (Calif.)
106.    Gadsden-Anniston  (Ala.)
107.    Gainesville (Fla.)
108.    Gainesville (Ga.)
109.    Galesburg (111.)
110.    Grand Fork (Minn., N. Dak.)
111.    Grand Island (Nebr.)
112.    Grand Junction  (colo.)
113.    Grand Rapids-Muskegon (Mich.)
114.    Grants Pass-Medford  (Oreg.)
115.    Great Falls (Mont.)
116.    Green Bay-Fond  du Lac (Wis.)
117.    Greenville (Miss.)
118.    Greenville-Spartanburg-Anderson  (S. C.)
119.    Hagerstown (Md.,  Penn., W. Va.)
120.    Harrisburg-Lebanon  (Penn.)
121.    Hartford-Springfield-New Haven  (Conn., Mass.)
122.    All of Hawaii  (Hawaii)
123.    Helena (Mont.)
124.    Hennepin-Ottawa (111.)
125.    Hot Springs (Ark.)
126.    Houlton-Caribou (Maine)
127.    Houston-Galveston (Tex.)
128.    Huntington-Ashland-Portsmouth  (Ky., Ohio, W. Va.)
129.    Huntsville (Ala.)
130.    Hutchinson (Kans.)
131.    Indianapolis (Ind.)
132.    Jackson  (Miss.)
133.    Jackson  (Tenn.)
134.    Jacksonville (Fla.)
135.    Jamestown (N.  Y.)
136.    Johnstown-Altoona (Penn.)
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            TABLE  1-1. -  LIST  OF 298 METROPOLITAN AREAS (continued)
137.   Joplin-N. E. Okla.-Fayetteville (Ark., Kans., Mo., Okla.)
138.   Kalamazoo-Battle  Creek (Mich..)
139.   Kalispell-Flathead  Lake (Mont.)
140.   Kankakee  (111.)
141.   Kansas  City  (Kans., Mo.)
142.   Keokuk  (111.,  Iowa, Mo.)
143.   Klamath Falls  (Oreg.)
144.   Kokomo-Marion  (Ind.)
145.   Knoxville  (Tenn.)
146.   La Crosse-Winona  (Minn., Wise.)
147.   LaFayette  (Ind.)
148.   Lancaster  (Penn.)
149-   Lansing (Mich.)
150.   Laredo-Eagle Pass  (Tex.)
151.   Las Vegas-Kingman  (Ariz.,  Nev.)
152.   Laurel-Hattiesburg  (Miss.)
153.   Lawrence-Lowell-Manchester  (Mass.,  N.  H.)
154.   Lawton  (Okla.)
155.   Lewiston-Moscow-Clarkston  (Idaho, Wash.)
156.   Lexington  (Kys)
157.   Lima-Findlay (Ohio)
158.   Lincoln (Nebr.)
159.   Little  Rock  (Ark.)
160.   Logan (Utah)
161.   Los Angeles  (Calif.)
162.   Louisville (Ind., Ky.)
163.   Lower Rio Grande Valley  (Tex.)
164.   Lubbock (Tex.)
165.   Lufkin-Nacogdoches  (Tex.)
166.   Lynchburg  (Va.)
167.   Macon (Ga.)
168.   Madison (Wis.)
169.   Mamitowoc-Sheboygan (Wis.)
170.   Mankato-New Ulm (Minn.)

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            TABLE 1-1 - LIST OF 298 METROPOLITAN AREAS (continued)
171.   Mansfield (Ohio)
172.   Marion (Ohio)
173.   Mason City  (Iowa)
174.   Memphis (Ark., Miss., Tenn.)
175.   Menominee-Escanaba-Marinette  (Mich.,  Wis.)
176.   Meridian  (Miss.)
177.   Miama (Fla.)
178.   Midland-Odessa  (Tex.)
179.   Milwaukee (Wis.)
180.   Minot (N. Dak.)
181.   Minneapolis-St. Paul  (Minn.)
182.   Missoula  (Mont.)
183.   Mobile-Pennsacola-Biloxi-Gulfport  (Ala.,  Fla.,  La., Miss.)
184.   Modesto-Merced  (Calif.)
185.   Montgomery  (Ala.)
186.   Montpelier-Barre  (Vt.)
187.   Muncie-Anderson  (Ind.)
188.   Nashville (Tenn.)
189.   Natchez (La., Miss.)
190.   National Capital Area  (D. C., Md., Va.)
191.   Newburgh-Poughkeepsie-Kingston  (N. Y.)
192.   New London  (Conn.)
193.   New York-New Jersey-Connecticut  (Conn., N. J.,  N. Y.)
194.   Niagara Frontier  (N. Y.)
195.   Norfolk-Elizabeth City  (N. C., Vir.)
196.   Northeast Louisiana-Vicksburg  (La., Miss.)
197.   Oklahoma City  (Okla.)
198.   Omaha (Iowa, Nebr.)
199.   Orlando (Fla.)
200.   Ottumwa (Iowa)
201.   Paducah-Metropolis-Cairo  (111.,  Ky.)
202.   Parkersburg-Marietta  (Ohio, W. Va.)
203.   Pendleton (Oreg.)	
.                                     —-

-------
            TABLE 1-1 - LIST OF  298 METROPOLITAN AREAS (continued)
204.   Peoria  (111.)
205.   Philadelphia  (Penn.)
206.   Phoenix-Tucson  (Ariz.)
207.   Pine Bluff  (Ark.)
208.   Pittsburgh  (Penn.)
209.   Pittsfield  (Mass.)
210.   Pocatello-Idaho Falls  (Idaho)
211.   Portland  (Oreg.)
212.   Portland-Lewiston-Auburn  (Maine)
213.   Prescott  (Ariz.)
214.   Providence  (Conn., R.  I.)
215.   Pueblo  (Colo.)
216.   Puerto  Rico (Puerto Rico)
217.   Puget Sound (Wash.)
218.   Quincy  (111., Mo.)
219.   Raleigh-Durham  (N. C.)
220.   Rapid City  (Iowa)
221.   Reading (Penn.)
222.   Redding-Red Bluff  (Calif.)
223.   Reno-Carson City (Calif., Nev.)
224.   Richland-Kennewick-Pasco  (Wash.)
225.   Richmond  (Ind.)
226.   Richmond-Petersburg (Va.)
227.   Roanoke-Radford-Pulaski (Va.)
228.   Rochester (N. Y.)
229.   Rochester-Austin-Albert-Owato  (Minn.)
230.   Rochester-Dover-Portsmouth  (N. H.)
231.   Rockford-Janesville-Beloit  (111., Wis.)
232.   Rocky Mount-Goldsboro-Kinston  (N. C.)
233.   Rome (Ga.)
234.   Roswell-Carlsbad-Hobbs-Pecos  (N. Mex.)
235.   Sacramento  (Calif.)
                                     1-8

-------
            TABLE 1-1 - LIST OF 298 METROPOLITAN AREAS (continued)
236.   Salina (Kans.)
237.   Salinas-Monterey-Santa Cruz  (Calif.)
238.   San Angelo  (Tex.)
239.   San Antonio  (Tex.)
240.   San Diego (Calif.)
241.   Sandusky (Ohio)
242.   Santa Fe (N. Mex.)
243.   San Francisco Bay Area  (Calif.)
244.   San Luis Obispo  (Calif.)
245.   Sarasota (Fla.)
246.   Sault Ste. Marie  (Mich.)
247.   Savannah-Beaufort (Ga., S. C.)
248.   Scranton-Wilkes Barre-Hazelton  (Penn.)
249.   Selma (Ala.)
250.   Sequatchie River Valley  (Miss.,  Tenn.)
251.   Shenandoah Valley (W. Va.)
252.   Sherman-Denison  (Tex.)
253.   Sioux City  (Iowa, Nebr.)
254.   Sioux Falls  (Iowa,  S. Dak.)
255.   Southern Louisiana-Texas  (La., Tex.)
256.   South Bend-Elkhart-Benton Harbor (Ind., Mich.)
257.   Spokane-Coeur d'Alene  (Idaho, Wash.)
258.   Springfield  (111.)
259.   Springfield  (Mo.)
260.   St. Cloud (Minn.)
261.   St. Louis (111., Mo.)
262.   Sterling (Colo.)
263.   Steubenville-Weirton-Wheeling  (Ohio,  W. Va.)
264.   Stockton (Calif.)
265.   Syracuse-Auburn  (N. Y.)
266.   Tallahassee  (Fla.)
267.   Tampa-St. Petersburg-Lakeland  (Fla.)
                                      1-9-

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            TABLE  1-1 - LIST OF  298 METROPOLITAN AREAS (continued)
268.   Terre Haute  (Ind.)
269.   Texarkana-Shreveport  (Ark., La., Tex.)
270.   Toledo  (Mich., Ohio)
271.   Topeka-Lawrence  (Kans.)
272.   Tulsa  (Okla.)
273.   Twin Falls  (Idaho)
274.   Tyler  (Tex.)
275.   Utica-Rome  (N. Y.)
276.   Valdosta  (Ga.)
277.   Victoria  (Tex.)
278.   Virgin  Islands (Virgin Islands)
279.   Visalia (Calif.)
280.   Waco-Temple-Killeen (Tex.)
281.   Walla Walla  (Wash.)
282.   Wasatch Front-Salt Lake City  (Utah)
283.   Waterbury-Torrington  (Conn.)
284.   Waterloo  (Iowa)
285.   Watertown (N. Y.)
286.   Wausau  (Wis.)
287.   Wichita (Kans.)
288.   Wichita Falls (Tex.)
289.   Willimantic  (Conn.)
290.   Williamsport-Sanbury  (Penn.)
291.   Wilmington (N. C.)
292.   Winston-Salem-Greensboro-High Point  (N. C.)
293.   Worchester-Fitchburg-Leominster (Mass.)
294.   Yakima  (Wash.)
295.   York (Penn.)
296.   Youngstown-Erie  (Ohio, Penn.)
297.   Yuma (Ariz.)
298.   Zanesville-Cambridge  (Ohio)
                                    1-10

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             APPENDIX E




Assumed Emission Standards

-------
                              Appendix II
                     Assumed Emission Standards

                           I.  INTRODUCTION

     Under the Clean Air Act,  as  amended,  air  quality  standards will be
adopted for Air Quality Control Regions  (AQCR's),  then plans for  imple-
mentation of the standards will be adopted.  Ordinarily,  implementation
plans must include emission  standards intended to  permit  a region to
attain and maintain its established air  quality standards.  For this
report, emission standards were selected without going through the above
steps, which would have required  many assumptions  about air quality stan-
dards and a massive computational effort to derive appropriate emission
standards for all the 298 metropolitan areas.   The emission standards
selected for this report are representative of those now  used throughout
the Nation.

                    II.  STANDARDS FOR PARTICULATES
     For industrial process  sources, the process weight rate regulation
of the San Francisco Bay Area Pollution  Control District  (Table II-l)  was
used as the basis of control cost estimates.   This regulation limits
the weight of particulate emissions per hour as a  function of the total
weight of raw materials introduced into  a process  operation.
     For incinerators, the New York State Incinerator  Standard for new
units was used.  This standard limits total particulate emissions on the
basis of mass rate (pounds/hour), rather than  concentration.   Several areas
have adopted a variation of  this; the New York State standard for new
installations (Figure II-l)  was used to  determine  the  control efficiency
of incinerators.  For fuel-burning equipment,  the  combustion regulation
of the State of Maryland was used (Figure II-2).

                  III.  STANDARDS FOR SULFUR OXIDES

     For fuel-burning equipment,  a regulation based on mass emission rate
per million B.t.u.  input was used.  It allows an emission rate of 1.46 pounds
of sulfur dioxide per million B.t.u. input; this limit is based on an equiva-
lent sulfur content of 1.0 percent by weight in coal (1.38 percent by weight
                                  II-l

-------
in oil).  For process sources, a concentration standard of 500 parts
per million of sulfur dioxide was used.

                  IV.  STANDARDS FOR HYDROCARBONS

     For process sources, cost estimates were based on treatment of all
exhaust gases to remove organic material by 90 percent (or more) by weight.
For petroleum products storage, it was assumed that all stationary tanks,
reservoirs, and containers with more than a 40,000-gallon capacity and a
vapor pressure of 1.5 pounds per square inch absolute (or greater) must
be equipped with floating roofs, vapor recovery systems,  or other equally
efficient devices.  In addition, it was assumed that submerged filling
inlets must be installed on all gasoline storage tanks with a capacity of
250 gallons or more.

                  V.  STANDARD FOR CARBON MONOXIDE

      Cost estimates were based on treatment of all exhaust gases to
remove or reduce the weight of carbon monoxide emissions by at least
95 percent.

                     VI.  STANDARDS FOR FLUORIDES
     Three fluoride emission standards were utilized in this study.  For
the phosphate fertilizer and elemental phosphorus industries a standard
of 0.2 pounds of total fluoride (gaseous and particulate) per ton of
P 05 was applied.  For the aluminum industry a standard of 0.06 pounds of
total fluoride per reduction cell per hour up to a maximum of 40 pounds
per hour was applied.  For the iron and steel and brick and tile indus-
tries emission standards were applied separately to the gaseous and par-
ticulate fluoride fractions.  For the gaseous fraction a standard of 95
percent removal was assumed.  The standard for fluoride particulates
requires that the quantity of total particulate emissions, including
fluoride, meet the "process weight rate" standard.

                 VII.  STANDARD FOR LEAD PARTICULATES

     The standard for lead particulates requires that the quantity of
total particulate emission, including lead meet the "process weight rate"
standard.

                                  II-2

-------
TABLE II-l. - ALLOWABLE RATE OF PARTICULATE  EMISSION BASED ON PROCESS WEIGHT RATE*
Process Weight
Rate
Lbs/hr
100
200
400
600
800
1,000
1,500
2,000
2,500
3,000
3,500
4,000
5,000
6,000
7,000
8,000
9,000
10,000
12,000
Tons/hr
0.05
0.10
0.20
0.30
0.40
0.50
, 0.75
1,00
1.25
1.50
1.75
2.00
2.50
3.00
3.50
4.00
4.50
5.00
6.00
Rate of
Emission
Lbs/hr
0.551
0.877
1.40
1.83
2.22
2.58
3.38
4.10
4.76
5.38
5.96
6.52
7.58
8.56
9.49
10.4
11.2
12.0
13.6
Process Weight
Rate
Lbs/hr
16,000
18,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
120,000
140,000
160,000
200,000
1,000,000
2,000,000
6,000,000

Tons/hr
8.00
9.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
50.00
60.00
70.00
80.00
100.00
500.00
1,000.00
3,000.00

Rate of
Emission
Lbs/hr
16.5
17.9
19.2
25.2
30.5
35.4
40.0
41.3
42.5
43.6
44.6
46.3
47.8
49.0
51.2
69.0
77.6
92.7

       Data in this table can be interpolated for process weight rates up
                                                  0  f\~l
       to 60,000 Ibs/hr by using equation E=4.10 P  *   and can be interpolated

       and extrapolated for process weight rates in  excess of 60,000 Ibs/hr

       by using equation E=55.0 p0'11 -40  (E = rate  of emission in Ibs/hr;

       P = process weight rate in  tons/hr).
                                       II-3

-------
M
      0)
      XI

      §
      o
      P-I
CO
2;
O
M
CO
CO
H

§

W
hJ
M
            100  |_
             50  |-
       10  |-
              5  h-
            1.0  |_
            0.5  I—
            0.1
                10
                                 100
      500  1,000            5,000  10,000


REFUSE CHARGED  (pounds/hour)
50,000  100,000
                  Fig.  II—1.— New York State Particulate Emission Regulation for Refuse Burning Equipment.

-------
I
Ln
      O
      iH

       CD
      CO
      53
      O
      M
      CO
      CO
      M
       W
       >4


       1
0.19
                                                                                                                 0012
                      10                    10                      10                     10


                                             EQUIPMENT CAPACITY RATING (106Btu/hr)


                          Fig. II-2.- Maryland Particulate Emission Standards for Fuel Burning Installations.

-------
 APPENDIX  nr
Mobile  Sources

-------
                             APPENDIX III
                            Mobile Sources

                          I.  INTRODUCTION

     This appendix concerns the costs of complying with current and projected
Federal standards for motor vehicle air pollution emissions and presents
estimates of the costs to purchasers and users of motor vehicles due to air
pollution control for 1967 through Fiscal Year (Model Year) 1976.  The
estimates are based on current, anticipated standards and other available
data as of July 1970.  These standards cover or will cover emissions of
hydrocarbons, carbon monoxide, nitrogen oxides, and particulate matters from
motor vehicles.  This appendix compares projected emissions under the anti-
cipated standards with potential emissions which would be expected if no
standards were in effect.  The costs of meeting the standards are expressed
in terms of additional initial costs to the consumer, increases in operating
and maintenance costs, and an annualized combination of increased operating
and maintenance costs.  The effect of these expenditures on emissions is
also indicated.  Only costs associated with control of vehicular emissions
are included.  Costs or price increases from controls on supplier industries,
such as steel making, are considered in Appendix VI.  The cost of unleaded
gasoline, where required, has been included in total costs presented in
this appendix.
     Only gasoline powered automobiles and light and heavy-duty trucks are
covered in the emissions and cost data presented in this appendix.  Within
the accuracy of available data and estimating techniques, the inclusion of
buses and diesel trucks would have little effect on the total emissions and
cost figures.
     The estimates and projections of emissions contained in this appendix
are based on information available as of July 15, 1970 and are different
from previously published estimates.  Either the previous estimates of
hydrocarbon and carbon monoxide emissions from motor vehicles were low or
the methods for measuring these emissions gave lower readings than those
obtained from vehicles under realistic operating conditions.  This infor-
mation was released by the Secretary of Health, Education, and Welfare on
July 15, 1970  [Ref. 1].
                                  III-l

-------
     The main text of this appendix first presents a synopsis of motor
vehicle control technology through the 1976 models (Section II).  Estimates
of the growth of vehicle populations and the potential for emissions without
control are discussed next (Section III).  The costs to purchasers and users
to have vehicles in compliance with standards are included in the section
on costs (Section (IV) .  Some conclusions drawn from the analysis will be
found in Section V.

                             II.  EMISSIONS

A.   Nature and Sources of Emissions
     Motor vehicles are a major source of air pollution in the United
States.  The four major pollutants from motor vehicles are hydrocarbons,
carbon monoxide, nitrogen oxides, and particulate matter.  Motor vehicles
account for approximately one-half of the hydrocarbon emissions and two-
thirds of the carbon monoxide emissions to the atmosphere in the United
States.  Motor vehicles also contribute about one-third of the nitrogen
oxides and nine-tenths of the lead-bearing particulate matter to the total
national emissions of these pollutants.
     Motor vehicle emissions occur in several ways.   Hydrocarbon emissions
come from evaporation from the fuel tanks and carburetors (gasoline powered
vehicles),  blowby and leakage from the engine crankcase,  and incomplete
combustion.  Figure III-l illustrates the sources and approximate relation
of these emissions.  Incomplete combustion also produces carbon monoxide
in the exhaust gases.  In the internal combustion engine, some of the
atmospheric oxygen and nitrogen combine to form nitrogen oxides which are
emitted in the exhaust.   Unfortunately, conditions which favor more complete
and efficient combustion, thereby reducing exhaust emissions of hydrocarbons
and carbon monoxide, tend to increase the levels of nitrogen oxides formed.
     For present consideration, the source of particulate matter emitted
by motor vehicles is the exhaust.  The particulate matter in exhaust gases
from gasoline engines consists of carbonaceous material, salts and oxides
of iron and lead, and droplets or particles of hydrocarbon materials.  Lead
compounds constitute about 80 percent of the particulate matter thus emitted.
                                  III-2

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                                                     FUEL TANK AND
                                                CARBURETOR  EVAPORATION
                                                         HC  15%
u>
                               EXHAUST
                             HC
                             CO
                             NO,
 70%
100%
100%
CRANKCASE
 BLOWBY
  HC 15%
                   Fig.  III-l.  - Approximate Distribution of Emissions by Source for a Vehicle
                                Not Equipped with Any  Emission Control Systems.

-------
Metallic lead is present to the extent of 50 to 60 percent of total particulate
weight.  Diesel engines have particulate emissions which consist almost
entirely of small carbon particles.  Based on present knowledge, both  the
total amount and the nature of the particulate matter from diesel engines
represent much less of an environmental problem than that from gasoline
engines.
B.   Emission Levels and Effects of Standards
     As has been previously noted, discrepancies have been found in the
standards and measurement techniques in effect for the period FY 1968
through 1971.  In the emission estimates reported herein, corrections have
been made for the FY 1968 through 1971 period so that the data are on a
comparable basis for the entire period of FY 1967 through 1976.
     Crankcase emissions were already under control at the beginning of
the time frame being considered here.  The crankcase contributions of the
older cars which are not equipped with BJLowbjr control devices have been
included in the emission estimates presented here.
     1.   Potential for Emissions Without Control Under the Clean Air Act
          Table III-l gives the estimated growth of the number of automobiles
     and gasoline trucks in use for the period of Fiscal Years 1967 through
     1976.  This table also projects the potential emissions which could be
     expected if no control regulations were in effect.  The total number
     of vehicles in use shows a growth of approximately 31 percent.  The
     total potential annual emissions show an increase of approximately the
     same magnitude.
          In making the projections shown in Table III-l, the vehicle popula-
     tions have been projected on the basis of the best information on the
     numbers of vehicles actually in use rather than the number of vehicle
     registrations [Ref.  2].   The registration method is .considered less
     accurate because it is basically a count of the number of registration
     transactions and results in multiple counting of some vehicles.
          The vehicles shown in Table III-l are divided into two categories;
     the first comprises automobiles and light-duty trucks.  Light-duty
     trucks are six thousand pounds or less  in gross vehicle weight (GVW).
     The other category,  heavy-duty gasoline trucks, consists of trucks over
     six thousand pounds GVW.  The vehicle data shown do not include either
     diesel trucks or buses of the gasoline or diesel variety.  Based on the

                                   III-4

-------
                              TABLE
                                           - MOBILE SOURCE GROWTH AND POTENTIAL EMISSIONS, FY 1967-1976
                                                                 [1967 Baseline]
Fiscal Year
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
Numbers of Vehicles in Use
(Millions)
Autos and Light-Duty
Trucks
81.8
84.6
88.3
90.7
92.2
94.9
97.5
100.1
103.9
107.2
Heavy-Duty Gasoline
Trucks
5.3
5.7
5.9
6.0
6.1
6.2
6.4
6.6
6.8
7.1
Total
87.1
90.3
94.2
96.7
98.3
101.1
103.9
106.7
110.7
114.3
FY 1967-76 Total Potential Emissions
Potential Emissions Without Controls in Effect
(Thousands of Tons)
Hydrocarbons
21,100
24,200
25,400
26,100
26,500
27,300
28,000
28,800
29,900
30,800
268,100
Carbon
Monoxide
126,000
130,000
137,000
140,000
143,000
146,000
151,000
155,000
160,000
166,000
1,454,000
Nitrogen
Oxides
5,700
5,910
6,180
6,350
6,450
6,640
6,820
7,000
7,260
7,500
65,810
Particulates
333
346
361
370
377
387
396
409
423
438
3,840
Ln

-------
best data available, buses and diesel  trucks  constitute a small fraction
of  the  total vehicle population  [Ref.  3].  Also,  for  the time period
considered  in  this appendix,  the only  anticipated Federal standards for
diesels  are for smoke density and cannot be directly  related to the
emissions of the other pollutants considered  here.  Additional Federal
standards may  be proposed later.  The  State of California,  however, is
proposing other exhaust emission standards for diesels.
     Table  XH-1 also shows the potential emissions of the  four major
pollutants  from motor vehicles.  In addition  to showing estimates for
the individual pollutants and the total emissions, the table expresses
total emissions as a percentage of 1967 levels.  The estimated total
potential emissions in 1976 are about one and one-third times those in
1967.  Table III-l further shows the projected total pollution potential
over the entire span of FY 1967 through 1976.
2.   Projected Standards and  Emissions with Controls Under  the Act
     Table  III-2 illustrates the effect of  anticipated controls on the
emissions for FY 1967 through 1976.  In making the projections shown
in Table III-2, current and anticipated standards detailed in Table 111^3
were used.  These standards either have been promulgated or are under
consideration by the Air Pollution Control Office-  The anticipated
standards for heavy-duty trucks are still under study and develop-
ment .
     As shown in Table III-2, nearly 82 percent of the motor vehicles in
use should  be controlled by 1976.  In projecting the percentage of
vehicles under control, the age distribution of vehicles in use has
been considered with older vehicles being removed from service and new
vehicles being added with time.  Age and use distribution within the
vehicle population are based on 1969 data.   It is assumed that a comparable
distribution will hold through FY 1976.
     It has been assumed in making projections that controlled vehicles
will be maintained in such a manner that their average emissions will
not exceed  the level set by Federal standards.  Tests have  indicated
that vehicles now on the'road tend to increase their emission levels
somewhat with age; however, the new Federal standards and methodologies
for manufacturer qualification of vehicles are intended to  insure that
vehicles are capable of remaining below the standard levels through

                               III-6

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                                                  TABLE III-2. - EFFECTS OF CONTROLS ON MOBILE SOURCE EMISSIONS, FY 1967-1976

                                                                                   [1967 Baseline]

Fiscal Year





1967
1968
1969
1970
1971
1972
1973
1974
1975
1976

Autos and Light-Duty Trucks
Uncon-
trolled
(Millions)


81.8
77.6
71.0
63.6
54.3
45.2
37.0
29.3
22.7
17.9
Con-
trolled
(Millions)


0
6.9
17.3
27.1
37.9
49.7
60.5
70.8
81.1
89.3
Percent
Under
Control


0
8.2
19.6
29.9
41.1
52.4
62.0
70.7
78.1
83.3
Heavy-Duty Gasoline Trucks
Uncon-
trolled
(Millions)


5.32
5.67
5.89
5.52
5.04
4.64
4.19
3.76
3.41
3.10
Con-
trolled
(Millions)


0
0
0
0.45
1.04
1.61
2.23
2.83
3.43
3.96
Percent
Under
Control


0
0
0
7.5
17.1
25.8
34.7
42.9
50.2
56.1
Total Number of Vehicles
Autos and Light and Heavy-
Duty Gasoline Trucks
Uncon-
trolled
(Millions)


87.1
83.3
76.9
69.2
59.3
49.8
41.2
33.1
26.1
21.0
Con-
trolled
(Millions)


0
6.9
17.3
27.6
38.9
51.3
62.7
73.6
84.5
93.3
Percent
Under
Control


0
7.7
18.4
28.5
39.6
40.9
60.3
69.0
76.4
81.6
FY 1967-76 Emission and Percent Totals
Emissions with Controls in Effect

Level
(Thou-
sands
of
Tons)
21,070
20,670
20,160
19,030
17,430
15,680
14,080
12,430
10,710
9,080
160,300
Per-
cent
of
Poten-
tiali/
100
85
79
73
65
57
50
43
35
29
60
Carbon
Monoxide
Level
(Thou-
sands
of
Tons)
126,100
125,600
124,400
118,400
110,500
102 ,000
94,000
86,000
76 , 300
66,400
1,030,000
Per-
cent
of
Poten-
tial!/
100
97
91
84
77
69
62
55
48
40
71
Oxides
Level
(Thou-
sands
of
Tons)
5,700
6,070
6,560
6,910
7,200
7,580
7,440
7,130
6,550
5,780
66,900
Per-
cent
of
Poten-
tiali*!/
100
103
106
109
112
114
109
102
90
77
102
Particulates

(Thou-
sands
of
Tons)
330
350
360
370.
380
390-
390
410
390
370
3,740
Per-
cent
of
Poten-
tial!/
100
100
100
100
100
100
100
100
92
84
97
M

M
    —    Potential emissions as shown in Table III-l.

    2/
    —    Implementation of hydrocarbon and carbon monoxide controls causes increase in nitrogen  oxides emissions until  countered

         by nitrogen oxides controls

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                                         TABLE III-3.  - CURRENT AND ANTICIPATED STANDARDS FOR MOBILE SOURCES, 1967 - 1976

Vehicle Class


Autos and
Light-Duty
Trucks
(under 6,000
Ibs. GVW)







Heavy-Duty
Gasoline

Trucks
(over 6,000
Ibs. GVW)




Year
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1967
1968

1969

1970
1971

1972
1973
1974
1975
1976
Maximum Exhaust Pollutant Levels Permitted
Hydrocarbons
No Standard
275ppJ*2/
275ppmiil/
4.6gm/mi-/
21
4 . 6gm/mi—
2.9gm/mi
2.9gm/mi
2.9gm/mi
0,5gm/mi
0.5gm/mi
No Standard
it

tt
21

275ppvr-

275ppm
275ppm
ISOppm
ISOppm
ISOppm
Carbon Monoxide
No Standard
1.5% (vol. yi^
1.5% (vol . ) — * —
47gm/mi-/
21
47gm/mi—
37gm/mi
37gm/mi
37gm/mi
llgm/mi
llgm/mi
No Standard
H

ii
71
1.5% (vol.)-'
f\ /
1.5% y

1.5%
1.5%
1.0%
1.0%
1.0%
Nitrogen Oxides
No Standard
11
ti
H
11
H
3.0gm/tni
3.0gm/mi
0.9gm/mi
0.9gm/mi
No Standard
it

it

it
ii

H
ti
tt
785ppm
785ppm
Particulates
No Standard
it
tt
it
it
tt
tt
"
O.lgm/mi
0 . Igm/mi
No Standard
it

ti

H
tt

ii
ti
ti
ii
it

Crankcase Vapors
Under Control
NONE


ALL
YEARS




Under Control

NONE


FOR

ALL

YEARS




Evaporative Losses
No Standard
"
it
••
6gm/test
2gm/test
11
11
H
ii
Ho Standard
„

ii

"
„

"
2gm/test-/
3 /
2gm/test—
2gm/test— '
3/
2gm/test—
H
H
H

00
    —^    For  engines  over  140  cubic  inch displacement.


    —^    Measurement  procedures  originally  specified in standards have been changed.  As originally published  (1970-71) standards

          were 2.2gm/mi for hydrocarbons and 23gms/mi for carbon monoxide.  Under new procedures,  the equivalent  figures are those     tion
          in this table. Revised measurement standards to be enforced beginning 1972.  Federal Register Volume 35,  No. 136, pt. II,       "
          July 15, 1970 and announcement from Office of Secretary of Health, Education, and Welfare, July 15, 1970.

     —    leased on one conturol. system pex vehicXe .

-------
    their useful life.   Some method of enforcement or incentive may be
    required to assure  that  owners do maintain vehicles so that emissions
    are kept to specified  levels.
         The projected  annual  emissions with the anticipated controls in
    effect are expressed in  weight quantities and as the percentage of the
    uncontrolled potential.  By 1976 hydrocarbons should be reduced to
    about 29 percent  of the  uncontrolled potential, carbon monoxide to
    40 percent, nitrogen oxides to 77 percent, and particulates to about
    84 percent of  potential.
         The nitrogen oxides level with controls is expected to rise above
    the uncontrolled  level for a portion of this time period.   This is due
    to the fact that  the controls  for hydrocarbons and carbon monoxide,
    which are  implemented earlier  than those for nitrogen oxides,  tend to
    produce an increase in nitrogen oxides with a reduction of the other
    pollutants.  The  first Federal standards for nitrogen oxides are
    expected  to be effective in FY 1973.  With these standards in effect,
    the  levels of  nitrogen oxides  emitted will begin to show a decline.
    However,  it is not  until the last two years of the time period that
    these levels will actually fall below those expected if hydrocarbons
    and  carbon monoxide were not being controlled.
         In making the  emission projections with controls as shown in
    Table -III-2,  consideration was given not only to the age distribution
    within the vehicle  populations each year, but to the usage of  various
    ages of vehicles.  Based on total mileage estimates and the number of
    cars in use,  the  average mileage driven per year is about  10,600 miles;
    for  heavy-duty trucks the  average is about 12,000 miles.  Based on
    Bureau of  Public  Roads surveys the trend is for annual mileage to
    decrease with  the age of the vehicle. , Thus, the newer vehicles con-
    tribute a  significantly larger portion of the total mileage and fuel
    consumption  than the older vehicles.

    III.  STATE-OF-THE-ART OF  CONTROL TECHNOLOGY FOR MOBILE SOURCES

A.  Vehicle Controls  [Ref. 4].
    The  past year  has not produced any major advances in either new tech-
nology for the  control of the internal combustion engine or the development

                                  III-9

-------
of power sources as alternatives.  Some progress has been made in control
techniques and more is anticipated in certain areas, such as the use  of
catalytic exhaust reactors.  Such changes appear to be evolutionary rather
than of the breakthrough variety.
     Most of the progress to date in reducing hydrocarbon and carbon monoxide
emissions has been made by increasing air-fuel ratios (APR) in new engines.
Many 1970 model cars are designed to operate at air-fuel ratios of 14 to  16
parts air to one part fuel, thus reducing the hydrocarbon and carbon monoxide
emissions.  It is an unfortunate fact that nitrogen oxides emissions reach
a maximum in this range (approximately 15.5).  Theoretically, an AFR in the
range of 18 to 20 would be the optimum point for limiting emissions of all
gaseous pollutants (hydrocarbons, carbon monoxide,  and nitrogen oxides) in
the exhaust.  In practice, however, air-fuel ratios greater than about 17.5
produce rough engine operation which manufacturers  feel would be unacceptable
to most drivers.  Automobile manufacturers and carburetor suppliers are con-
tinuing their efforts to develop satisfactory production models with leaner
operating engines; i.e.  using a higher air-to-fuel ratio.
     Diesel engines always operate with an excess of air present in the
combustion cylinders.  This accounts for the diesel engine's low emissions
of hydrocarbons and carbon monoxide as compared with the gasoline engine.
The AFR is varied by the driver rather than being fixed by carburetor design
as in a gasoline engine.  Smoke from diesel engines is a function of the
engine loading, speed, and the air-fuel ratio.  Since these factors are
under the control of the diesel operator, most diesel engines now on the
road can meet smoke standards through FY 1976 if properly maintained and
operated.  Minor design changes, such as improved fuel injectors, are being
incorporated into new diesel engines to further improve the performance in
terms of smoke and odor emissions.
     Exhaust emission standards for light-duty vehicles can be met through
FY 1972 by minor modifications to current design engines.  Such modifications
include carburetion improvements, operation with leaner fuel mixtures, control
of engine inlet-air temperature, and changes in the timing of valve and
ignition operation.
     The nitrogen oxides standards for exhaust emissions, which become
effective in FY 1973, can be met through partial exhaust gas recirculation
to the engine air inlet.  Although recirculation reduces nitrogen oxides

                                  111-10

-------
emissions, it has a slightly adverse effect on  the  levels  of  other  emissions.
However, it should be possible to meet standards by this means  through  FY  1974.
     Anticipated standards for evaporative emissions  from  fuel  tanks  and
engines of gasoline vehicles can be readily met through FY 1976.  In  fact,
the ease with which the original standards were met has resulted  in an
advancement of the effective date of the more stringent evaporative standards.
Automobile manufacturers report considerable progress during  the  last year
in simplification and production engineering of evaporative control devices.
These advances should result in reducing device complexity, maintenance
requirements and initial price.
     It should be possible for gasoline engines to  achieve FY 1975  standard
levels.  However, in the opinion of the automobile  manufacturers, this  may
be near the limit of what might be expected with reciprocating  internal-
combustion engines.  In order to meet FY 1975 standards, some type  of
exhaust-gas reactor system appears necessary.   Research and development
efforts are continuing on both engine-exhaust manifold-type reactors  and
catalytic-muffler-type reactors.  The current consensus of major  U. S.
manufacturers is toward the use of catalytic-muffler-type  units in  FY 1975
and FY  1976.  Some limited production of single catalyst units may  begin
with the  1975 model year.  This represents somewhat of a change in  thinking
during  the last year.  The change has been brought  about because  of a push
toward  the reduction or elimination of lead in  gasoline.   The presence  of
lead in gasoline has an undesirable effect on catalytic-reactor-type  units
and has been a major stumbling block in the development of such units.
Although  the automotive industry has sought the elimination of  lead in
gasoline  because of adverse effects on the longevity  of exhaust emission
control systems such as catalytic and thermal reactors, reduction or
elimination of lead will also greatly reduce the problem of particulate
emissions  in the exhaust.
     In order to meet the FY 1975 standards, it is  anticipated  that the
catalytic-reactor units will be used to reduce  nitrogen oxides as well  as
carbon monoxide and hydrocarbons.  To accomplish this, tandem catalytic
units or  dual-catalyst units will probably b<3 required.  In a two-catalyst
system such as this, the engine is run fuel rich to produce the low-oxygen-
content exhaust gases required for a reducing-type  reactor.  This results
in an increase in fuel consumption.  The dual-catalyst units  will probably

                                   III-ll

-------
serve multiple functions in the exhaust system of 1975-76 model  automobiles,
The catalytic-reactor units may also serve as conventional mufflers  and
have provision for trapping particulate matter.
     United States automobile manufacturers are working toward a life-
time of 50 to 100 thousand miles for the catalytic-muffler systems.   In
accord with this goal, manufacturers anticipated that so-called  lifetime
exhaust systems will be added to the vehicle.  This means that the other
portions of an exhaust system will be made of a durability comparable to
or greater than the catalytic-reactor units.  This is intended to avoid
the possibility of damage or requirements for replacement of expensive
catalytic units due to failure of other exhaust components.  The increased
life of such exhaust components will be of benefit to the consumer.
     The foregoing discussion has been directed largely at automobiles.
It is anticipated that the technology will be essentially identical for
other light-duty gasoline vehicles.  The same technology will probably
be applied in general to the heavy-duty gasoline vehicles also, but
there is a greater potential for the use of exhaust-manifold reactors
on heavy-duty vehicles.  During the period through FY 1976, however, it
is probable that heavy—duty gasoline trucks will be able to meet the
standards through engine modifications and the addition of some exhaust
gas recirculation.  It is not anticipated that particulate control will
be required on heavy-duty vehicles through FY 1976.   The technology of
evaporative emission control for heavy-duty vehicles should be quite
similar to that for light-duty vehicles.  There may be some differences,
however, due to the presence of multiple fuel tanks on many heavy-duty
vehicles.
B.   The Outlook for Unleaded Gasoline
     Tetraethyl lead was once added only to premium grade gasoline.
Regular grades were essentially of the same base, but without the lead
addition.  As a result, the public came to associate the name "ethyl"
with premium quality.   This association in the public mind continues
despite the fact that both regular and premium gasolines today contain
lead additives.
     Average premium gasolines on the market contain about 2.8 grams of
lead per gallon and have a research octane number (RON) of about 100-
average regular  grade gasoline has about 2.4 grams of lead per gallon and
                                    111-12

-------
a RON of about 94.  The range of octanes varies with  time and sources of
petroleum.  Regular gasolines may range from 90 to 96 octane; premiums from
97 to 100.  Some companies retail three grades of gasoline; others use
blending pumps to offer virtually a continuous spectrum of octanes in the
92 to 100 range.
     With current refining processes, the average RON of premium gas is
slightly below 93 without lead added, satisfying the  antiknock requirements
of only about 55 percent of the automobiles currently in use.  Removal of
lead from regular gas would result in a research octane number slightly
below 86, satisfying less than four percent of current automobiles.  The
combined regular and premium gasoline base stocks (before addition of lead)
constitute the so-called "pool" for the nation.  The  "pool" octane thus
obtained is about 91 RON.
     1.   Movement Toward Low Lead and Lead-Free Gasolines
          Recent months have seen rapid changes in the prospects for low-
     lead or unleaded gasoline as the petroleum industry adjusts to the
     realities of potential restrictions.  United States automobile manu-
     facturers have decided to lower the octane requirements of new cars
     beginning with 1971 models.  This, removes some of the arguments against
     unleaded gasoline.  If it is not necessary to maintain present high
     octane levels without using lead, refinery processes will not require
     extensive changes.  This means that 91 RON unleaded gasoline can be
     offered at little or no change in price over present regular grades.
          By the end of the 1971 model year, almost all U. S. automobile
     production will have engines suitable for operation on 91 research
     octane gasoline.  This is an effort by the manufacturers to push the
     production of unleaded gasoline in anticipation  of introducing catalytic
     exhaust reactor units.  In the auto industry there is a general feeling
     that complete absence of lead in gasoline will increase the possibility
     of valve problems in current engine designs.  Only very low levels of
     lead content are required to prevent these problems; however, present
     experience indicates that catalytic reactors may not tolerate even
     small concentrations of lead in gasoline.  Gasoline or oil additives
     may be found to prevent valve problems without lead.  Newer engines
     will be designed to avoid such problems.

                                    111-13

-------
2.   Progress in Availability of Low-Lead and Lead-Free Gasolines
     Major gasoline producers have recently announced the immediate
or imminent availability of low-lead or unleaded gasolines.  The pro-
ducts and prices being offered present a mixed picture.  One producer
has for a number of years offered an unleaded premium gasoline, with
a price usually somewhat higher than leaded premiums in the same area.
Another major producer has been offering an unleaded regular in some
parts of the country, with a price above leaded premium.  Yet another
offers a low-lead regular (nominal 96 RON) as the middle level of a
three-grade line.  This middle grade is retailing for one cent per
gallon above the leaded grade it has replaced.  Other companies with
three-grade or blending pump lines are offering their lowest octane
product (92 to 94 nominal RON) at one cent below area prices for leaded
regular.  Other variations are in the offing as more suppliers announce
their plans.
     The variations in approach by producers reflect several influences.
These influences include the company's ability to produce a given octane
with lowered lead content (dependent on the nature of its crude supply
and types of refining equipment) and judgments concerning financial and
marketing strategies.  Competitive effects will tend to produce a more
uniform price and product balance as time passes.
     Gasoline retailers report that initial consumer response to new
low-lead and unleaded fuels has been disappointing.  The concept that
higher octane fuel is inherently better for an automobile is deeply
imbedded in consumer psychology.  The majority of U. S.  automobile
owners use gasoline with octane ratings (and hence lead content) in
excess of their engine's requirements.  This may result from years
of exposure to gasoline advertisements, the association of the word
"premium" with higher octane ratings, and ignorance.  This situation
will likely continue even though new cars will have lower octane
requirements.  Consumer apathy toward unleaded fuels may also reflect
ignorance of the environmental concerns regarding lead.
     A major educational campaign will be required to induce the con-
sumer to accept the lowest octane gasoline which is actually required
by his car.  If this is not done, continued public demand for excessive
quantities of high octane fuel could result in unnecessarily high prices
for unleaded gasoline.

                                 111-14

-------
              IV.  COST ASPECTS OP COMPLIANCE WITH STANDARDS

     Tables HI^-4 and I1I-5 detail  the per^vehicle cost of complying with Federal
standards for mobile sources for the 1967-76  model years.   The uncontrolled
1967 model year is a baseline.  Tables  III-4  and III-5 show the emissions con-
trolled for each vehicle model year, the anticipated  control methods,  and
the control investment per vehicle  [Ref. 5],  The control  investment per  vehicle
represents an increase in price to the  purchaser of new motor vehicles.
Anticipated requirements for additional maintenance due to emission  controls
are also shown in the tables with the  frequency  and event  cost of such
additional maintenance indicated.  It  is assumed that legal or warranty
requirements will insure that owners obtain the  necessary  maintenance.  The
anticipated additional maintenance costs are  based on current labor  costs
for procedures comparable to those anticipated and for estimated costs of
replacement items associated with emission controls.   These anticipated
periodic maintenance costs are also shown on  an  annualized basis.  Additional
operating costs incurred as a result of fuel  penalties are also shown.  The
total additional annual costs per vehicle are the annualized maintenance
cost plus the extra operating cost.  All cost figures  are  based on 1970
dollars.
     Since the motor vehicle industry provides products  directly to  the
consumer public, costs have been expressed in terms of the owners and
users of vehicles.  In the automotive industry increased costs  of manu-
facturers (including research and engineering) are passed  directly to the
final consumer by means of increased retail prices.
     For the typical automobile owner and user,  concepts of  amortization,
annualization, or percentage change in  annual costs probably have little
significance.  The typical automobile owner will tend  to view his costs
largely in terms of the increased price at time  of purchase  and increased
operating costs in terms of fuel usage.  The  depreciation  characteristics
of vehicles vary widely depending on the popularity of  the individual model
involved.  For this reason it would add little to attempt  to  annualize
investment costs according to actual vehicle  depreciation  curves.
     The costs of additional maintenance requirements  have been annualized
on the basis of the time interval between  the required maintenance  events.
Thus, a maintenance requirement that must be  met on an average of once every
five years has its costs annualized on  a five-year basis.

                                    111-15

-------
                                        TABLE II1-4. - UNIT  CONTROL METHODS AND COSTS,  1967 -  1976 MODEL YEARS
                                                              CARS AND LIGHT-DUTY TRUCKS
Model
Year
1967
and
ear-
lier
1968-
69

1970



1971





1972
1973-
74












1975-
76



















Emissions 1 .
Controlled—
None



HC.CO
(exhaust)

HC CO
(exhaust,
some evap-
orative HC)
HC
(exhaust
and evap-
orative)
CO

"
HC
(exhaust
and evap-
orative)
CO, NO









HC
(exhaust
and evap-
orative)
CO.NO ,
particu-
lates














Control
Method
None



Engine
modifi-
cations

modifi-
cations

Engine
modifi-
cations

Evapora-
tive traps
n
Same as
1971 plus
exhaust
gas re-
circula-
tion








Dual cata-
lyst reac-
tor-
mufflers
plus par-
tlciilate
traps (air
injection
required
for reac-
tors). Un-
leaded gas-
oline.
Evaporative
traps .






Control
Investment
per
Vehicle
(Dollars)
None



2.00


7.00



17.00





17.00
42.00













240.00




















Additional
Maintenance
Requirements
Type of
Maintenance
None



Average
Frequency
None



None (more care re-
quired in tuneup and
adjustment procedures
.
quired in tuneup and
adjustment procedures)

Repair and
replacement
of evapora-
tive traps
and parts

»
Same as
1971 plus
servicing
of recir-
culatlon
system








Servicing
of air
injection
system.
Replace-
ment of
catalytic
units.
Servicing
evapora-
tive traps.
Maintenance
adjustments
and clean-
Ing.






5 yrs. or
50,000
miles
(once in
10 yrs.)

"
5 yr/
50,000
miles
for
evap-
orative
control
1 yr/
10,000
miles
for re-
circula-
tion
system
5 yr/
50,000
miles
for
air
inj ec-
tion.
catalytic
units and
evapora-
tive traps.

Adjust
and clean
as needed.
Credit for
normal
exhaust
system
mainte-
nance .
Maintenance
Event
Cost
(Dollars)
None



None


None



24.00





24.00
24.00






8.00






98.00











24.00


-50.00





Additional
Maintenance
Annualized
Cost
(Dollars/Yr)
None



None


None



2.40





2.40
10.40













7.00




















Additional
Operating
Cost (fuel , ,,
penalty costs)-1—
(Dollars/Yr)
None



-5.10


-5.10



-5.10





-5.10
-2.50













5% fuel
penalty
$13.70.


















Additional
Maintenance and
Operating Cost
(Dollara/Yr)!/
Done



-5.10


-5.10



-2.70





-2.70
7.90













20.70




















I/
—    HC • Hydrocarbons, CO " Carbon Monoxide, NO  - Nitrogen Oxides.
-'   Based on 757  gal/yr  @ 34c/gal.
—    Negative values  indicate benefits rather than costs.   Benefits due to slightly improved  fuel mileage.
                                                              111-16

-------
                                TABLE III-5. - UNIT CONTROL METHODS AND COSTS, 1967-1976 MODEL YEARS
                                                      HEAVY-DUTY GASOLINE TRUCKS

Model
Year
Pre
1970
1970-71



1972
1973

1974
1975-76


Emissions.. .
ontrolled—
None

HC.CO



HC.CO
it

it
HC.CO,
NO p ar-
ticulates


Control
Method
None

Engine
modifi-
cations
(lean
opera-
tion) .
ii
Same as
1970-71
plus evap-
orative
traps .
Same as
1973
Same as
1973 plus
exhaust
gas re-
circu-
lation.
Unleaded
fuel.
Control
Investment
per
Vehicle
(Dollars)
None

9.00



9.00
21.00

21.00
46.00

Additional
Maintenance
Requirements
Type of
Maintenance
None

None



None
Repair and
replacement
of evap.
traps and
parts.
ii
Same as
1973 plus
servicing
or recirc.
system.

Average
Frequency
None

None



None
5 yrs.
(twice
in 15
yrs.)

ii
5 yrs.
evap.
traps.
1 yr.
recirc.
system.


Maintenance
Event
Cost
(Dollars)
None

None



None
26.00

26" .,00
26.00
10.00

Additional
Maintenance
Annualized
Cost
(Dollars/Yr)
None

None



None
3.50

3.50
13.50

Additional
Operating
Cost (fuel
penalty costs)
(Dollars/Yr)
None

None



None
None

None
None

Additional
Maintenance
and Operat-
ing Cost
(Dollars/Yr)
None

None



None
3.50

3.50
13.50

—    HC = Hydrocarbons, CO
Carbon Monoxide,  NO  =  Nitrogen Oxides.

-------
     In preparing the cost information shown in Tables III-4 and  III-5,  consid-
 eration has been given to offsetting benefits which may act to reduce  the
 net cost  to purchasers and users of motor vehicles; e.g., increased gas
 mileage due to leaner engine operation.
     Crankcase emission devices (the PCV valve system) are not included  in
 pre-1968  costs.  These devices were required by law beginning with 1966
 models, but have been standard on U. S. cars beginning with 1963 models.
     Controls classified under the category of engine modifications include
 changes in compression ratios, valve and ignition timing, and carburetion
 and fuel-air inlet design changes.  Changes of this type are commonly  used
 by manufacturers to differentiate engines of one basic design in order to
 offer  a product line of several horsepower options with varying fuel require-
 ments.  Such changes, which do not require the addition of any components to
 engines or involve any basic concepts not current in the 1967 designs, are
 here considered to be ordinary engineering options for the manufacturers
 with negligible effect on retail prices.  Where additional items are added
 to  the basic engine design, such as spark advance cut-out devices, evapora-
 tive traps, or equipment for exhaust gas recirculation, retail price esti-
 mates  have been used in computing the control investment cost per vehicle.
 In  the case of evaporative emission traps, consideration has been given  to
 engineering advancements which have permitted reduction of the retail  cost
 of  such units from the $35 level for the prototypes as sold in California
 in  1970 to approximate $10 for the types that will be in general use through-
 out the U. S. in 1971 models.  Possible costs for extensive emission com-
 pliance testing of assembly line vehicles have not been included.
     For  the 1975 and 1976 model years, the control investment costs per
 vehicle include the price of the catalytic-reactor-type muffler units  with
 a long-life exhaust system, the equipment required for air injection to  the
 oxidizing reactor, provision for trapping of particulates, and the evapo-
 rative emission traps.  As has been previously stated, it is assumed
 that unleaded gasoline will be employed by the 1975 and 1976 model vehicles.
For the 1975-76 models, a credit has been given under maintenance require-
ments for reduction in the exhaust system maintenance due to the use of
long-life materials as compared to current exhaust system materials.
     As may be seen from the Table III-4, the slightly improved fuel consumption
with engines being operated under lean conditions produces an overall bene-
fit or negative total annual cost per vehicle through the 1972 model year.

                                   111-18

-------
It has been estimated that the  lean  operation will produce approximately
two percent improvement in gasoline  mileage for  1968 through 1972 models.
Theoretically, the use of evaporative  traps to recover normally lost fuel
should result in a fuel saving.  However,  in practice,  the disturbances
in carburetion and the balance  of  the  air-fuel intake system produced by
adding on such devices will probably tend  to offset any gain due to  fuel
recovery.
     Exhaust gas recirculation  will  probably produce a slight decrease in
fuel economy, tending to offset the  benefits of  lean engine operation.
Theoretically, recirculation  should  have little  effect on engine efficiency,
but again in practice, disturbances  of carburetion and air-fuel distribution
will produce a small loss in  engine  efficiency.
     For FY 1975-76 fuel-cost penalties are incurred from two sources.
Approximately a five percent  fuel  penalty  is the minimum which can be
expected for 1975-76 model automobiles using a reducing catalyst system  to
control nitrogen oxides.  The government is seeking to have unleaded (and
very low-lead) gasoline in general use by  1974 or  1975.   Therefore,  it is
assumed that unleaded gasoline  will  be used by all automobiles and gasoline
trucks in FY 1975-76.  An additional two cents per gallon for unleaded
gasoline is charged only against pre-1971  model  vehicles for FY 1975-76.
The increased cost for these  cars  to use unleaded  fuel is based on an
assumption of octane requirements  similar  to 1967  vehicles.   It is assumed
that there will be no extra cost for the low octane lead-free fuel used  by
1971-76 model engines in FY 1975-76.
     Cost estimates for producing  unleaded gasoline of octane levels
required by pre-1971 model automobiles have ranged from about one-half to
two and one-half cents per gallon  over comparable  leaded fuels [Ref. 5-8],
The decision of automobile manufacturers to lower  octane requirements
beginning with 1971 models has  greatly changed the fuel cost outlook from
earlier projections.  Fluctuations in  costs of unleaded gasoline versus
leaded are to be expected in  the transition period.  The price situation
should be stabilized by the time vehicles  appear with catalytic exhaust
reactors.
     Control costs for heavy-duty  trucks are anticipated to be generally
comparable to those for automobiles  and light-duty trucks meeting the same
standards.  However, the differences in implementation of heavy-duty truck
standards shifts the time frame of the costs. For the heavy-duty vehicles,
                                   111-19

-------
vehicles, higher  fuel  consumption rates increase  the  relative importance
of  fuel  penalties and  total annual cost.
      A summary  of the  total national economic effects of mobile source
controls through  1976  is given in Table III-6.  The incremental capital
investment  given  each  year is for cost increases  due  to meeting the
then-current  emission  standards for new vehicles  sold that year.   The
incremental capital  investment represents the sum-total of individual
cost increases  for all vehicles of a model year corresponding  to  the
fiscal year shown (for practical purposes the automobile model  sales
season corresponds closely with a Federal fiscal  year}.  The additional
operating costs shown  in Table III-6 are the total for all vehicles in
use which are under  any Federal emission standards.  The age and  use
distributions within the vehicle populations have been considered.
Reductions  in the potential emission  levels for  each year are  also
shown in Table  III«r6,
      Table  IIIr-6  also  shows the totals of the capital investment  and  additional
operating costs incurred over the entire period of 1967 through 1976,  and
the reduction from the potential emission level achieved.  The  total  of  the
capital  investment and additional operating costs projected for the period
of  FY 1967  through 1976 is approximately 7.1 billion dollars for  the  nation*
It  should be  pointed out that the small dollar benefits (negative costs)
per vehicle in  the FY  1968 through 1974 period are very sensitive to
variations  in data on  average vehicle useage and  fuel consumption rates.
For this  reason,  as  far as the individual owner is concerned, costs and
benefits will about  offset each other in this period.  For the  individual
private  automobile owner, the purchase price differences will be  the most
obvious  cost  item, although these differences do  not become major until
the 1975 model  year.

                             V.  CONCLUSION

     Based upon information available as of July  15, 197Q, air  pollution
control costs to be borne by vehicle purchasers and users do not  appear
significant through Fiscal Year 1974.  Control costs will climb sharply
to meet  the anticipated standards in succeeding years unless presently
unforeseen technological advances occur.  Meeting the projected standards
                                    111-20

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                                                  TABLE  III-6. - COSTS OF CONTROLS AND EFFECTIVENESS IN REDUCING EMISSIONS,

                                                                        FY 1967-1976 ALL AUTOS AND GASOLINE TRUCKS
I
NJ
Fiscal Year



1967
1968

1969

1970
1971
1972

1973
1974
1975
1976
FY 1967-76
Totals
Incremental Invest-
ment Due to Increased , ,
Prices of New Vehicles-
Millions of Dollars)
0
13.9

20.7

56.1
131.1
136.6

346.3
498.5
2,068.7
3,031.7

6,303.6
Additional Costs
for Operation
and Maintenance — '
(Millions of Dollars)
0
-35.4^
LI
-88.2-'
4/
-138.3-
-175.3^
-208. 9 -
LI
-154.4-'
- 50.3^
743.5^
908. &-'

803. 3
Reductions in Emissions From Potential —
Hydrocarbons
(Thousands
of Tons)
0
3,500

5,200

7,100
9,100
11,600

13,900
16,400
19,200
21,700

107,700

(Percent)
0
15

21

27
35
43

50
57
65
71

40
Carbon Monoxide
(Thousands
of Tons)
0
4,300

12,400

22,000
32,200
44,700

56,800
68,900
84,400
99,500

425,200

(Percent)
0
3

9

16
23
31

38
45
52
60

29
Nitrogen Oxides
(Thousands
of Tons)
0
-160^
5/
-380-
5/
-560-
-750^
-940^
5/
-620-
-130 -
710
1,720

1,110

(Percent)
0
- 3~
5/
- 6~
5/
- 9-
-12 ~
-14^
5/
- 9-
- 2-
10
23

- 2
Particulates
(Thousands
of Tons)
0
0

0

0
0
0

0
0
31
68

99
I/

(Percent)
0
0

0

0
0
0

0
0
7
16

3

— Increased costs due to purchases of new vehicles during given year only.
2/
— Total increased costs due to controls for all cars and gasoline trucks on road for given year.
— Based on potential emissions as shown in Table III-l.
4/
Direct economic benefits larger than direct costs to owners
5/
Negative values indicate increases (which are results of controls on hydrocarbons and carbon mnnn*iM.
°-l Total use of unleaded gasoline assumed beginning 1975. It is assumed that only pre-1971 model autos will
be using extra cost high octane (greater than 91 RON) unleaded gasoline (2c per gallon extra).

-------
through 1976 will, however, produce significant reductions in mobile
source emissions.  If implementation of the standards is accelerated
or if the standards are increased in stringency,  it can be expected
that control costs will rise at  an accelerated rate.
                                  111-22

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                                REFERENCES
1.    Announcement from Office of the Secretary of Health, Education,
     and Welfare, released for publication July 15, 1970.

2.    Ward's 1970 Automotive Yearbook, Wards Communications, Inc., Detroit,
     Michigan, pp. 144 and 154.

3,    Based on data from U.S. Department of Commerce, Bureau of Public Roads,
     as reported in 1968 Automotive Facts and Figures, published by Automo-
     bile Manufacturers Association, Detroit, Michigan, 1968.

4.    Projected control techniques and prices based on surveys and interviews
     with industry representatives.

5.    S. P. Lawson, J. F. Moore, and J. B. Rather, Jr., "Added Cost of Unleaded
     Gasoline," Hydrocarbon Processing.  46 No. 6, June 1967.

6.    J. 0. Logan, President Universal Oil Products Co., (Testimony to Assembly
     Committee on Transportation of the California Legislature), Los Angeles,
     California, December 4, 1969, 20 pp.

7.   U. S. Motor Gasoline Economics, Bonner and Moore Association, Inc., for
     the American Petroleum Institute, Vol. I, June 1967, p. 2-32.

8.   Implications of Lead Removal from Automotive Full.  U.S. Dept. of
     Commerce Interim Report, June 1970.
                                111-23

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    APPENDIX 3Z




Stationary Sources

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                              Appendix IV

                         Stationary Sources

                          I.   INTRODUCTION

      The  purpose of this appendix is to present, on a source by
source basis,  the detailed analyses upon which the summaries
presented  in Chapters 4 and 5 are based.  For the solid waste dis-
posal and  stationary combustion categories, the discussion is
limited to the engineering analyses of the cost and emission esti-
mations.  Detailed economic discussion is not included because in-
depth economic impact studies were not performed for these sources.
For each of the industrial process sources, in- addition to the engi-
neering analyses provided, a discussion of the economic analyses per-
formed to  develop economic impact statements are also presented.*
Sources that shared product markets or were in other ways related
are discussed simultaneously.  The industries grouped together for
purposes of the analyses are petroleum refining and petroleum pro-
ducts and storage; phosphate fertilizer and elemental phosphorus;
and primary and secondary metallurgy.  Included in all of the discus-
sions of the industrial process sources is a statement defining the
scope and limitations of the economic analysis.
*  Sulfuric acid is an exception because an economic impact analysis
is being performed directly by APCO.
                                   IV-1

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                         II.  SOLID WASTE DISPOSAL

A.   Effect of Air Pollution Control Alternatives
     By 1976, the population of the 298 metropolitan areas should reach
186 million.  It is also predicted that the per capita generation of solid
waste will increase by approximately three percent per year.  In 1967, the
base year, the per capita per day generation of solid waste was estimated
to be 10.2 pounds.  Thus, it is estimated that 395 million tons of refuse
will be generated in 1976.
      For the purpose of estimating control costs, it is assumed that the
 following control alternatives would be used:  (1) electrostatic pre-
 cipitators to control particulate emissions in accordance with the New
 York State Particulate Emission Regulation for Refuse Burning Equipment
  (see Appendix II) on all municipal and 80 percent of the commercial
 incinerators onsite in 1967; (2) a sufficient number of new incinerators
 would be constructed to provide for incineration of 20 percent of all
 refuse; and  (3) all open burning would be discontinued in favor of
 sanitary landfills.
      By implementing this plan by Fiscal Year 1976, particulate emissions
 would be reduced from a potential of 1,500,000 tons to 185,000 tons,
 carbon monoxide from 5,450,000 tons to 414,000 tons, and hydrocarbons
 from 2,020,000 tons to 293,000 tons.  The emissions are therefore reduced
 by 87.7 percent, 92.4 percent, and 85.5 percent, respectively.
 B.   Engineering Basis of the Analysis
      1.   Methodology
           Air pollution control costs for solid waste were obtained
      by:
           a)   Determining the quantity and method of disposal of
                collected refuse.
                     The total collected refuse generated in any
                metropolitan area was computed on the basis of 5.5
                pounds per capita per day [Ref. 1].  Specific data for
                a metropolitan area were used when available.  The
                amount of refuse incinerated was obtained from incinerator
                listings obtained from previous studies [Ref. 2],  All
                incinerators were assumed to be operating at their

                                      IV-2

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       stated capacity, and the balance of the refuse which
       was not incinerated was assumed to be disposed of by
       other methods:  landfill, burning dumps, ocean dumping,
       composting, etc.  When no detailed information on the
       method of disposal existed, it was assumed that 33 per-
       cent of this remaining amount was open burned £Ref. 3],
 b)    Determining the quantity and method of disposal of un-
       collected refuse.
            Uncollected refuse was estimated using a rate of
       4.7 pounds per capita per day [Ref. 1],  This refuse
       was assumed to be presently disposed of by 50 percent
       landfill, 25 percent open burning, and 25 percent
       domestic and commercial incineration.
 c)    Determining incinerator control costs.
            All existing municipal incinerators must be up-
       graded to some extent to comply with regulations.
       The cost for this upgrading is presented in Table IV-1.
TABLE IV-1. - COST OF UPGRADING MUNICIPAL INCINERATORS
Year of
Construction
Before 1961
1961-1964
1965-1967
Cost of Upgrading
($ per daily ton of capacity)
Investment
500
400
200
Annual
360
330
310
 d)   Determining open burning control costs for collected
      refuse.
            All present open burning must be discontinued.   It
       was assumed that 25 percent of this amount would go  to
       new incinerators at a cost of $5,600 per daily ton for
       furnaces in the 300 ton per day or larger size, and
       $7,500 per daily ton for furnaces smaller than 300 tons
       per day [Refs. 3, 4, 5].  The annualized cost of operating
                           IV-3

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            an  incinerator was  based  on $6  per daily ton and 300
            days  per  year.   The remaining 75  percent of open burning
            would go  to  sanitary landfills  at an additional cost of
            $0.30 per ton.   This is the only  cost above that re-
            quired to operate a burning dump.   (See  Reference 3.)
            No  initial investment costs were  included since land
            and personnel for the burning dump  were  already on hand.
            In  metropolitan  areas where there are no municipal
            incinerators, all open burning would be  converted to
            sanitary  landfill;  that is,  no new  incinerators will
            be  built  in  these areas.
      e)     Determining  control costs for uncollected refuse.
                 Uncollected refuse control costs were based on all
            current open burning  (25 percent  of  all  solid waste)
            going to  sanitary landfill  at a cost  of  $0.40 per  ton,
            and existing incineration (also 25 percent of the  total)
            requiring  upgrading  at an investment  cost of $1000  per
            daily ton  of capacity with  an annualized  cost of  $259
            per daily  ton.   Presently,  twenty percent  of existing
            small incinerators were assumed to meet  the New
            York  State regulation, and  20 percent were assumed  to
            convert to landfill  at no additional  cost.
      f)     Determining  additional costs incurred by  1976.
                 These costs were based  on the 1967 disposal prac-
            tices , but were varied to accommodate population changes
            as well as a 3 percent yearly increase in  the amount of
            solid waste  generated per capita.  These  increases were
            then  treated in  the same manner as the 1967 values  to
            arrive at a  control cost.
     g)     Assuming that all California metropolitan  areas were
            controlled through local efforts and any  costs  incurred
           were not due to Federal action.
     The major single factor is the cost for new. incinerators  re-
quired to control 25 percent of the existing open burning.  The
high initial costs and  the high yearly  costs accounted for  about
                                IV-4

-------
50 percent of the total annual costs for  this metropolitan  area.
     The installation of electrostatic precipitators  (ESP's)  in
place of scrubbers on existing municipal  incinerators was also
investigated.  Annualized costs for ESP's are about 50 percent of
scrubber costs.  However, since no ESP's  are currently used for
controlling particulate emissions from incinerators, they were
not considered in this analysis.  Assuming  some  of the larger
incinerators were to go to ESP's as a means of control, a typical
metropolitan  area's  annualized cost would be reduced by about
10 percent.
     Cost estimates  for disposing of junked automobiles in  con-
trolled incinerators were based on an assumption that 50 percent
of these automobiles were now being open burned.  Based on  data
presented later in this section, the costs of controlling partic-
ulates from auto body incinerators would only add about 1 to 3
percent to the metropolitan area investment cost and even less to
the annualized cost.  Therefore, separate estimates of the  cost
of controlling junked auto disposals were not made because  the per-
cent contribution of these costs was less than the expected error
of the major  cost estimates.
2.   Control  Costs
     The following air pollution control costs were utilized in
estimating metropolitan area solid waste disposal expenditures.
     a.    Municipal Incinerator Control Costs
           Table IV-2 presents the cost of controlling municipal
     incinerators with wet scrubbers.
           Since installed costs did not vary by more than about
     10 percent, an  average cost of $500 per daily ton was used.
     For incinerators built between 1961 and 1964, 80 percent of
     the control costs were used.  For units built after 1965, a
     control  cost of $200 per daily ton was arbitrarily used since
     these units were assumed to have some type of acceptable
     control  device  already in place.
                              IV-5

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                   Annualized costs were based on a 13,3 percent capital charge

              and on the following operating cost equation ."[Ref. 6];
                       G = S  [0.745HK  (Z +
                                             + WHL + M] = 0.3985
                   where:  S = acfm;
                           H = 7200 hours /year;
                           K = $.01/kwh
                           Q = 0.01 gals/acfm;
                           2 = 0.006 hp/acfm;
                           W = 0.005 gals/hr acfm;
                           M = 0.03/acfm;
                           h = 30 feet;  -
                           1 = $0.5 x 10"°/gals.
                   Operating costs for a wide range of incinerator size were

              calculated and an average cost based on dollars per ton used

              for cost estimating purposes.

                   TABLE IV-2. - MUNICIPAL INCINERATOR CONTROL COSTS
Size
(tons/day)
50
100
200
300
500
600
700
1000
Flue Gas Volume
(1000 acfm)!/
40
80
160
240
350
420
420
600
Collection
Eff . (percent)
85
85
85
85
90
90
95
95
Installed Cost
($1000 total)!/
28
52
100
150
250
300
350
480
($/daily ton)
560
520
500
500
500
500
500
480
Annualized Cost
($1000)
20
39
77
115
172
207
213
302
($/daily ton)
400
390
380
380
340
340
300
300
For sizes 50*.- 300 tons per day, use 800 acfm/ton.
For sizes 500 - 600 tons per day, use 700 acfm/ton.
For sizes 700 tons per day and larger, use 600 acfm/ton.
-'  See Figure IV-1.

                  b.
                   Control Costs for Smaller-Sized Incinerators

                   A one ton per day model size unit operating for 5 hours per day

              and 360 days per year (1800 hours per year) was used as a base for calcu-

              lating control cost.  Installed cost of a scrubber for this size

              unit (400 pounds per hour capacity) designed to meet the New York
                                          IV-6

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1000
              A= Installed Cost—ESP
              B= Installed Cost—Scrubber
              C =* Annual Costs—Scrubber
              D= Annual Costs—ESP
 500

 400


 300



 200
 100
  50
                20
50            100          200
   Incinerator  Size (tons/day)
300  400 500   700    1000
                 Fig.  IV-1.  Municipal Incinerator Particulate Control Costs.
                                               IV-7

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          State regulation is about $1000.^  Particulate control efficiencies

          on the order of 60 to 80 percent are required.
               Annualized control costs were calculated as follows  [Ref.  7]:

                    G - S[0.7457HK  Z +  Qh   + WHL + M] = 920  (0.119)
                                        1980

                      = $109/year/daily ton

               where:
                                21
                    S - 920 acfrn—';
                    H » 1800 hours/year;
                    K - $0.01/kwh;
                    Z - 0.006 hp/acfm;
                    Q = 0.01 gals/acfm;
                    h = 30 feet;
                    W - 0.005 gal/acfia;
                    L - $0.05 x 10-3/gal;
                    M - $0.03/acfn.
                    Capital charges at 15%, (.15 x $1000) = $150/year/daily ton
                    TOTAL Annualized Cost = $259/daily ton

          c.   Auto Body Disposal Costs
               Calculations to determine investment and annual costs of auto

          body disposal for a metropolitan area are presented below.  A controlled

          incinerator handling 30 cars per day costs about $25,000  [Ref.  8].

               1)   Investment Cost:

                    Investment	$25.000	$  8/car/vear
                    Cost/Car    30 cars/day x 300 days/year   *Z'B/Car/vear-

                    Metropolitan Area _ metropolitan area population   27 cars
                    Investment Cost   ~           1000               X  1 year
                               3/
                         x O.SO^'x $2.8/car/year = $39/1000 population.

               2)   Operating Cost, assuming $4/car:

                    Metropolitan Area    metropolitan
                    Operating Cost    = area population x 27 cars/1000 population
                                            1000                 1  year
                               3/
                         x 0.50-'x $4/car = $56/1000 population/year.
•i'   An average value; control costs for small incinerators vary from
 $600 to $1300 per daily ton of refuse burned  [Ref. 9].

—I   Based on 16,000 ft3 of flue gas per 10  Btu of heat input, and  5000
Btu/lb of refuse.
          5000 Btu x 4000  Ib/hr x JL_        x 16.000 ft3  - 535 ft3/min at 70°F,
               lb.                60 min/hr   10b Btu

               or about 920 acfm at 450°F.

—'    Assuming 50 percent  of all scrapped cars are presently being burned.

                                   IV-8

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                All uncontrolled emissions were based upon the emission
           rate shown in Table IV-3.
TABLE IV-3. - EMISSION RATES FOR VARIOUS SOLID WASTE DISPOSAL PRACTICES^'
                                                                       I/
Process
Open Burning
Municipal Incinerators
Domestic & Commercial
Incinerators
Sanitary Landfill
Particulate
17
17
12
0
21
Hydrocarbons—
30
1.5
7
0
Carbon
Monoxide
85
1.0
15
0

 c«
Pounds per ton of refuse.
As Methane.
Cost of Control
     The total investment requirement for implementing this plan would
be $201 million and the annual cost, as of FY 1976, would be $113 million.
These costs are in addition to expenditures for control before 1967.
                                    IV-9

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                    III.  STATIONARY FUEL COMBUSTION

A.   Commercial-Institutional Heating Plants
     1.   Present and Projected Emissions
          In 1967, there were approximately 952 thousand heating plants
     in commercial-institutional establishments (hotels, retail stores,
     schools, hospitals, etc.) located within the 298 metropolitan
     areas.  These heating plants consumed 4.3 million tons of coal, 267
     million barrels of oil, and 1.58 trillion cubic feet of gas in 1967.
     The combustion of these fuels resulted in emissions of 127 thousand
     tons of particulate matter and 940 thousand tons of sulfur oxides.
     Current emissions from these plants are under little or no control.
          It is assumed that no additional coal-fired commercial-
     institutional heating plants were or will be built during the
     period from 1967 through Fiscal Year 1976.   Consumption of oil and
     gas by such heating plants is expected to increase to 417 million
     barrels and 3.64 million cubic feet, respectively.   The average
     value of the sulfur content of the fuel oil is assumed to be one
     percent by weight.
          Given these fuel use patterns, it is estimated that annual
     emissions from commercial-institutional heating plants in the 298
     metropolitan areas would reach 152 thousand tons of particulate
     matter and 1,440 thousand tons of sulfur oxides by Fiscal Year 1976.
     2.   Control of Emissions
          It appears that control of sulfur oxides and particulate
     emissions from commercial-institutional heating plants in the 298
     metropolitan areas can be accomplished by Fiscal Year 1976 by
     switching those plants currently using coal as a fuel to the use of
     oil.
          Through such fuel switching, emissions would be reduced to 135
     thousand tons of particulate matter and 1,400 thousand tons of sulfur
     oxides.   The reductions are rather small because, even without fuel
     switching,  it is expected,  first, that little coal would be burned
     in such heating plants in Fiscal Year 1976  and, second, that all the
     oil utilized would meet the standards listed in Appendix II.
                                  IV-10

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     3.   Engineering Basis of the Analysis
         Particulate and SO- emissions were calculated for the 298
     metropolitan areas using the uncontrolled emission rates shown
     in  Table  IV-4.
        TABLE  IV-4.  - UNCONTROLLED EMISSION RATES FOR COMMERCIAL-
                       INSTITUTIONAL SPACE HEATING
Fuel

Coal
Oil

Gas
Emission Rates
Particulate

20 Ibs./ton
8 Ibs./lOOO gal.

19 lbs./106 cf
so2
*
38 (S) Ibs./ton
157 (S)* Ibs./lOOO
gal.
1.4 lbs./106 cf
B.
* (S)  is sulfur content of fuel expressed as a percent.
       The incremental fuel costs were based upon a factor of $3.93
  per ton of coal replaced.  This factor reflects both the increased
  cost of oil on a B.t.u.  basis plus a low sulfur oil premium.
  4.    Estimated Control Costs
       It is estimated that the investment required to change the
  estimated 21 thousand existing coal burning heating plants  over  to
  oil will be almost $41.7 million, a unit conversion cost of $2,000.
  The total annual cost, including both the incremental fuel  costs
  (on a B.t.u. basis) and the annualized cost of the initial  invest-
  ment, will be $25.1 million per year.
  Industrial Boilers
  1.    Present and Projected Emissions
       In 1967, there were an estimated 307 thousand industrial
  boilers in the United States, with an estimated 256  thousand
  located within the 298 metropolitan areas.   These boilers supply
  steam for material processing, space heating,  and electric-power
  generation and annually  consume 45 million tons of coal  and 162
  million barrels of oil,  as well as a significant  quantity of
  natural gas.   Emissions  from these boilers,  assuming  an  estimated
                                 IV-11

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     61.5 percent control level for participates and zero for sulfur
     oxides, amounted to 1,360 thousand tons of particulates and 2,330
     thousand tons of sulfur oxides.
          Of the oil consumed, approximately 81 percent is residual
     oil with an average sulfur content of 1.5 percent; the remaining
     19 percent is distillate oils with a sulfur content averaging 0.5
     percent.  By Fiscal Year 1976, the annual consumption of coal is
     expected to drop to about 38 million tons, with the usage of oil
     increasing to 220 million barrels.  It is expected that a signifi-
     cant percentage of the additional oil will be of an acceptable
     sulfur content of not more than 1.38 percent.
          By Fiscal Year 1976, without implementation of the Clean Air
     Act, emissions from industrial boilers within the 298 metropolitan
     areas could be expected to reach 1,410 thousand tons of particulate
     matter and 2,310 thousand tons of sulfur oxides.
     2.   Control of Emissions
          Control costs were estimated on the basis of switching existing
     coal burning boilers to oil as well as the additional fuel costs
     of switching from coal and high-sulfur fuel oil to oil with a
     sulfur content of not more than 1,38 percent.  Under this plan
     emissions would be reduced to 142 thousand tons of particulate
     matter and 1,100 thousand tons of sulfur oxides, 99.0 percent and
     50.5 percent reductions, respectively.
     3.   Engineering Basis of the Analysis
          Emissions from industrial boilers within the 298 metropolitan
     areas were calculated on the basis of the emission rates shown in
     Table IV-5.
          TABLE IV-5. - EMISSION FACTORS FOR INDUSTRIAL BOILERS
Fuel
Coal
Oil
Gas
Emission Rates
Particulate
9 (A)-' Ibs/ton of coal
19 lbs/1000 gals, of
oil
19 Ibs /IQ6 cf gas
so2
38 CS)-^ Ibs/ton of
coal
157 CS) lb-s/1000
gals, of oil
1.4 Ibs /106 cf gas
I/
—    Ash content expressed as a percent.  An average value of 8 was used
in this study.
2 /
—    Sulfur content expressed as a percent.
                                     IV-12

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          The incremental annual fuel costs were based on a factor of
     $0.152  per million B.t.u.  This value is based upon a $0.09 per
     million B.t.u.  additional cost of burning oil of high-sulfur
     content instead of coal plus a $0.062 per million B.t.u. charge
     for oil desulfurization.
     4.    Estimated Control Costs
          These, controls are estimated to require an investment of
     $16,500 per boiler for a total investment of $1,050 million with
     a total annualized cost of $555 million.
C.   Residential Heating Plants
     1.    Present and Projected Emissions
          The population of the 298 metropolitan areas in 1967 was
     approximately 166,882,000.  An estimated 47 million dwelling units
     housed  this population.  For the purposes of residential heating
     in 1967, 7.6 million tons of coal, 343 million barrels of distillate
     oil and 2.5 trillion cubic feet of natural gas were consumed.
     Combustion of these fuels resulted in annual emissions of 160
     thousand tons of particulates and 776 thousand tons of sulfur
     oxides, with only coal burning exceeding the maximum limit of the
     selected regulations Csee Appendix II).
          Recent trends indicate that the use of coal as a home heating
     fuel is diminishing dramatically.  In the United States in 1967, an
     estimated 22 million tons of coal were consumed for this purpose
     whereas it is projected that less than 9 million tons will be con-
     sumed in Fiscal Year 1976.  There also is predicted diminishing
     utilization of distillate oil, although less dramatic than the
     reduction in coal usage.  The increased use of natural gas and
     electrical heating is expected to supplant these fuels and meet
     the additional home heating requirements predicted by Fiscal Year
     1976.  By that time, emissions will be reduced to 120 thousand
     tons of particulates and 597 thousand tons of sulfur o-xides.
     2.    Control of Emissions and Estimated Control Costs
          Because the utilization of coal for residential heating is
     decreasing by "natural attrition" and because all the other modes  of
     home heating fall well within the emission standards, no control
     costs are assigned to this source category.
                                   IV-13

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          By Fiscal Year 1976, the emission of particulates and sulfur
     oxides will be reduced to 120 thousand tons and 597 thousand tons,
     respectively.  The source of about 75 percent of each of these
     emissions will be the combustion of low-sulfur content distillate
     oil which currently meets the most stringent combustion standards.
     3.   Engineering Basis of the Analysis
          Emissions from residential heating plants within the 298
     metropolitan areas were calculated on the basis of the emission
     rates in Table IV-6.
       TABLE IV-6. - EMISSION RATES FOR RESIDENTIAL HEATING PLANTS
Fuel

Coal


Oil

Gas

Emission Rate
Particulate

20 Ibs/ton of coal


12 lbs/1000 gals.
of oil
19 lbs/106 cf. of
gas
so2
*
38 CS) Ibs/ton of
coal
*
157 (S) lbs/1000
gals, of oil
0.4 Ib /106 cf.
of gas
    *Sulfur content expressed as a percent.
D.   Steam-Electric Power Plants
     1.   Present and Projected Emissions
          In 1967, there were 516 investor and municipally owned (public)
     fossil fuel steam-electric power plants  of  25 megawatts  or greater
     capacity in the United States.   These plants contained 2,984 steam
     boilers and consumed 270 million tons of coal and  6,753  million
     gallons of residual fuel oil.   Within the 298 metropolitan areas,
     there were 387 power plants in which  2,060  boilers were  located;
     this does not include the Tennessee Valley  Authority power plants.
          On an annual basis, it is  estimated that 1967 particulate and
     sulfur oxide emissions from the power plants located in  the 298
     areas amounted to 1,60.0. thousand and  7,370  thousand  tons,  respectively.
     In spite of a particulate control level  of  78 percent, these emissions
     accounted for 49.3 percent of all particulates.  and 64,6  percent pf all
     sulfur oxides from fuel combustion sources  in the  298 metropolitan
     areas in 1967.
                                    IV-14

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         Without the implementation  of  the Clean Air Act,  emissions  of
    particulate matter and sulfur  oxides would  reach 1,980 thousand  tons
    and 10,100 thousand  tons, respectively,  by  Fiscal Year 1976.
    2.   Control of Emissions
         In power plants utilizing high sulfur  coal and/or residual
    fuel oil, having a rated capacity in excess of  200 megawatts, and
    with an overall plant load  factor in excess of  17 percent,  it was
    assumed that wet limestone  injection scrubbing  systems would be
    installed to provide for the simultaneous control of particulate
    matter and sulfur oxides.   Depending on the number and size of
    individual boilers within each plant,  one or more wet  limestone
    scrubbers would be required;  control costs  and  emission reductions
    have been calculated accordingly.   For high sulfur coal and residual
    oil burning power plants of less than  200 megawatts capacity or
    plants operating at  less than a  17  percent  load factor, it was
    assumed that it will be more economical to  replace these fuels
    with low sulfur fuels.  The premiums assigned to the use of low
    sulfur fuels were 90 cents  per ton  of  coal  and  80 cents per barrel
    of oil.  Such a fuel switch is consistent with  currently projected
    availability patterns for low sulfur fuels.   With implementation
    of the Clean Air Act, the Fiscal Year  1976  emissions of particulates
    and sulfur oxides would be  reduced  to  533 thousand tons and 1,600
    thousand tons, respectively.
    3.   Engineering Basis  of  the Analysis
          The engineering analysis required to develop control  costs
     for  the steam-electric  industry  had three basic APCO guidelines:
     (1)  be as  effective as  possible in reducing sulfur oxide emissions,
     (2)  consider the  latest technology, and (3) be  realistic with regard
     to availability,  cost,  and  fuel market impact.   Preliminary consid-
     eration of  an across-the-board switch  for high-sulfur  coal and oil
     and  low-sulfur fuels was unfeasible in light of present supplies as
    well as other constraints.-'  Consideration of  hardware control  of
     sulfur oxide indicated  that among the  dozen or  more processes being
     studied, wet limestone injection scrubbing  systems seem to be the most
    promising  alternative.-1  For the purposes  of this report, therefore,
-^   See Appendix V for a full discussion of this subject.

-    Supplied by APCO.                IV-15

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  use of several control alternatives including some fuel switching and
  wet limestone scrubbers was  assumed.   Table IV-7 below indicates the
  control alternatives finally selected.
      TABLE IV-7. - CONTROL ALTERNATIVES SELECTED FOR THE
                STEAM-ELECTRIC INDUSTRY
Industry
Fuel Type
Coal
Coal
Coal
Coal
Oil
Oil
Oil
Oil
Natural Gas
Sulfur
Content
(percent)
*
> 1
> 1
> 1
* 1
> 1.38
> 1.38
> 1.38
< 1.38
N/A
Plant Capacity
(megawatts)
>200
>200
<200
Any
>200
>200
<200
Any
Any
Plant Load
Factor
(percent)
>17
<17
Any
Any
>17
<17
Any
Any
Any
Control
Alternative
Wet limestone
scrubbing
Low-sulfur coal +
Part, collection
Low-sulfur coal +
Part, collection
Part, collection
Wet limestone
scrubbing
Low-sulfur oil
Low-sulfur oil
No change
No change
> Greater than.
< Less than.
        The choice of the 200 megawatt  criterion was based  upon the
   fact that in 1968 power plants  rated at  less than 200 megawatts
   consumed 33.3 million tons of coal.   Based  upon the National Academy
   of Engineers  estimate that present pyrite washing techniques could
   add annually  over 50 million tons of low-sulfur coal to  the  market,
   this criterion appears to be reasonable.  The load factor  of 17
   percent was chosen as a threshold for economic  reasons.  The wet
   limestone scrubbing process  appears  more economical than fuel
   switching for plants with load  factors in excess of 17 percent [Ref.10],
        For the  purpose of cost estimation, incremental costs for
   desulfurized  coal and oil were  required.  An additional  cost of 90
   cents per tons of coal was utilized  based upon  a recent  National
   Academy of Engineers Report  [Ref. 11].  An  additional  cost of 80
   cents per barrel of residual oil was utilized  [Ref. 12].  Both figures
                                  IV-16

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    represent  the higher end of the ranges given by the sources but were
    considered the most realistic estimates available.  Desulfurizing
    would  reduce the sulfur content of both fuels to about one percent
    or  less.
         The  cost estimating procedure for the dolomite-injection/ wet
    scrubbing process used cost equations developed by APCO.  The equa-
    tions, as shown below, are valid for capacities between 25 and 1,000
    megawatts (MW) and for a load factor of 91 percent.   They also assume
    stack gas reheat to 250  F by indirect liquid gas method and two stage
    scrubbing.
          Investment Cost  ($1000) = 10,800(MW) - 4.58(MW)2 + 934(.S) (MW)
                            - 0.396(S)(MW)2, and
          Annual Cost ($1000) = L[112.7(MW)S - 8.33(MW)]+ 1.3M
                                [.018(MW) + .595(8 + .0015(MW)S + 7.38]
                                + 1.2W [.36S(MW)] + 1.2K [.0548(MW)
                                - .00945S(MW) + .0020(MW)S2]  + T[11.799(MW)
                                - .00536(MW)2] + C[Investment Cost]
                                + 1.2[322.57(MW) - .14376(MW)2 + 29.46(MW)S
                                - .01313S (MW)2];
          where:
                 MW = Megawatt rating;
                  S = Sulfur content of fuel as a percent;
                  L * Limestone cost, $/ton;
                  M = Cost of labor, $/1000 man-hours;
                  W = Cost of water, $/10  gals.;
                  K = Cost of electricity, $/10  kwh;
                  T = Cost of technical labor, $/man-hour; and
                  C = Annual capital charges as a percent of fixed investment,
                      as  a decimal.
       The values assigned to these variables are as follows:
                             6/
            MW - Plant  data,-
             S - Plant  data,—
             L -  $2.05,
             M -  $4000,
             W - .$100,
             K -  $4000,
6/
-    Supplied by APCO.
                                   IV-17

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        T -  $7.50,  and
        C -  14.5%.
        The  above relationships  can be  applied  to  oil burning installations
   with  two  modifications:   the  oil sulfur  content must  be divided by 1.35
   and the megawatt rating must  be multiplied by 0.95.
        If the  power plant load  factor  is different  from 91 percent,
   corrections  must be made  to the annual cost  as  developed in the above
   equation.  Correction  factors were developed separately for three  load
   factor ranges and for  coal and oil boilers.  The  correction factors  (C.F.)
   are stated as a  function  of load factor  (L.F.)  and uncorrected  annual
   cost  (X).
        For  coal boilers:
            1.  64% < L.F. 1100%
        C.F. .  |91% TL.P. (.00855) (X) + X] x
            2.  33%±L.F. ±63%
        C.F. =  [1. 230000 +  (63% - L.F.).0256(X)] x
            3.  17%lL.F. 132
        C.F. =  £2.024600 +  (32% - L.F.) .0967 (X)] x
        For  oil boilers:
            1.  64%iL.F. 191%
        C.F. -  [(91% - L.F.) (.0085500 + X] x bb*;*
                                               J-Zj
            2.  33% 1L.F. 163%
       C.F. = [1.230900 + (63%- L.F.) (.0256) (X)J x
            3.  17%1L.F. 132%
       C.F. = [2.0246(X) + (32% - L.F.) (.0967) (X)] x
4-   Estimated Control Costs
     Based upon the low sulfur fuel price premiums discussed above,
as well as preliminary cost data for wet limestone scrubbing systems,
control costs by Fiscal Year 1976 for all high-sulfur coal and oil
burning plants within the 298 metropolitan areas were calculated.
These are an investment requirement of $1,340 million and a total
annual cost of $426 million.  These costs would increase electric
energy costs to the average consumer by 2 percent.
                             IV-18

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                    IV.   INDUSTRIAL PROCESSES

A.  Asphalt  Batching
    1.     Introduction
          The road paving material commonly called asphalt (more
    technically known as asphalt concrete, and often referred to as
    hot mix  asphalt paving in the industry) is a heated mixture of
    crushed  stone aggregate and asphalt.  It is most commonly produced
    by  a batch process with an estimated average production rate in the
    range of 150-200 tons per hour.  Crushed stone or other aggregate is
    mixed and dried in a drying kiln and fed into a pugmill where it is
    mixed with asphalt.  This hot mix is loaded into trucks for quick
    delivery to the work site where it is applied while still hot.
    2.     Emissions and Costs of Control
          The asphalt batching process emits pollutant emissions
    in the form of dust particulates,  emitted primarily by the aggregate
    drier and to a lesser extent by the conveying, screening, weighing,
    and mixing equipment.  General industry practice is to combine the
    off gases from the drier and the emissions from other process points
    as collected in a ventline and send the combined gas stream through
    a cyclone dust collector [Ref. 13].  This results in approximately
    80 percent removal of dust, reducing the estimated average 25 pounts
    of dust per ton of asphalt batched  [Ref .14] to 5 pounds per ton remain-
    ing as uncontrolled emissions.  The 1967 industry total of 452,000
    tons of particulate would increase to 571,000 tons in Fiscal Year 1976
    at the same level of controls.
         To meet  the process weight rate standards assumed for this
    study (see Appendix  II), venturi scrubbers with a 10 inch water
    gauge pressure drop have been  stipulated for  all plants.  The
    investment requirement  estimated for these controls is $15,4 -million
    and the annual costs are $12.3 million, beginning in Fiscal Year
    1976,
                                    IV-19

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3.   Engineering Basis of the Analysis
     The processes considered in this study include the major
source of dust in the industry, the aggregate drier, as well as
secondary sources, which include aggregate elevators, vibrating
screens, hot aggregate bins, weigh hoppers and aggregate mixers.
The trend in the industry is to combine the off gases from the
drier and all the secondary sources (captured in a so-called vent-
line) and send the resulting gas stream to a single collector.
     Uncontrolled emissions amount to 25 pounds of dust per ton of
asphalt size distribution of particulates batched [Ref. 14].  Pres-
ently, it is estimated that the industry as a whole controls to a
level of 80 percent; therefore, present emissions which are considered
herein as uncontrolled amount to 5 pounds per ton of asphalt
produced.  Required removal efficiencies were calculated on the
basis of the process weight rate standard and an uncontrolled rate
of 5 pounds per ton.  These are shown in Table IV-8.

   TABLE IV-8. - INCREMENTAL REMOVAL EFFICIENCIES REQUIRED
Process Size
(tons /hour)
40
100
150
200
Incremental
Efficiency Required
(percent)
79
91
93
95
     In order to meet these control requirements, it appears that
the application of a 10-inch w.g.  wet scrubber is cost effective.
Table IV-9 summarizes control costs as a function of plant capacity
and related gas volume.
     Venturi scrubbers with a pressure drop of 10 inches, w.g., will
achieve required removals [Ref. 13].  In all cases, an 80-percent
efficient primary collector was considered as process equipment.
                               IV-20

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    TABLE IV-9. - ASPHALT  BATCHING EMISSION CONTROL COSTS
Kiln Gas Volume
(103 acfm)
6
12
18
20
30
36
42
48
54
60
66
72
Equivalent Plant
Capacity
(tons of mix per hr.)
30
60
90
120
150
180
210
240
270
300
330
360+
Costs
($1000)
Inves tment
4.0
5.9
7.3
8.8
9.6
10.5
11.6
12.6
13.6
14.7
15.6
16.4
Annua]
2.7
4.0
5.3
7.0
8.2
9.6
11.0
12.1
13.3
14.1
15.3
18.4
      To  relate process  size to control system size,  a  factor of
 19  thousand  scfm (at an inlet  temperature of  200   F) per 100 tons
 per hour were  used [Ref.  15].
 4.   Scope and Limitations  of Analysis
     Data on the location of plants were  incomplete.  However,  detailed
 data on plant capacities and production were incomplete; these data
were estimated by  applying  the known distribution of plant sizes in .
 38 states to the known number of plants in the metropolitan areas.
Financial data by  plant or  firm were even more fragmentary and similar
 estimating procedures were  used.  As a result, estimated industry
 costs may be somewhat in error, probably understated to a degree.
The figures given  are, however, felt to indicate the order of magni-
tude of industry cost impact and to reflect a reasonable approximation
of the control cost per ton of product.
                               IV-21

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5.   Industry Structure
     The asphalt batching industry, .which has 1,284 plants  in  the
United States and 1,064 in the 298 metropolitan areas, is charac-
terized by a large number of relatively small firms, many with only
one plant and others with two or three plants.  Most of the firms
are small in comparison with the giant firms of some of the other
industries in this study.  Sales average close to $500,000 per year
per plant.  Most firms are closely held and the profits of a typical
firm apparently support only one or a small number of owner-managers.
Firms are widely dispersed across the country, mostly close to urban
markets.  Because of the necessity to deliver hot asphalt paving to
the job site, plants can serve only a very limited geographic  area.
As a result, some plants have been designed to be mobile, moving from
job to job.  Most installations can be shut down and moved to  new loca-
tions with relatively small cost.  Resources used in the process (sand,
crushed aggregate, and asphalt) are available almost anywhere.
6.   Market
     The market for asphalt paving mixtures is largely a function of
road building and maintenance programs.   Generally,  such projects are
contracted on a competitive bid basis.  In the larger metropolitan
areas, at least, this results in aggressive competitiion among firms
and acts as a limiting force on profits.   The degree of competition,
size of the market, and growth in number and size of firms vary con-
siderably across the country and from year to year,  depending upon
regional policies and spending programs.
     The chief competitor to asphalt paving is concrete.   Asphalt
paving, however, is usually cheaper and  simpler to install,  although
the concrete industry challenges asphalt on the basis of whole-life
cost,  including maintenance.  In minor markets such as driveways,
ready-mixed concrete firms are reported  to have had some success in
competing with asphalt when special promotional campaigns have been
undertaken [Ref. 16].
                                IV-22

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7.   Trends
     It is expected  that  capacity  and production in asphalt
batching will grow at the rate of  approximately 3.1 percent per
year through Fiscal  Year  1976,  continuing  the pattern  of  the 1960's.
This would reflect a continued growth in government expenditures
for highway building, although shifts in market location  may be
expected as construction  of  the interstate system slows and the
emphasis shifts  to secondary and urban roads  and airports.
8.   Economic Impact of Control Costs
     This analysis indicates that  by  Fiscal Year 1976  total annual
pollution control costs to the asphalt batching industry  will run
at the rate of $12.3 million per year.   For an estimated  Fiscal
Year 1976 production of 227  million tons,  this indicates  an incre-
mental cost of only  $0,054 per ton.   Assuming approximately 800
firms in the 298 metropolitan areas,  the estimated annual cost for
the average firm would be $15,375.   If a typical firm has sales of
$500,000 per year and profits before  taxes of 12 percent  of sales,
or $60,000, absorption of the increased cost  would reduce profit
by one-third.  These firms may be  expected, therefore, to try
to raise prices  by the full  amount of the  added cost.  In a small
market, where sales  are almost entirely based on competitive bidding,
these price increases would  be difficult to achieve unless almost
all firms are subject to  the same  cost changes.   This apparently
would be true for most of the asphalt industry and prices may
therefore rise $0.05 to $0.06 per  ton.   Although this is  a small
amount per ton of paving  material,  it does imply an increase of
approximately $12.3  million for the nation as a whole  as  an equiv-
alent increase in public  expenditures.
     It is to be expected that all producers  in a region  or market
will tend to postpone installation of new  equipment  as long as possible
so as to avoid incurring  this cost before  competitors.  When regulatory
orders force compliance,  most firms will act  at the same  time.  If this
occurs, there is little reason to  anticipate  financial difficulties for
the firms involved,  except for those  whose sources of  credit make it
difficult to raise the funds for an investment estimated  to average
approximately $19,000 per single plant firm.
                                IV-2 3

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B.   Brick and Tile
     1.    Introduction
          The brick and tile industry,  represented by Standard Industrial
     Classification (SIC) Code 3251, includes those establishments primarily
     engaged in manufacturing brick and structural clay tile.  The processes
     involved in manufacturing brick and related products include: grinding,
     screening, and blending af raw materials;  forming; drying or curingj
     firing; and cutting.  After the clay has been mined, it is transported
     to plant storage bins where the clays are blended to produce a more
     uniform raw material, control color, and allow raw material suitability
     for manufacturing a variety of units.  Preparation of the raw material
     to produce brick and tile involves crushing the clay to remove large
     chunks, followed by grinding.  The clay is then screened and the form-
     ing process begins.  Water is added to the clay in a pugmill, a mixing
     chamber containing two or more revolving blades.   The clay is then molded.
     Before the burning process begins, excess water is evaporated in drier
     kilns at temperatures ranging from 100° to 400° F for a period of 24 to
     48 hours, depending on the type of clay.  Heat may be generated primarily
     for drier kilns but it is commonly supplied as waste heat from burning
     kilns.  Burning is one of the most specialized steps and requires 40 to
     150 hours depending on kiln type and other variables.  Several types of
     kilns are used, the chief types being tunnel and periodic.  Natural
     gas, oil, or coal is used as fuel, and temperatures up to 2400° F are
     used in firing.  Dried units are placed in periodic kilns permitting
     circulation of hot kiln gases.  In tunnel kilns,  units are loaded on
     special cars that pass through various temperature zones as they travel
     through the tunnel.  Drying occurs in the forward section of the kiln,
     utilizing heat from the combustion gases to preheat and dry the formed
     clay as it moves toward the firing section.  The heat required per ton
     of brick produced is 3-4 x 10  B.t.u.'s.  The cooling period requires
     48 to 72 hours.
     2.    Emissions and Costs of Control
          Particulate emissions in the brick and tile industry are in the
     form of dust from the blending, storage, and grinding operations and
                                   IV-2 4

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off-gases from the tunnel kilns.  Particulates  from blending, storage
and grinding are minimized  by sufficient moisture and these emissions
are well within the limits  set by the particulate  standards.  Particu-
lates from the kiln are mainly a combustion product and are  a function
of the fuel used.
     Sulfur dioxide may be  emitted  if firing  temperatures reach 2500° F
or more or when using fuel  containing sulfur  [Ref. 28].  As  stated pre-
viously, firing temperatures  do not normally  exceed 2500° F.  In general,
the fuel used is either oil or natural  gas with acceptable sulfur content.
Emissions of sulfur dioxide,  therefore, were  considered to be negligible.
     Fluorides, emitted in  a  gaseous form, result  from heating clay con-
taining fluorides.  Data on the fluoride  content of clay are very sketchy.
There is evidence that not  all clay contains  fluorides and where there is
no fluoride content, fluoride emissions  are no  problem.  This may occur
on a region wide basis where  a number of  plants use clay of similar or
the same geologic origin.   In this  analysis,  in order to assess the impact
expected, it is assumed that  clay contains fluorides in proportion to the
average fluoride content of all clays and that  fluoride emissions of 1.23
pounds per ton of clay result [Ref. 28].  At  present, it is believed that
fluoride control is not practiced anywhere in the  industry.  On this
basis, fluoride emissions estimated for the 298 metropolitan areas for
1967 were 15,600 tons with  no controls.   At the rate of growth estimated
for the brick industry, these fluoride  emissions would reach 20,800 tons
in Fiscal Year 1976 without controls.
     Fluoride emissions can be reduced  to very  low levels by scrubbing
the kiln gases with water.  This also serves  as a  particulate control
method.  For the purposes of  this report  a fluoride control standard
requiring 95 percent removal  efficiency is assumed.  A single cyclone
scrubber can remove fluorides at an efficiency  in  excess of 95 percent.
This control level would reduce Fiscal  Year 1976 fluoride emission to
1,000 tons and would require  investment and annual costs of $40.8
million and $11.6 million,  respectively.
3.   Engineering Basis of the Analysis
     Assuming that no coal  is being used in the industry, particulate
emissions are well within the limits set  by this year's particulate
standards.  Therefore, particulates as  such need not be considered.
However, since some entrainment of  fluorides  by the combustion

                            IV-25

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particulates can be expected, some form of participate control should
be implemented.  As will be shown, the control device selected for the
control of gaseous fluorides will also act as a particulate control
device.
     Costs have been developed for a fluoride emission control system
composed of a single stage wet cyclone scrubber connected by ductwork
to a typical tunnel kiln.  These are shown in Figures IV-2 and IV-3
as a function of brick making capacity.  This control system can remove
gaseous fluorides with an efficiency in excess of 95 percent as well as
removing particulates, in the case of coal combustion, to a level of
90 percent.  Therefore, with the predominant fluoride emission being
gaseous, the system can easily remove 95 percent of total fluoride
emissions.
4.   Scope and Limitations of Analysis
     Detailed and accurate data on firms in this industry and their
plant production and operations were not available during the prepara-
tion of this report.  Therefore, some of the statistics used may not
be absolutely accurate but it is believed that the analysis is
sufficiently valid to determine the economic impact of air pollution
controls.  It was not possible, however, to relate projected costs
directly to the operation of typical firms or to regional market and
price variations.
     The question of the fluoride content of the clay used in brick
making in the United States (discussed briefly in the previous section)
casts doubt on the control cost estimates made.  It seems probable that
the fluoride emission estimates and the corresponding estimates of
control costs are exaggerated.  The extent of the exaggeration will not
be known until more data are available on the fluoride content of the
various clays used by the industry.
5.   Industry Structure
     In 1967 there were 469 firms in the United States with 301 in the
298 metropolitan areas.  United States production was 8,260 million
brick and common brick equivalents having a value of $342.1 million.
Production within the 298 areas was 5,910 million brick equivalents,
72 percent of the United States total.  These firms average about 57
employees each and on the average produce 17.6 million brick and brick
                              IV-26

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 300

  2.5

 200


   1.5
D
D
3
100
 90
 80
 70

 60

 50

 40


 30

 2.5

 20


 1.5
   10
                                i.iil
                                          I
11
    10      1.5   20  2.530  40  5O 60   80  100    1.5  2002.5300

                        KILN CAPACITY  - TONS BRICK  PER DAY
                                                                      500  700
        Fig.  IV-2.   Brick and Tile Installed and Purchase Costs of Control
                                Systems [Ref.  28].
                                       IV-2 7

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   50
    40
§   30
O
o


o

8   20
    10
     0
      0
    100           200          300


KILN CAPACITY -  TONS  BRICK PER DAY
400
   Fig. IV-3,  Brick and Tile Annualized Cost of Control Systems  [Ref. 28]
                                 IV-2 8

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equivalents having a value of  $729,400.  However,  120  of  these  firms
or about 25 percent had fewer  than  20  employees  indicating  there  are
a number of marginal firms.  Since  1958, 85  firms  either  have gone out
of business or consolidated with  other firms.  Consolidation has  been
the trend in this industry as  in  other industries.  Value of output
in 1967 per production worker  was $15,700, which is low compared  to
other industries.  This has increased  from $10,600 in  1958  and  $13,200
in 1963.
     Texas has more plants than any other state  with 44 plants, followed
by Ohio with 41 plants; Pennsylvania is  third with 33  plants.
6.   Market
     The construction industry purchases about 97 percent of the  out-
put of the brick and tile  industry.  The performance of the brick and
tile industry is therefore closely  related to construction  activity
and more specifically to residential construction.  Production  increases
and decreases as residential building  increases  or decreases.   Even in
residential construction these products  are  a rather negligible cost.
Their use  is influenced more by taste  and the cost to  install than by
the cost of the item itself.
     Because of the weight and bulk of brick and tile  products, markets
are regional in character  rather  than  national.  Intra-product competi-
tion is as much on specialty items,  style, finishes, and  color as on
price.  There are enough firms in most market areas to assure that
prices cannot get out of line.
     The major competitor  to the  industry is other building materials.
Products such as concrete, wood,  aluminum, asbestos, glass, steel and
plastics compete in two ways.  First,  they compete directly on initial
price.  Second and more importantly, they compete on cost in place, a
concept that includes both cost of  material  and  cost of installation
labor.  Such competition limits the possibilities for  brick and tile
price increases.
7.   Trends
     Between 1958 and 1967, the value  of new public and private building
construction grew at an annual rate of 5.3 percent.  During this  same
period, brick and tile shipments  increased by only 2.8 percent  per year.
The disparity in these rates of growth primarily reflects the declining
usage of brick.
                               IV-29

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     The principal reason for the decline in the utilization of brick
appears to be the cost of brick-in-place.  Between 1959 and 1969, the
cost of brick increased 22 percent compared with the 17 percent
increase in the cost of all construction materials.  Furthermore, in
the same period, the average wage rate for union bricklayers increased
at a rate over twice the rate of increase in brick prices.  Assuming
no increase in the productivity of bricklayers over the last decade
(indeed, it is frequently alleged that union restrictions have reduced
the number of bricks per day a bricklayer can lay), a cost index for
brick-in-place shows about the same rate of growth as the average
wage rate for bricklayers.  This results because labor represents
about 75 percent of the cost of brick-in-place.
     Thus, it would appear that any increase in the cost of brick
production which was passed on as a price increase of brick would
aggravate the trend away from the use of brick in new construction
and further limit brick production.
8.   Economic Impact of ControlCosts
     The analysis indicates that by Fiscal Year 1976 total annual control
cost to the brick and tile industry in the 298 metropolitan areas
will run at the rate of $11.6 million per year.   For an estimated
1976 production of 6.6 million brick and brick equivalents, an
incremental cost of $1.76 per thousand brick is indicated.  For the
301 firms in the 298 metropolitan areas, the estimated annual cost
for the average firm would be $38,500.  Few firms in this industry
can afford a cost increase of this nature entirely from profits.  At
the same time because of the competitive position of brick among
building materials and its declining market share, it is doubtful that
a cost increase as small as this could be passed on in full to consumers
as a price increase without further loss of markets.  Thus, while prices
may be expected to rise, due to the added cost of air pollution control,
above the level they would otherwise achieve by 1976, the rise is
expected to be in the range of $1.00 to $1.10 per thousand brick
instead of the full $1.76 average annual cost.
     As with other industries, all the producers in a region or market
will avoid installation of pollution control equipment as long as
possible so as to avoid incurring this cost before competitors.  When
                               IV-30

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     regulatory  orders  force compliance, most firms will act at the same
     time.  When this occurs there is little reason to anticipate financial
     difficulties for industry, except for those firms that are already
     marginal.   These few marginal firms can be expected to merge with
     others or  close.
D.   Coal Cleaning
     1.    Introduction
          Coal  cleaning consists of removing some of the undesirable
     materials  from raw mine run coal.  These materials consist of
     sulfur compounds,  dirt, clay, rock, shale, and other inorganic
     impurities.  Both  bituminous and anthracite coal are cleaned.
     Cleaning improves  the quality of coal by increasing the B.t.u.
     output per pound and by reducing ash content.  It is accomplished
     by washing the coal with air or water.  Approximately 21 percent
     of wet washed coal is thermally dried.  Air cleaning is accom-
     plished by the use of pneumatic cleaners, while drying is
     accomplished predominantly with either flash driers or fluidized-
     bed driers.
     2.    Emissions and Costs of Control
          The major air pollutant in the coal cleaning industry is
     particulates in the form of dust from either flash driers,
     fluidized-bed driers, or pneumatic cleaners.
          Available data on the current level of control indicate  that
     87 percent of the  flash and fluidized-bed driers  and 16 percent
     of the pneumatic cleaners are controlled at an efficiency of  80
     percent.  The composite level of control is about 58 percent  when
     the processes are  weighted according to the quantity of coal  handled.
     Thus, aggregate emissions of particulates in 1967 totaled 64,700
     tons.  By  Fiscal Year 1976, aggregate emissions at 58 percent
     controls could be  expected to total about 92,300  tons of particulates.
     To obtain a composite level of 93 percent control in Fiscal Year
     1976, flash driers will have to be controlled to  an average level
     of 93.2  percent efficiency, fluidized-bed driers  to an average
     level of 97.8 percent efficiency and pneumatic cleaners to an
     average  level of 94.5 percent.  Aggregate annual  emissions of
     particulates can then be expected to be reduced to approximately
     14,100  tons in Fiscal Year 1976.

                                   IV-31

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     Because of the coal dust content of the off-gases from coal
cleaning, a fire and explosion hazard exists.  Because of this
explosion hazard, wet scrubbers constructed of mild steel rather
Jjhan baghouses are preferred as control devices [Refs. 17 and 18].
A 15 inch w.g. venturi scrubber was selected as the control device
for the fluidized-bed drier and a 10 inch w.g. venturi was assumed
for both the flash drier and the pneumatic cleaner.  These pressure
drops will provide the efficiencies required.  The investment
requirement would be $13.1 million and annual costs in Fiscal
Year 1976 would be $5.3 million.
3.   Engineering Basis of the Analysis
     Coal is cleaned by both wet and dry methods.   In this analysis
only the three predominant processes within the coal cleaning
industry were considered:  flash and fluidized-bed thermal driers
(for coal cleaned by wet methods), and pneumatic cleaners.  These
three processes are significant sources of particulate emissions
mostly in the form of coal dust.  Uncontrolled particulate emission
rates from these three processes are shown in Table IV-10.
           TABLE IV-10. - UNCONTROLLED PARTICULATE
             EMISSION RATES FROM COAL CLEANING
                         PROCESSES*
                                Uncontrolled Emissions
           Process                (Ib/ton coal feed)
       Flash drier                       12
       Fluidized-bed drier               13
       Pneumatic cleaner                  3
      *
         A cyclone is assumed part of process equipment,
      not air pollution control equipment.
      Source:  Reference 17 and calculated from data
               given in References 18 and 19.
     Available data on the current level of control reveal that 87 per-
cent of both types of thermal driers and 16 percent of pneumatic cleaners
are controlled at an efficiency of 80 percent [Ref. 20].  The composite
                                IV-32

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level of control was about 58 percent, when the processes were weighted
according to the quantity of coal handled.  To comply with the process
weight rate standard assumed in this analysis, flash driers, fluidized-
bed driers, and pneumatic cleaners will have to be controlled to
efficiencies of 93.2, 97.8, and 94.5 percent, respectively.
     To develop control costs for the various unit processes, unit gas
volume estimates had to be made.  Table IV-11 presents the estimates
along with the control equipment selected for each unit process.

    TABLE IV-11. - UNIT GAS VOLUMES AND CONTROL EQUIPMENT
Gas Volume Selected Control
Process acfm/ton per hour Equipment
Flash Drier
Fluidized-bed Drier
Pneumatic Cleaner
540
480
357
10"
15"
10"
w.g.
w.g.
w.g.
venturi
venturi
venturi
 Sources:   References  21,  22,  and  23.

     The model  processes  considered in this analysis have the follow-
 ing sizes:   flash  drier,  50  tons  of coal feed per hour; fluidized-
 bed drier,  208;  and pneumatic cleaner, 70  [Refs. 18 and 21].  The gas
 volumes  (control system sizes)  are 27, 99.9, and 25 thousand actual
 cubic  feet per  minute for the flash drier, the fluidized-bed drier
 and the pneumatic  cleaner, respectively [Refs. 18, 19, and 21].  The
 gas stream temperature assumed for this analysis was 159° F [Ref. 21].
 The annual hours of operation were 3,750,  assuming 2 shifts per day,
 7.5 effective hours per shift, 5  days per  week, and 50 weeks per year
 Uef.  22].
     Due  to the considerable fire and explosion hazard associated with
 coal dust,  wet  scrubbers  instead  of baghouses are preferred as control
 devices  [Refs.  21  and 23].   A 15" w.g. venturi scrubber was assumed as
 the control device for the fluidized-bed drier and a 10" w.g. venturi
 was assumed for both  the  flash drier and the pneumatic cleaner.  These
 pressure drops  correspond to the  required  control efficiencies stated
 above.
                              IV-33

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     Cost estimates for controlling emissions  from  coal  cleaning
establishments were based on the types of processes and  on  the produc-
tion [Ref.  24] in each plant.  Output or production of total coal
cleaned was prorated  to the different processes as  follows:   7.1 per-
cent by pneumatic methods with the remainder to wet washing.
Nationally, only 20.7 percent of cleaned coal  is  thermally  dried and
43.5 percent  of thermally dried coal is dried  in  fluidized-bed driers
[Ref.  25].  The remaining 56.5 percent of thermally dried coal was
assumed to  be dried in flash driers.  For each plant in  the  298 metro-
politan areas, it was assumed that coal was cleaned in the  above
proportions.
     Cost estimating  factors were calculated for  each unit process
based  upon  Figures IV-4 through IV-6.  These factors are summarized
in Table  IV-12.

          TABLE IV-12. - COAL CLEANING CONTROL COSTS
Equipment Type
Pneumatic cleaners
Fluidized-bed driers
Flash Driers
Costs
($1000/ton/hour)
Investment
0.316
0.247
0.463
Annual
0.148
0.201
0.219
 4.    Scope  and Limitations of Analysis
      Although there is a relatively large number of coal cleaning
 plants in the United States, detailed data on plant locations,
 capacities, and production are available.  Metropolitan area
 totals for  capacities and production were obtained from these
 data.  However, it was not possible to determine the coal cleaning
 process used in every case, so average values were applied to the
 regional production and capacities to obtain volumes of emissions.
 Growth estimates were made from past rates of increase in production.
 Cost  of control was based on cost to control a model plant of
.average size.  Financial data and market information for the indus-
 try are fairly complete.
                               IV-34

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100
 90
 80
 70
 60

 50

 40

 30
 20
 10
  9
  8
  7
  6
                                         A =  316  ELC Stainless Steel
                                         B =  304  Venturi/MS Concrete Lined Separator
                                         C =  All  Mild  Steel
                             4    5  6  7  8 9  10
                     3 20      30   40   50  60 70 80 90
Inlet Gas Volume   (10 acfm)
 Source:  Poly Con Corporation.

                   Fig. IV-4.  Equipment Cost for Venturi Scrubbers.
                                        IV-35

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 1000



  800




  600
  400
              A = 316 ELC Stainless Steel

              B = 304 Venturi/MS Concrete Lined Separator

              C = All Mild Steel
  200
o
o
o
(0

o 100





g
e
PH
•H


I  60
   80
   40
   20
                                                             1
                                                                          JL_L_LJ_L1J
                  20
                              40      60   80   100          200

                                        Inlet Gas Volume  (10   acfm)
400     600  800 1000
          Source:  Poly  Con Corporation.



                             Fig. IV-5.  Equipment Cost  for Venturi Scrubbers.
                                                 IV-36

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 1000


  800


  600

  500

  400


  300



  200
o
o
o
  100


  80
60
3

DO  50


Tl  40
«


I  30
o



8  20
•n
•H
Q
                                                                   PRESSURE DROP

                                                                                40 inch
                  3   4  5  678910
                                       20    30 40 5060 80100
200  300 400  600 800
                                   Inlet  Gas  Volume   (10  acfm)
   Source:  Poly Con Corporation.


                  Fig. IV-6,  Annual Direct  Operating Cost for Venturi Scrubbers.
                                          IV-37

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5.   Industry Structure
     Coal cleaning is a part of the process of improving the
quality of raw coal for market.  It is usually done by the producer,
normally close to the mine to avoid transporting waste rock.
     In 1967, the 667 coal cleaning plants in the United States
had a capacity of 370 million tons.  Production totaled 349.0
million tons and had a value of shipments of $1.5 billion.   Cleaning
plants are located in 20 states with over 90 percent located east
of the Mississippi.  Sixty-ftine percent of the total plants are
located  (in order of importance) in West Virginia, Pennsylvania, and
Kentucky.  Virginia, Illinois, and Ohio have 35 or more plants
each and with Alabama with 20 plants,  make up more than 25  percent
of the total number of plants.
     Only 256 of the 667 plants are in the 298 metropolitan areas,
and they account for only 37.6 percent, 37.5 percent,  and 40 percent
of total industry capacity, production, and value of shipments,
respectively.
6.   Market
     The market for coal and thus the market for coal cleaning is
largely a function of the production of electric power and  the
output of blast furnaces and basic steel.  Almost 30 percent of
the industry output is utilized for generating electricity.  Blast
furnaces and basic steel production utilize an additional 22 per-
cent.  Exports amount to approximately 2 percent of output, mostly
of metallurgical coal.  Besides coal mining, which purchases 19
percent of coal production, no other industry utilizes as much as
four percent of the remaining 27 percent of industry output.
     Even though the electric power industry and the steel industry
utilize over half of coal production,  coal makes up only about
four percent of the value of inputs into the electric power industry
and 2.3 percent of the inputs into steel production.  These are
exceeded, but only slightly, by one other industry — the hydraulic
cement industry — where about 5.5 percent of the input is  coal.
     While coal does make up a rather small proportion of the
inputs into these industries, it is a rather important input
especially for steam-electric generation.  For this reason  many
                             IV-38

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of these industries own coal companies  to  provide  their  supplies.
Long term contracts, some as long as  20 years,  are also  used  for
this purpose.
     Even though coal companies are owned  by  other industry or
utilities, most sell at least some of their output in  the open
market.  This practice, together with the  number of independent
coal companies, maintains competition among firms.   In addition,
coal is in competition with other fuels — gas, oil, nuclear  power,
and electricity (which is often produced from coal).   All this
serves to limit profits.
     In spite of its bulk, coal moves to a limited  extent in  the
export market.  The United States is  a  net exporter, but the  extent
of foreign trade is not great enough  to have  a major impact on
domestic supply.  However, it does tend to push prices up, since
export prices may be as much as 30-50 percent above United States
prices.
     Coal, along with other fuels, is currently enjoying an expanding
market.  This is placing considerable pressure on production  to
meet the growing demand.
7.   Trends
     It is expected that capacity and production will grow through
Fiscal Year  1976 at 4.8 percent per year.  The proportion of coal
cleaned has  also been steadily increasing.  In 1927, the percentage
of total coal cleaned was 5.3 percent.  By 1952, 49 percent of pro-
duction was  cleaned and by 1965 the proportion was 65 percent.  The
rising trend in coal cleaning can be  expected to continue
as poorer seams are worked, more stringent sulfur oxide
limitations  are established, and shipping  costs increase.
8.   Economic Impact of Control Costs
     The indicated FY 1976 total annual cost  of control to the
coal cleaning industry will run at the  rate of $5,3 million per
year.  For an estimated Fiscal Year 1976 production of 167 million
tons,  this indicates an incremental cost of $0.03  per  ton.  For the
256 plants in the 298 metropolitan areas,  the estimated annual cost
for the average plant would be $19,500. Plants of  the average
size indicated here  (annual production  of  about 650,000  tons)
could be expected to have no trouble  absorbing  a cost  increase
                               IV-39

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of this size.  Only firms already marginal would be affected.
However, because of the nature of coal as a production factor in
other goods or services, and the current demand for all fuels,
a price increase of $0.03 per ton could very easily be passed on
to buyers.
     The current open market price for coal is $4.40 per ton f.o.b.
the mine.  A $0.03 per ton cost is approximately one percent.  This
increases the price of steel not more than $0.025 per ton, which is
insignificant compared to a current average price of $183.00 per ton.
Cement
1.   Introduction
     Portland cement accounts for approximately 98 percent of
cement production in the United States.  All portland cement is
produced in either the wet or dry process, the chief difference
being whether the prepared ingredients are introduced into the
cement kiln as a dry mixture or as a wet slurry.   The wet process
is used to produce approximately 58 percent of the cement.
Essentially, cement is made by quarrying cement rock, limestone,
clay, shale, and/or other materials, which are finely ground and
mixed.  The prepared mix is burned in a long sloping kiln into
cement clinker, which is then ground into a fine powder and sold
in bulk or bagged.
2.   Emissions and Cost of Control
     Dust arising from crushing, grinding, and materials handling
processes is universally controlled at quite high efficiencies
because such controls recover valuable products.   Kilns also emit
large amounts of particulates.   These are generally not fully
controlled with the exception of plants built since 1960.  Older
plants, which account for 76 percent of the capacity of the industry,
need additional control equipment to meet standards for control of
particulate emissions.  It is estimated that 13 percent of all
cement plants will require completely new systems—either fabric
filters or electrostatic precipitators—and that the remaining
older plants have equipment in place that can be improved in
efficiency to meet the control standard.  Thus, cement plants have
been grouped as follows:  24 percent for which no additional control
is specified and therefore no additional cost; 63 percent now
                            IV-40

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    partially controlled, for which additional equipment and cost are
    indicated; and 13 percent for which new control systems are indicated
    and for which the incremental control cost will be greatest.
         Particulate emissions from kilns in plants within the 298
    metropolitan areas are estimated to have totalled 239,000 tons in
    1967, representing an overall control level of 96 percent.  This
    industrywide control level is based on the assumption of 95 percent
    control in pre-1960 plants and 99 percent control in all plants
    built since 1960.  Expanded production in pre-1960 plants would be
    estimated to increase total particulate emissions to 280,000 tons
    by FY 1976 if the same control level were maintained.  With the
    installation of new or more efficient fabric filters for dry process
    kilns and electrostatic precipitators on wet process kilns, an
    industry control level of 99.7 percent may be achieved, reducing
    total emissions for Fiscal Year 1976 to 16,100 tons of particulates.
         These controls would require  an investment of $110 .million
    and  Fiscal Year  1976 annual  costs  of $30 .million.
     3.   Engineering Basis  of  the Analysis
         The primary difference  with  respect  to  pollution between the
    wet  and dry  processes  is  the state in which  the ground raw material
     is  fed into  the  kiln.   The major  unit processes involved are:
     crushing and grinding,  drying (dry process only), clinker production
     (calcining),  and final grinding.   Dusts from,crushing and grinding
     operations present only minor air pollution  problems as these are
     essentially  closed systems,  and the dust  collected is returned to
     the  unit from which it was  collected.  The same is most often true
     of  the drier off-gases  which are  usually  vented to either grinding
     or  calcining control system.   This study  focuses  on  controlling
     particulate  emissions  from  the calcining  operation.  The kiln
     represents  the major source  of particulate emissions in the cement
     industry, which  is not well  controlled at present.
         Totally uncontrolled emissions from  wet process kilns average
     38 pounds per barrel-   of  cement  produced, while  the average from
     dry  process  kilns is 46 pounds per barrel produced  [Ref. 14].  The
     calcining operation is  controlled to some degree.  Table IV-13
     reflects an  estimate of the  present status of control  for  the
     industry.
~    A barrel of  cement  equals  376 pounds.
                                     IV-41

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  TABLE IV-13. - PRESENT CONTROL STATUS FOR THE CEMENT INDUSTRY
Year of Kiln Installation Geographic Region Control Level
(percent)
Before 1960
•After 1960
Before 1960
After 1960
Outside 298 Areas
Outside 298 Areas
Within 298 Areas
Within 298 Areas
70.
>99
95
>99
       Therefore, control costs were estimated  on  the basis  of
  increasing the removal efficiencies on  those  kilns  installed before
  1960 to the control levels  shown in Table  IV-14.

TABLE IV-14. - ULTIMATE PARTICULATE REMOVAL  EFFICIENCIES  REQUIRED
Kiln Capacity
(1000 barrels /day)
1
2
4
6
8
10
Percent Efficiency Required
Wet Process
97.6
98.2
99.3
99.4
99.6
N/A*
Dry Process
97.8
98.4
99.5
99.6
99.8
99.9
   Not applicable.

  It was  assumed that  all kilns  installed  after  1960 were  controlled
  to the  required level.  The costs  of upgrading existing  control
  equipment to the  required  levels are shown in  Table  IV-15.   Existing
  control equipment was assumed  to be electrostatic precipitators for
  wet process  kilns and fabric filters for dry process kilns.
                               IV-42

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    TABLE IV-15. - ESTIMATED  COSTS  OF UPGRADING EXISTING
                      CONTROL  EQUIPMENT
Kiln Capacity
(1000 barrels /day)
1
2
4
6
8
10
Emission Control Costs
($1000)
Wet Process
(high efficiency ESP)
Investment
7.15
14.50
48.90
73.50
111.00
—
Annual
1.72
3.34
11.72
17.70
26.60
—
Dry Process
(fabric filter)
Inves tment
6.33
18.25
79.90
135.00
232.00
354.50
Annual
2.34
6.75
31.10
50.00
85.90
131.40
     Each plant in the nation was identified by location, total
capacity, and process type (wet or dry) in a current list from
Rock Products^ [Ref. 26].  Another list from this source identified
all plants installed since 1960 by total capacity, process type,
number and capacity of kilns, and kiln emission control equipment
[Ref. 27].  When a plant in the second list had two or more kilns,
they had the same capacity.  These various plant listings provided
the basis for the control cost and emission estimates for the 298
metropolitan areas.
4.   Scope and Limitations of Analysis
     This analysis was based on data available from government,
trade, and financial reporting sources.  Financial data were
available only for a limited number of firms; thus, the financial
impact of air pollution control costs had to be stated in somewhat
general terms.  Many firms engage in other business activities,
such as the sale of readymix concrete or cement blocks, or are
part of conglomerates. Without more detailed information, it has
not been possible to estimate the portion of revenues, costs,
profits, or taxes attributable to cement alone in such firms.  For
this and similar reasons, the relationships assumed for the financial
variables may be open to question.
                              IV-43

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  Industry  Structure
  a.   Characteristics of the Firms
      The  cement industry is estimated to have been represented
  by 58 firms and 178 plants in the United States  in 1967.   Of
  these, 50 firms and 138 plants are identified as having been
  in the 298 metropolitan areas.  The structure of the cement
  industry may be described in several ways.  Approximately  40
  percent of the firms in the industry operate more  than one
  plant and approximately half of those firms have productive
  capacity  of over 10,000,000 barrels of cement per year.  The
  purpose of multiple plant operation is,  apparently, to achieve
  broader market coverage and, therefore,  greater financial
  stability by lessening dependence on any one local demand
  pattern rather than to achieve significant economies of
  scale.   The trend in recent years has been to larger kilns,
 computerized operation,  and improved integration  of raw mill,
 kiln, clinker grinding,  and associated storage and  materials
 handling equipment.   These  factors have  produced  a  steady
 increase in efficiency of operation but  have  not  necessarily
 been accomplished  in larger plants.  Plants built between
 1960 and 1967,  for instance, ranged in capacity from 1  to
 8.5  million barrels  per year.  The range of capacities  for
 all  plants listed  in operation in 1967 was from 0.4 to
 16,000 million barrels per year, with the average plant having
 a capacity of approximately 3 million barrels per year '
 [Ref. 26].
      Since raw materials for cement production are widely
 distributed throughout the country, cement plants tend to be
 located close to major markets.  Normally, cement is not
 shipped more than 200 to 300 miles from the plant, because
 transportation costs tend to price a firm out of more distant
markets.   In recent years, however, some  firms have developed
distribution terminals at locations that  combine cheap water
transportation with access  to major urban markets.  Although
these firms have apparently  been successful in thus  extending
their marketing territory, most firms continue to  sell in
                          IV-44

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relatively small markets.   Imports  and exports  of  cement
account for less than  5  percent  of  the United States market
and are significant only in the markets on the  Atlantic Coast.
b.   Operating  Characteristics
     The statistical summary in  Chapter 2 gives United States
capacity for  the industry as 515 million barrels per year.
The figures given  indicate that  the industry operated  at  72.6
percent of capacity in 1967.  In fact, usable capacity was
probably 2-3  million barrels less and utilization  slightly
higher.  Operation at  85-90 percent of capacity tends  to
produce maximum profits, but the industry has tended to
operate at between 70  and 80 percent of capacity over  the
past ten years, due to a typical pattern of heavy  investment
whenever demand seems  to be catching up to supply.  Excess
capacity and  depressed profits are  therefore chronic.
c.   Resources
     The raw  materials used in manufacturing cement are
abundant and  widely distributed  throughout the  country.  Most
companies own their sources of supply and  have  ample reserves,
thereby stabilizing materials costs.   The  costs  of fuel,
transportation, and labor are the other major cost variables.
The rise in these  costs  in recent years coupled  with an
inability to  raise prices proportionately  accounts for the
generally below average  profit performance of this industry.
     Large quantities  of fuel are used  in  operating a cement
kiln, a modern  installation requiring apprbximately 950,000
B.t.u.'s per  barrel of clinker produced.   The fuel may be coal,
oil, or natural gas, with  gas providing  a  small  cost advan-
tage over the other two  at  present prices.  Many plants burn
coal and this use  accounts  for approximately 5 percent  of
industrial use of  bituminous  coal in  the United  States.
     Transportation is a major.cost factor as is typical  of
all products with  a low  value-to-bulk ratio.  In the past,
cement manufacturers maintained a basing point pricing  system
which tended  to eliminate price competition due  to freight
costs from different mill-to-market distances.   Since the
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     elimination of this system as a result of Federal antitrust
     action, individual firms have continued to absorb transpor-
     tation costs in varying degrees in order to meet competitors
     prices and extend their market range.  Under such conditions,
     transportation costs tend to place a definite limit on.market
     size for each plant.
          Labor accounts for approximately 35 percent of total
     cost.  Rising wages in recent years have contributed to the
     adverse profit position of the industry.
6.   Market
     Portland cement is a standardized product and competition
among sellers depends on quite small price differentials within
a clearly defined price pattern, plus service.  Most customers can
choose among a number of cement producers and price shading and
partial freight absorption by the producer may be necessary to
clinch a sale.  This competitive pressure tends to hold prices
down and puts considerable emphasis on the firm's ability to
deliver quantities to customers at destinations and on schedules
meeting the customers' preferences.  Those firms with newer equip-
ment and most efficient operation may be able to offer marginal
price concessions sufficient to keep sales at levels near optimum
operation.  Weaker firms may nbt be able to shade prices in order
to keep sales volume up without reducing profit margins signifi-
cantly.  This competitive pressure has caused many firms to close
their less efficient plants or to modernize them with new equip-
ment and computerized controls.
     Cement sales are historically closely related to construction
activity, measured by the value of new construction put in place.
It is anticipated, therefore, that the performance of the con-
struction industry will set the general tone of the performance
of the cement industry.
     Cement purchases represent about one percent of the inputs
of the construction industry based on the 1963 input/output rela-
tionship.  The distribution of cement sales by purchasers for
1963 were:
                             IV-46

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Ready-mixed concrete producers                       61%
Concrete product manufacturers                       13%
Highway contractors                                  10%
Building materials dealers                           8%
Other contractors                                    4%
Miscellaneous users (including government)           4%
Trends
a.   Capacity and Production
     Over-capacity was a chronic problem in the cement
industry during the early 1960's.  It appears that the
industry achieved a somewhat better balance between capacity
and sales in the later 1960's and this is expected to continue
through the 1970's.  Capacity is projected to increase at an
average rate of 2 percent per year through 1976.  It is anti-
cipated that this capacity will be utilized at close to the
recent average of 78 percent, implying a growth rate of 2
percent for production as well.
     It is probable that the present trend toward use of more
economical longer kilns and the addition of computer control
systems will continue.  This will lead to the closing of some
older plants and remodeling of others, resulting in only a
very gradual change in the industry structure.
b.   Price, Sales and Profits
     Prices declined slowly from a 1960 average level of
$3.25 per barrel at the mill to $3.15 per barrel in 1966 but
have risen gradually since then.  Less than optimum operating
ratios, a slowly growing market and competition with other
building materials will probably keep prices rising at  a
slow rate through 1975.  Sales are expected to increase at
an average rate of 3.5 percent per year.  Given the 2 percent
per year increase in production indicated above, this would
indicate a price increase of 1 1/2 percent per year.   Profits
may be expected to be stable, therefore, at or near their
recent levels and somewhat below the average return for
manufacturing firms.
                          IV-47

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Economic Impact of Control Costs

a.   Industry Composite

     As was noted in paragraph 2 above, plants built since
1960 have, almost without exception, been equipped with high

efficiency control equipment.  It is the older plants, there-

fore, that are a source of particulate emissions and upon

which will fall the new cost of air pollution control.  It

is estimated that by 1967 the cement industry had already

undertaken control costs equal to annual costs of $18 million.

b.   Impact on Firm

     The impact of the additional cost of air pollution

control on the normal cost pattern of a firm can be shown by

considering several "model" plants,  constructed to represent

typical operating patterns.  The firms described here are not
actual plants,  but are based on known conditions in the
industry.

                                    Plant A        Plant B
     Capacity (Thousands of
       Barrels  Per Year)               1,200          3,000
     Kilns  (Number &  Size)             1-400 ft.      1-550 ft.
     Construction Cost,  1958         $12 mil.       $12 mil.
     Production,  1967  (Thousands
       of Barrels  Per Year)              871         2 178
     Average Mill  Price  per Bbl.       $3.17         $3.17
     Sales                        $2,761,000    $6,904,000
     Net Income Before Tax        $  414,000    $1,156,000
     Business Income Tax         $  179,000    $  500,000
     Net Income After Tax         $  235,000    $  656,000
     Profit/Bbl                   $   0.2698    $   0.3011
     Annualized Air Pollution
      Control Cost, Total:

              If wet process     $   90,320    $  210,800
              If dry process     $   78,272    $  188,680

    Annualized Air Pollution
      Control Cost, Per Bbl:

              If wet process     $   0.1037    $   0.0968
              If dry process     $   0.0899    $   0.0866
                      IV-48

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     The relationships  shown for  Plant A and Plant B above
indicate the magnitude  of  air pollution control costs for a
small and a large  plant.   There are a large number of single
plant firms in  this  industry and  these figures indicate the
impact which may be  expected for  such firms.
     The costs  shown are for firms  or plants in the 13 percent
of  the industry for  which  completely new equipment is indicated.
That is, they represent the  full  cost of air pollution control.
Presumably, 24  percent  of  the plants in the industry are already
absorbing equivalent costs.   It appears that these plants,  being
newer, are more efficient  in their  operation and so able to
sell at a competitive price.
     The economies of scale  appear  to accrue  at  the plant
level rather than  as a  result of multiple plant  operation.
Multiple plant  firms may be  approximated by multiplying  indi-
vidual plant costs by the  number of  plants.
c.   Demand Elasticity  and Cost Shifting
     To the extent that the  demand  for cement  is derived
from the demand for  public and private construction, which
is  not highly elastic with regard to  price, the  overall
demand for cement would not be very  sensitive  to small price
changes.  However, in recent  years  cement has had a  fairly
advantageous price position relative  to  competing building
materials.  An  industry wide  increase in price by the full
amount of the control cost indicated  for firms that must
install new equipment might be expected  to change the position
of  cement adversely  relative  to substitutes.
     An attempt by some firms  to raise prices as a means o'f
shifting control costs  would  almost certainly  lead other firms
to move into the market.   The  market  for any one firm is
usually small geographically.  Selective price increases in
some local markets will encourage large  firms  to expand their
selling radius.
     Under these circumstances, it  is  to be expected that those
firms faced with the full  additional  cost of control will
be unable to.shift more than  a small  fraction of the added
                         IV-49

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     cost into price.  Those firms faced with additional but  smaller
     costs may, to the extent that they are larger and more efficient,
     be better able to raise prices, but not enough to recoup  the
     entire increase in costs.
     d.   Effect on the Industry
          Since it appears that the added cost of air pollution
     control will fall on the older, less efficient firms, it is
     expected that the result may be a hastening of the trend now
     operating in the industry to replace or rebuild older plants.
     In no case does it appear that these costs alone will cause a
     firm to fail.  It is probable, however, that the growth rate
     of the industry may be slowed slightly and that profit
     margins may continue to be somewhat below the average in
     manufacturing through Fiscal Year 1976.  Of course,  a major
     change in demand, such as that resulting from large  scale
     implementation of "Operation Breakthrough" housing construction
     using precast concrete, would stimulate production and make
     larger price increases more likely.
Elemental Phosphorus  and Phosphate Fertilizer
1.   Introduction
     a.   General
          The  production of elemental  phosphorus  and the manu-
     facturing of phosphate fertilizer are  normally  considered  to
     be two different  industries.   They are joined in  this  analysis
     because both products  are  produced from the  same  raw material
     with interrelated processes  and air  pollution problems.   Some
     of the firms  involved  are  producers  of both  products and  the
     market structures are  closely connected.   Each  industry is
     described and analyzed and the economic impact  of control
     costs is  evaluated in  terms  of the overlapping market  and
     business  structure.
          All  phosphorus products are  derived  from phosphate rock.
     About 40  million  tons  of rock were mined  in  the United States
     in 1967.   Thirty  million tons were processed domestically
     with the  remainder exported.   About  13 percent  of the  domestic
     output appeared as normal  superphosphate,  15 percent was

                             IV-50

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produced as elemental phosphorus,  39  percent was produced as
wet process phosphoric acid,  about 3  percent was produced in
the form of animal  feed,  and  the  remaining  30  percent  of the
rock was treated with wet process  phosphoric acid  to produce
triple superphosphate.
b.   Elemental Phosphorus
     Elemental phosphorus is  produced in this  country  by
smelting a mixture  of phosphate rock, silica and a carbon-
aceous reducing agent  (such as  metallurgical coke)  in  an
electric furnace.   Submerged  electric arcs  in  the  furnace
produce high  temperatures which cause the reduction of the
phosphate rock, releasing phosphorus, carbon monoxide  and
other reaction products,  including fluorides.   These gases
emerge from  the furnace  and pass  through electrostatic pre-
cipitators for the  removal of dust.   The cleaned furnace gases
then discharge into a  condenser,  contacting sprays  of water
maintained  at a  temperature  above the melting  point of phos-
phorus  (111°F).   Phosphorus  is  condensed from  the  gas  stream
and collects below a water  layer  in a pump. The cooled gases,
principally carbon monoxide,  are  recycled and  burned for
heat recovery.
 c.   Phosphate Fertilizer
     The phosphate fertilizer industry as defined  for  this
report  includes  all plants which  produce wet process acid
 (both  regular and concentrated),  normal superphosphate,
triple  superphosphate,  and  diammonium phosphate.   Fertilizer
plants  may  produce one or all of  these.
     The most common process  for  the production of wet
process  acid involves  the digestion of ground, calcined
phosphate rock with sulfuric  acid.  The acid is then sepa-
rated  from  the solids  by filtration.   Normal superphosphate
is  produced as a  screened material, either  as  a continuous
or  batch process, by acidulating  ground and dried  phosphate
rock containing  31 to  35 percent  P^ with  sulfuric acid.
Triple  superphosphate  is fertilizer produced by the reaction
of  natural  phosphates  with wet  process phosphoric  acid.  The
                       IV-51

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     product contains 40 percent or more of phosphoric acid.
     Ammonium phosphates are now the most popular form of phos-
     phate fertilizers because of high nutrient content and low
     shipping cost per unit of P2°5'  A11 Processes for the manu-
     facture of diammonium phosphate fertilizer from wet process
     phosphoric acid and ammonia are essentially the same in
     principle.  Wet process phosphoric acid of about 40-42 percent
     P.O  equivalent is partially neutralized by anhydrous gaseous
     ammonia.  The resultant slurry is then fed into an ammoniator-
     granulator drum where final ammoniation and granulation take
     place simultaneously and additional water is removed.   The
     moist granules are dried, screened, cooled, and conveyed to
     bulk storage.
2.   Emissions and Costs of Control
     Particulate or gaseous fluorides  are released in almost all
of the processes used in reducing phosphate rock and manufacturing
products from the rock.   Particulates  and gaseous fluorides
frequently are emitted.
     a.   Emissions From Phosphorus Production
          There are three main sources of fluoride emissions in
     the production of elemental phosphorus:   feed preparation,
     evolution of gas from the furnace,  and evolution of  gas from
     the molten slag.  Fluorides evolved during the furnace
     operation are effectively scrubbed  in the spray condensers.
     Emissions from the preliminary feed preparation and  from the
     molten slag operation are also controlled to a greater  or
     less extent in each plant by scrubbing with water.   However,
     it is estimated that,  on the average,  these controls achieve
     only 85 percent removal efficiency.   The  remaining uncontrolled
     emission rate is 18 pounds of fluoride per ton of phosphorus.
     For the phosphorus  plants within  the 298  metropolitan areas,
     this results in estimated 1967 emissions  of 2,400 tons  of
     fluorides.
          By applying additional scrubber capacity to the feed
     preparation and slag tapping off-gases, the overall  control
     efficiency for fluoride removal can be increased to  98  per-
     cent.   By Fiscal Year  1976,  without additional  scrubber

                            IV-52

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capacity, emissions within the  298 metropolitan areas would
reach 3,340 tons of fluorides.  With  the  additional  controls,
these emissions would be reduced  to 334 tons.
     Particulate emissions occurring  during  feed preparation
and charging of the furnace  are normally  controlled  to  80
percent by use of dust collectors.  Installation of  wet
scrubbers following the dust collectors can  achieve  a control
level of 99 percent, meeting the  standard adopted  for this
study.
      The emissions of particulates in 1967 are estimated for
plants  in the 298 metropolitan areas  as  2,400 tons.   Growth
of the  industry would increase these  emissions to  3,340 tons
by FY 1976, which would be reduced to 200 tons of  particulates
by installation of controls.
b.   Fluorides From Fertilizer Production
      In the production of  normal  superphosphate, there  are
potential fluoride emissions from both handling and  prepara-
tion of the rock  from the  acidulation and curing steps.  During
rock handling and preparation,  fluorides  are chemically
bound to the  dusts generated.  Even during the calcining step,
temperatures  are  too  low to  release gaseous  fluorides.  In
almost  every  case,  dusts are very well controlled, usually
with fabric filters and meet established  standards.  Duringt
the acidulation and curing steps, gaseous fluorides  are emitted.
Current control practice limits these emissions to about one
pound of fluoride per ton  of P90,. with various forms of wet
scrubbers.  This  is approximately a 99 percent control  level.
The standards  adopted for  this  analysis,  however, require a
final control  level of 99.9  percent for production of super-
phosphate.  Therefore, additional wet scrubbers, in  series,
are required.  The same situation occurs  in  the handling and
processing of  rock in the  production  of wet  process  phosphoric
acid which require additional controls in the  same way.  In
addition, gaseous  fluorides  are evolved in the manufacture
and concentration  of  phosphoric acid.  Excluding the fluorides
emitted from slime ponds,  the industry presently controls
                           IV-53

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fluoride emission from the digesters, vacuum coolers, and
evaporators to a level of about 98 percent, resulting, on the
average, in emissions of 0.2 pounds of fluoride per ton of
P-O,..  Final controls of approximately 99.8 percent are
required to meet the standard for the manufacture and concen-
tration of phosphoric acid; therefore, the installation of
additional wet scrubbers is indicated.
     Slime ponds serve phosphoric acid plants as storage and
settling sites for solid and liquid effluents.  Fluoride
emissions are produced from these ponds.  Emissions from the
ponds are highly variable ranging from 0.08 to 0.80 pounds per
ton of P-,0,1 per day.  At present not enough is known of the
factors contributing to the range of emissions to allow rea-
sonable control cost estimates to be made for the ponds.
     The  concentration of wet phosphoric acid in vacuum
concentrators does not lead to any significant fluoride
emissions due to the automatic absorbtion of these gases in
the  process liquids.  The emissions of fluoride from the sub-
merged  combustion process production  of concentrated phos-
phoric  acid are also minimal.
     In the production of triple superphosphate, emission of
fluoride does occur during the chemical reaction and drying
steps.  At the current average industrial control level of
about 99 percent, an estimated 0.16 pounds of fluoride per
ton  of  P205 are emitted.  To meet the standards, a control
level of 99.9 percent will be required.  Additional wet
scrubbers are again required to bring the emission level
down to 0.016 pounds per ton of P-,0,..
     In the production of diammonium phosphate, fluoride
emissions occur both during chemical reaction and during
drying, although to a lesser extent than from triple super-
phosphate or wet process phosphoric acid.  At a current
estimated control level of 96 percent, emissions of about
0.10 pounds of fluoride per ton of P 0  are required.  Again,
additional wet scrubbers will be necessary.
                        IV-54

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         Total fluoride emissions  in 1967 are  estimated  to  have
    amounted to 612  tons  for  all phosphate fertilizer  plants  in  the
    298 metropolitan areas.   Industrial  growth would increase
    these emissions  to 1,520  tons  by FY  1976 at  the same level of
    control.  Installation of  the  controls specified for this
    analysis would reduce FY  1976  emissions to 134 tons.
         In summary, for  the  phosphate fertilizer industry  the
    1967 level of fluoride control was approximately 98  percent.
    By implementing  the controls specified, the  industrywide
    control level will reach  99.8  percent by Fiscal Year 1976.
    c.   Control Costs
         Total investment in  the eight elemental phosphorus
    plants located in the 298  metropolitan areas is estimated
    at $6,600,000 by Fiscal Year 1976, including allowance  for
    growth in capacity to that date.  With full  implementation
    of controls by Fiscal Year 1976,  total annualized cost  to
    the segment of this industry effected will be approximately
    $3,100,000 per year.  Equivalent  investment  and annualized
    cost for fertilizer producers  by  Fiscal Year 1976 are
    $32,100,000 investment and $10,000,000 annually.
3.    Engineering  Basis  of  the Analysis
     a.    Elemental Phosphorus
          Costs  are available for fluoride emission  control  systems.
     These data  are based  on  scrubbing the fumes  from both the feed
     preparation  and furnace  slag tapping areas.  The system for
     emission control during  feed preparation consists  of a  dust
     collector and  scrubbers.   The fumes  from slag tapping are
     collected in a hood,  diluted with air, and the  combined gases
     are  scrubbed with water  in a single  scrubber.  The scrubbed
     gases  are exhausted  through  a  fan and discharged through  a tall
     stack.   Water  is used as  the absorbant and is recirculated through
     the  scrubber system to produce 15 percent  fluorsilic acid.
          The cost  of the  control system  for a  given plant is  related
     directly to  the  gas flow  rate  through the  scrubbers  which in turn
     is a  function  of the  plant capacity.   Table  IV-16  indicates  the

                               IV-55

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relationship between plant capacity (in terms of  elementary
phosphorus annual tonnages), furnace rating and gas  flow rate
through the scrubbers.

    TABLE IV-16. - ELEMENTAL PHOSPHORUS CAPACITY,
 FURNACE RATING AND GAS FLOW RATE THROUGH SCRUBBERS
Phosphorus
Capacity
(tons per year)
17,000
31,000
43,500
Furnace
Rating
(KW)
25,000
45,000
64,000
Gas Flow Rates (SCFM)
Feed Preparation
30,000
54,000
77,000
Slag Tapping
50,000
58,000
65,000
     The installed and annualized costs of control systems
versus plant capacity based on these gas flows  is shown in
Figure IV-7.  These costs represent an increase in control
efficiency of 95 percent.  Installated costs shown in
Figure IV-7  were based on data in Reference 28.  Annual
operating and maintenance costs were computed on the basis
of the equation [Ref. 6] G = S [0.7457HK(Z+Qh) + WHL + M];
where:                                  198°
          S = ACFM = 1.3 x SCFM,
          H = 7000 hours,
          K = 0.008 dollars per kilowatt-hour,
          L = 0.50 dollars per gallon of water,
          M = 0.06 dollars maintenance cost per ACFM,
          Z = 0.015 horsepower input per ACFM to the collector
              (fan + pump),
          Q = 0.02 gallons of water per ACFM required,
          h = 30 feet of head required in water circulation
              system,
          W = 0.0005 gallons per  ACFM make up liquor required.
                         IV-56

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   500
   400
§  300
o
i-

O  200
u
   100
                                     INSTALLED COST
                                        ANNUALIZED
                 10         20         30

                         FURNACE  CAPACITY

                          1000 Tons/Year
40
50
  Fig.  IV-7. - Investment and Annualized Costs for Phosphorus Furnaces.
                                IV-5 7

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     b.   Phosphate Fertilizer
          To develop fluoride control costs for the fertilizer
     industry, each of the major production processes was analyzed
     separately.  These were the production of normal super-
     phosphate, diammonium phosphate, and wet process acid.  In all
     cases, it can be assumed that primary scrubbing systems designed
     to remove fluorides existed yielding removal efficiencies of
     anywhere from 95 to 98 percent.   However, to achieve removal
     efficiencies in excess of 99.5 percent, engineering analysis
     demonstrated that one or more control systems must be added in
     series to the existing equipment.  Table IV-17 indicates the
     additional control systems required to meet the stringent
     removals required.

           TABLE IV-17. - CONTROL SYSTEMS REQUIRED
     Production Process
     Wet Process Acid
     Normal Superphosphate
     Triple Superphosphate
     Ammonium Phosphate
Control Systems Required
Wet Cyclone + Packed
  Crossflow Scrubber
Three Stage Cyclonic
  Spray Scrubber
Wet Cyclone + Packed
  Crossflow Scrubber
Venturi Scrubber - 15
  inch w.g.
          Control costs were calculated based upon data found in
     a draft report of an ongoing APCO study [Ref. 28].  These
     costs are shown in Table IV-18 as a function of capacity
     expressed in tons per day (tpd) of equivalent P205.
4.   Scope and Limitations of Analysis
     Producers of elemental phosphorus and of phosphate fertilizer
have been grouped together for this analysis because all phosphorus
producers are also fertilizer producers.  The economic impact is,
therefore, not separable.  The technical and cost factors, however,
are different for the two product classes and were analyzed and are
reported as separate industries.
                               IV-58

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                                      TABLE  IV-18.  - FERTILIZER PRODUCTION CONTROL COSTS
Capacity
(tpd P205

50
100
250
500
1,000
2,000
4,000
Costs
($1,000)
Wet Process Acid
Investment Annual
60 20
90 30
150 60
230 90
450 170
850 350
-
Normal Superphosphate
Investment Annual
120 28
160 40
260 72
-
-
-
-
Triple Superphosphate
Investment Annual
180 50
260 80
460 130
700 200
1,200 340
2,300 6,700
4,800 1,400
Ammonium Phosphate
Investment Annual
18 6
28 10
48 18
70 30
160 62
330 130
660 250
f
Ui
vO

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     The larger firms in this industry produce many products and
phosphorus and phosphate fertilizer contribute only a small part
of their revenues.  It was not possible to determine the role of
these products in the overall product and cost mix of firms for
which data were available.  Some small firms apparently produce
only fertilizer, but no published records were available for such
firms.  The analysis of economic impact of control costs had to
be based, therefore, upon the general conditions and trends of
the chemical and  fertilizer industries.  It does not appear that
more detailed data would cause a change in the major conclusions
reached in this report.
5.   Industry Structure
     Production of elemental phosphorus is concentrated in six
private firms, with  the Tennessee Valley Authority also a significant
producer  (approximately six percent of industry capacity).  One
chemical  firm accounts for 35 percent of the industry and the
three  largest firms  have 75 percent of productive capacity.  Each
of the producers  of  elemental phosphorus is also a producer of
phosphoric acid and  one or more of the types of finished fertilizer.
All but two of them  sell phosphate rock to other users.  A small
number of firms produce phosphate rock for sale to other users,
but do not produce phosphorus products themselves.  There are 80
firms, in addition to the producers of elemental phosphorus, that
are producers of  phosphate fertilizers, 56 of them producing normal
superphosphate, 18 producing triple superphosphate, and 44
producing ammonium phosphates.  The production of phosphate ferti-
lizers is not characterized by dominance of one or two firms,
although there are very great variations in firm size ranging from
single-plant firms of 15,000-20,000 tons annual capacity to firms
with more than 20 plants and capacity in excess of 125,000 tons
per year.
     Given the present pattern of industrial uses of elemental
phosphorus, sales of this product appear  to be stable and to
provide an adequate  profit to the firms producing it.  Phosphate
fertilizer, on the other hand, has been characterized by below
average returns on investment during the past decade and has
suffered from chronic over-capacity.  It has attracted investment
from a number of  chemical and petroleum firms that had hoped
                              IV-60

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fertilizer would provide a profitable outlet  for materials such
as sulfuric acid and at the same  time provide diversification into
the agricultural sector of the economy.  A number  of  farm cooper-
atives also undertook phosphate fertilizer production in order to
provide a stable and economic supply of  one of the ingredients of
the dry-mixed  fertilizer  they  offer farmers.   These farm cooperatives
had rather mixed  success  and have not  always  been  a stabilizing
influence in the  industry.
     Some rationalization of the  industry appears  to  have begun in
the last year  or  two.  Shifting demand from normal superphosphate
to triple superphosphate  and diammonium  phosphate  have induced
shutdowns of some  of the  older normal superphosphate  capacity and
some smaller companies have  sold  out to  other firms or left the
industry.  Also,  more emphasis is being  given to marketing and to
solving  chronic problems  of  storage, transportation,  and distribution.
     Further statistics for  the two industries are shown in Tables IV-19
and IV-20.
      TABLE IV-19.  - 1967 STATISTICAL DATA ON THE  ELEMENTAL
                      PHOSPHORUS INDUSTRY
                         United States        Metropolitan Areas
Number of Plants               13                      8
Capacity (Thousands
  of Tons)                     658                    290
Production (Thousands
  of Tons)                     587                    279
Value of Shipments
  (Millions of
  Dollars)                     200                    140
                               IV-61

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    TABLE IV-20.  - 1967  STATISTICAL  DATA ON  THE PHOSPHATE
                     FERTILIZER INDUSTRY
United States
Number of Plants
Capacity
Wet Process Acid (1,000 Tons P,^
ORTHO
SUPER
Ammonium Phosphate (1,000 Tons
Gross Weight)
Normal Superphosphate (1,000 Tons
Gross Weight)
Triple Superphosphate (1,000 Tons
Gross Weight)
Production
Fertilizer (Thousands of Tons)
Phosphoric Acid (Thousands of
Tons)
Value of Shipments (Millions of
Dollars)
Fertilizer
Phosphoric Acid
179


5,860
316

7,430

4,690

3,640

4,700

5,190


976
565
Metropolitan Areas
147


4,830
149

6,430

3,840

3,460

4,100

4,200


854
455
6.   Market and Trends
     Approximately 85 percent of the production of elemental
phosphorus is sold to industry for a wide variety of uses.   Almost
75 percent of phosphate output is used for fertilizer and approxi-
mately 20 percent goes to industrial purchasers.  Fertilizer pro-
duction, therefore, is dominant in this industry.  However, indus-
trial uses are increasingly important, as is shown by the fact that
production of phosphate rock has more than doubled during the
1960*s while fertilizer production, although showing a steady
growth, increased only by approximately 20 percent.  Until 1950,
normal superphosphate was almost the exclusive source of phosphate
in fertilizer.  Its use, however, has declined over the years and
amounts to only about 20 percent of the total phosphate market
today.
                              IV-62

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     The fertilizer market is quite  competitive.  Marketing  is
done by major producers serving national  or  regional markets, by
retailers of farm and garden supplies,  and by  producers of mixed
fertilizers who buy their ingredients from primary producers.
Increasingly knowledgeable farmers operating large-scale  farms
have increased market influence and  demand fertilizers that have
analyses tailored to their individual needs.   This competition
tends to hold prices close to the minimum necessary to maintain
adequate supplies.  It also has meant that buyers of substantial
quantities can negotiate significant discounts from list  prices.
     Average prices climbed slowly during the  1960's, but dropped
in the last two years of the decade.  It  is  expected that they
will resume their upward trend in the 1970's,  rising much more
slowly than other industrial prices.  Prices tend to be markedly
higher in the Midwest than on the East  Coast, primarily because
of added transportation costs.  This has  led to extensive use of
triple superphosphate and diammonium phosphate in most of the
major farm areas, since these contain two to three times as much
plant nutrients per ton as normal superphosphate and therefore
incur lower transportation costs per unit of value.  The difference
is shown by comparison of the cost to the average farmer in terms
of nutrients  applied  to  the soil.  Government  studies have shown
 [Ref.  29]  that  a  ton   of P-jO,-  costs  a farmer,  on the average in
                           £• J
1969,  $163  as  triple  superphosphate, $216 as normal superphosphate,
and  only  $149  as  ammonium  phosphate  [Ref. 29].  Cost of production
at the plant  is somewhat lower  for the  newer triple superphosphate
and  diammonium  phosphate processes,  but not  as much as this
differential  of applied  cost.   The greater share of the differences
 appears  to  result from economies  in  shipping the more  concentrated
 fertilizers.
7.   Economic  Impact  of  Control Costs
     a.   Cost  Factors
          The value of investment required to  achieve the desired
     emission  control level for plants  producing elemental phos-
     phorus varies in relation  to the capacity of each plant.  It
     is estimated that the average investment  per plant subject
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 to  these standards in the 298 metropolitan  areas  in 1967
 would be $585,000.  The annualized cost  in  1967,  including
 depreciation, finance, and operating charges would  average
 $271,000 per plant in the metropolitan areas, or  approxi-
 mately  $7.80 per ton of phosphorus produced.
     Investment requirements and annual  costs for fertilizer
 plants  vary in relation not only to capacity but  also to
 the type of product produced.  The average  investment
 in  1967 for all plants in the metropolitan  areas  is  estimated
 at  just under $150,000 each, and total annual costs, including
 the annualized investment, average approximately  $47,000 per
 plant.  The effect of varying investment and operating expenses
 in  1967 may be shown by comparing the range of annual cost for
 each production process.  Annual costs per  plant  for production
 of  normal superphosphate range from $18,000 per year at 12
 tons per day capacity to $440,000 per year  at 1,540  tons per
 day.  For triple superphosphate producers,  the annual cost
 per plant range is from $52,000 per year at 50 tons per day
 capacity to $2,000,000 per year at 10,000 tons per day capacity.
 Ammonium phosphate plants show annual costs from  $6,000 per
 year at 50 tons per day capacity to $375,000 per year at
 6,000 tons per day capacity.  Finally, annual costs for
 phosphoric acid plants are estimated to range from $13,000
 per year at 25 tons per day capacity to $170,000 per year
 at  1,000 tons per day capacity.
 b.   Industry Impact
     It is estimated that an annual cost of $2,180,000 will
 be  required to control facilities in operation in 1967.  This
will be equal to approximately $7.80 per ton of production.
 This is approximately two percent of the f.o.b.  selling price.
The annual cost estimate of $6,910,000 for control of ferti-
 lizer plants,  figured on the same basis, averages approximately
 $1.70 per ton produced,  or just over one percent of producers
price.   This control cost reflects, insofar as possible, the
annual cost of controlling phosphoric acid production which
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enters into fertilizer manufacture.  By Fiscal Year 1976  it
is estimated that the investment requirement and annual cost
for emission controls for  the elemental phosphorus industry
located in the 298 metropolitan areas would be $6.6 million
and $3.1 million.  For the phosphate fertilizer industry, the
investment requirement and annual  cost are estimated at $32.0
million and $10.0 million.
     Data were not available to determine the share of revenue
and profit attributable to phosphorus production in the seven
firms in that market, or the role  of fertilizer in the total
operations of these fertilizer manufacturers for which financial
information was known.  It is believed that in most of the
industrial processes using phosphorus or phosphoric acid,
these inputs would be quite small  relative to the total material
cost.  With only seven firms to buy from, and with all of
them affected to some extent by the required control cost, it
is expected that buyers would have to accept price increases
sufficient to cover the producers' costs.  Since only 44
percent  of  the  United  States production would be affected
by increased  control  cost, prices  might rise by approximately
one  percent,  or $3.90  per  ton.  Sales of elemental phosphorus
or phosphoric acid  for industrial  use would probably not be
reduced  by  a  price  change  of this  magnitude.
      The average annual  control cost per ton of fertilizer
produced is approximately  $1.70.   Annual control cost for
producers  of  ammonium  phosphate is estimated to be appro-
ximately half the  average, while annual control cost for
triple superphosphate  is somewhat  above the average.
      Since most  producers  are affected by the increased cost
and  since  there  is  no  known substitute for phosphate fertilizer,
virtually  all of the increased cost may be expected to be
reflected in  price.  However, the  trend of substitution of
high  analysis triple superphosphate and diammonium phosphate
for normal superphosphate  may be accelerated.  Delivered
price on  the  farm of P205  may be expected to increase by
approximately the same amount whether in the form of normal
or triple superphosphate.  This would maintain the value
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     advantage of the concentrated superphosphate.  Ammonium  phos-
     phate may be expected to increase in price by only half  the
     increase in the other types.  The average price increase for
     all forms combined may, therefore, be in the range of  $0.70
     to $1.00 per ton, depending on the eventual product mix  of
     the industry.
          For producers, this seems to indicate a hastening decline
     in production of normal superphosphate.  Since much, of the
     capacity for producing normal superphosphate is older  than
     that used for the other types and may already be obsolete,
     producers may choose to replace it rather than invest  in
     control equipment.  Some small fertilizer producers make
     only normal superphosphate.  The number of these firms was
     not determined for this study.  Some of these firms may  be
     forced to close as return on investment falls below the  al-
     ready poor rate normal to the industry.
Grain Milling and Handling
1.   Introduction
     Commercial grain mills process grain into  flour,  livestock
feeds,  cereals, corn syrup, and various bread and  pastry mixes.
Because of limited data,  this study focuses  on  those  establish-
ments primarily engaged in manufacturing prepared  feeds  for
livestock.   Manufacture of certain feed ingredients and  adjuncts,
such as alfalfa meal,  feed supplements, and  feed concentrates  is
also included in these establishments.   The  main grain handling
operations  are performed  at terminal and country elevators  which
provide storage space and serve as collection and  transfer  points.
Terminal elevators serve  as storage and distribution  points and
store larger quantities over a longer period of time.  Country
elevators are scattered over the countryside and average storage
time is less than for terminal elevators.  The  two types of activ-
ities involved at both types of elevators are:   (1) intermittent
operations  such as unloading and drying and  (2) continuous  opera-
tions such  as bin aeration or turning,  cleaning, and  loading.
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     For simplicity, grain handling  is  assumed to proceed through
the'following steps:   (1) after harvesting,  the grain is  taken
to a country elevator;  (2) there  it  is  unloaded,  weighed,  and
stored for varying periods;  (3) it is then loaded into a  type of
conveyance and taken to a terminal elevator;  and (4)  it is unloaded,
weighed again, given a preliminary cleaning,  and again stored.
     Terminal elevators are  usually  operated  continuously, whereas
country elevators are not.   Certain  country elevator  operations,
such as loading and drying,  involve  2,000  hours per year  or less.
Other operations such as turning  and loading  are continuous in
most cases.
2.   Emissions and Costs of  Control
     The principal type of pollutant emitted  during animal feed
milling and grain handling operations is particulates.  Dusts,
resulting primarily from mechanical  abrasion  of individual grains,
are generated in both the milling operations  in grain mills and
the handling and cleaning processes  of  the elevators.   Terminal
elevators contribute the vast majority  of  the particulate emissions
from the grain milling and handling  industry.   Although country
elevators are of a smaller scale, most  of  them  perform basically
the same operations as the terminal  elevators;  therefore,  country
elevators, as well as terminal elevators,  require particulate
controls designed for maximum materials handling capacity.
     Particulate emissions from elevators  in  the 298 metropolitan
areas are estimated to equal 1,400,000  tons in  1967.  With industry
growth, these would increase to 1,730,000  tons  by Fiscal Year 1976
if the 1967 control level of 35 percent was maintained.  Installation
of controls, yielding a control level of 99 percent, would reduce
emissions to 26,100 tons in  Fiscal Year 1976.   Similarly,  feed mill
particulate emissions are estimated  as  274,000  tons in  1967 and
would grow to 347,000 tons by 1976 if the  1967  control  level of 35
percent was maintained.  With controls  increased  to 99  percent,  1976
emissions would be reduced to 5,410  tons.
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     Control of dust emitted from livestock feed milling and
grain handling to a required level of 99 percent can be accom-
plished with fabric filters.  At present, only about 50 percent
of terminal elevators and animal feed mills are assumed to be
equipped with cyclones which remove only 70 percent of the dust
conveyed to them [Ref. 30].   Costs are calculated on the basis of
installing fabric filters at all mills and elevators.
     With the implementation of these controls by Fiscal Year 1976
in the 298 metropolitan areas, it is estimated that the investment
requirement for the grain handling and the animal feed milling
industry will be $436 million and $27 million, respectively.  The
annual costs will amount to approximately $153 million and $11
million, respectively, for each segment of the industry.
3.   Engineering Basis of the Analysis
     Grain elevators are currently classified by an employment
size category index ranging from one to ten.  The corresponding
capacity in thousands of bushels is shown in Table IV-21.

       TABLE IV-21. - EMPLOYMENT SIZE INDEX VS CAPACITY
Employment Size
Category
1
2
3
4
5
6
7
8
9
10
Average Capacity
(1,000 bushels)
12.5
50
100
200
375
750
1,750
3,500
7,500
15,000
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     For the purpose of analysis,  country  elevators  are  considered
to be of employment size category  five  or  less;  terminal elevators
therefore are from employment size categories  six through ten.
At country elevators only unloading, weighing  and loading was
assumed to occur.  At terminal  elevators,  the  following  unit oper-
ations were assumed to occur:   unloading,  weighing,  transferring,
drying, cleaning, and loading.   On the  basis of  these  unit operations,
data [Ref. 31].  These are shown in Table  IV-22  below.

          TABLE IV-22. - ELEVATOR  EMISSION FACTORS
     Elevator Type
     Country
     Terminal
      Emission Factor
(pounds/year/1,000 bushels
         capacity)
             250
           1,600
 These were based on terminal elevators  operating 8,000 hours per
 year and  country elevators  operating  at 3,000 hours per year.
     Control costs  were based upon installing a single baghouse
 system  to control all unit  operations.   On the basis of present
 information  [Ref. 32], a total flow rate of 90 ACFM per bushel
 per hour  was utilized.  On  the basis  of this factor and an
 estimated fabric filter installed cost  factor of $3 per SCFM
 [Ref. 32], investment requirements were calculated.  Total annual
 costs were estimated as 0.35 times the  investment required.
 Table IV-23  presents the investment and annual costs as a func-
 tion of employment  size category.
     Animal  feed mill unit  processes  include unloading, screening
 and cleaning, drying and processing (milling).  Based upon
 available data [Ref. 31] an overall emission factor of 18 pounds
 per ton of product  was utilized.   Fabric filter costs were
 calculated on the basis of  1.38 ACFM  per hundred weight (cwt)
                              IV-69

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         TABLE IV-23.  - GRAIN ELEVATOR CONTROL COSTS
Size Category
1
2
3
4
5
6
7
8
9
10
Installed Cost
($1,000)
2.70
5.40
12.40
22.50
52.00
84.00
195.00
420.00
840.00
1,110.00
Total Annual Cost
($1,000)
1.00
1.89
4.34
7.88
18.20
29.40
68.20
147.00
294.00
383.00
production per day [Ref.  32].   Using the $3 per scfm Installed cost
factor and the 0.35 annual cost factor described above,  the control
cost - process size (in terms  of tons per day)  relationships shown
in Table IV-24 were developed.
        TABLE IV-24.  - ANIMAL FEED MILL CONTROL COSTS
Nominal Mill Capacity
(tons /day)
10.3
35.8
71.8
154
615
1,538
2,563
Installed Cost
($1,000)
10.00
10.00
10.00
13.00
33.00
84.00
144.00
Annual Cost
($1,000)
3.50
3.50
3.50
4.55
11.50
29.20
50.50
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4.   Scope and Limitations  of Analysis
     Only limited data on  the operation  of  grain  elevators and feed
mills were available  for this analysis.   So as not  to understate
the problem, the estimates  made  of  dust  emissions and the control
cost of reducing them to acceptable levels  are considered high.
These estimates should be  interpreted as  indicating a level that
probably would not be exceeded and  as an indication of  the order
of magnitude of the problem and  the controls required.
     Although the distribution of elevators and feed mills by
location and size was known, data were not  available showing
similar information by firm.  Some  of the largest firms in this
industry are well known publicly held corporations, but the
business structure, pattern of operations and sales, and financial
position of constituent firms were  not available.   The economic
analysis included in  this  report is, therefore, necessarily limited
to the general market impact of  control  costs.
5.   Industry Structure
     In 1967, there were 4,098 grain elevators in the 298 metropoli-
tan  areas with a storage capacity of 3.48 billion bushels and a
throughput capability of an estimated 9.76  billion  bushels.  Of this
number of grain elevators,  2,898 (71 percent) had a capacity of less
than 500,000 bushels  and,  in most cases,  would be classified as
country elevators.  The remaining 1,200  elevators (29 percent) are
classified as terminals and provide approximately 83 percent of the
storage capacity and  throughput  capability.  These  large elevators
include those located at major milling plants and terminals and are
normally a part of large corporate  producers of livestock and
poultry food, or a part of large scale shippers, in addition to
large elevator operators.   Many  small elevator operators also do
feed milling and mixing of custom feeds.
     Feed mills in the 298 metropolitan  areas in  1967 numbered
2,155.  The capacity, production and value  of shipments for these
mills are estimated at 55.5 million bushels, 46.2 million bushels
and  $3.8 billion.  Seventy percent  of these feed mills have fewer
than 20 employees.
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     Both the milling and handling sectors of the industry, therefore,
are characterized by a wide range of production capacities and con-
siderable variation of operating patterns.  A relatively small number
of large nationally known firms operate a substantial share of the
productive capacity, but there are also a very large number of indepen-
dent small- and medium-sized producers, providing a highly competitive
market.
6.   Market and Trends
     The market for grain tends to be dominated by the demand derived
from  consumption of the final products made from it, with govern-
ment price support and production controls setting a lower limit on
prices.  Grain handling costs make a relatively small contribution
to the delivered cost of grain and, since these functions are
essential and unavoidable to the rest of the industry, it would
appear that demand for handling services would show little sensi-
tivity to price.  Similarly, demand for livestock and poultry feeds
is relatively inelastic with regard to price.   However, large
segments of the market, such as feedlot operators, may choose to
reduce the amount of feed used when a rise in feed prices does not
coincide with an increase in the market price of meats.  The price
elasticity of demand for livestock and poultry feed, therefore,
depends upon price trends and price elasticity of the demand for
meat and makes it more difficult for feed mill operators than for
elevator operators to shift increased cost to the buyer.
7.   Economic Impact of Control Costs
     The cost of installing fabric filters on elevators was based
upon the distribution of plants by capacity.  It was assumed that
the elevators with less than 500,000 bushels capacity had no
effective control in 1967.  It was estimated that the required
investment for these elevators would average approximately $9,000
each.   The average investment would be considerably higher for
large terminal elevators as a result of their larger volume of
grain handling and since it was assumed that most of the grain
cleaning and drying is done there.  Average investment for elevators
over 500,000 bushels capacity is estimated at $77,700.  Total
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investment for control of the elevators in the 298 metropolitan  areas
is estimated as $436 million through Fiscal Year 1976,  including
investment for elevators built after 1967.
     The investment required for fabric filters to control emissions
from feed mills was estimated in relation to the normal daily produc-
tion and ranged from $10,000 for 10 to 100 tons per day and up to
$144,000 at 2,500 tons per day.  Mills with less than 100 tons per
day production predominate in the industry to such an extent that
the average investment per mill is only slightly over $10,000.   Total
investment for all feed mills, including capacity constructed after
1967, is estimated to reach $27.4 million through Fiscal Year 1976.
     Annualized control costs (operating expense plus depreciation
and finance cost) show a similar pattern.  Country elevator annual
cost averages just under $10,000 per year and terminal elevators
average approximately $78,000 per year.  Total annual costs for  all
elevators in  the 298 metropolitan areas are estimated as $153 million
by Fiscal Year 1976.  Annual cost for an average feed mill is esti-
mated to be $4,000 per year and the total for all feed mills would
approximate $11 million by Fiscal Year 1976.
     The annual cost of controlling elevator emissions is equal  to
$0.0127 per bushel of grain estimated to be handled in 1976 and  the
annual cost per ton of feed production in 1976 is estimated as $0.187.
In view of the relative insensitivity of demand for grain and feed to
price changes suggested in paragraph 6, above, it appears that these
costs will be largely reflected in prices.  It is unlikely that  an
added cost of one cent per bushel for grains priced from $0.70 to
$1.70 per bushel will change the market significantly.  Similarly,
no market effect is expected from an additional cost of 19 cents per
ton when added to feed averaging in the vicinity of $85 per ton.
Expressed another way, these costs of control will add approximately
$164 million  to the nation's annual food bill by Fiscal Year 1976 or
perhaps $0.75 per person.
                              IV-7 3

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G.   Gray Iron Foundries
     1.    Introduction
          Gray iron foundries produce castings, such as machine and
     automobile parts, from gray iron, pig and scrap.  To melt iron
     for casting, the industry utilizes three types of furnaces:
     electric arc, electric induction, and cupola furnaces.  The electric
     arc and electric induction furnaces, which together account for only
     seven percent of all castings, emit relatively small quantities of
     pollutants and were not included in the analysis.  This report focuses
     on control of pollutants from cupola furnaces.
          Cupolas are vertical cylindrical furnaces in which the heat for
     melting is provided by burning coke in direct contact with the metal
     charge.  Most foundry emissions emanate from this metal-melting opera-
     tion.
     2.   Emissions and Costs of Controls
          Carbon monoxide and particulates in the form of dust and smoke
     are the significant emissions from cupolas.  Particulates arise from
     fines in the coke and flux charge, from metal fuming, and from dirt
     and grease introduced with the scrap.
          In 1967, it is estimated that the industry averaged about 18
     percent control of carbon monoxide and 12 percent of particulates.
     Emissions within the 298 metropolitan areas amounted to 2,220 thousand
     tons and 166 thousand tons, respectively.  With industry growth, these
     emissions would increase to 3,420 thousand tons and 255 thousand tons,
     respectively, in Fiscal Year 1976.  Implementation of controls would
     result in 209 thousand tons of carbon monoxide and 29.1 thousand tons
     of particulates in Fiscal Year 1976.
          Carbon monoxide emissions can be reduced by the use of afterburners
     which oxidize carbon monoxide to carbon dioxide.  Afterburners in combina-
     tion with gas-cleaning equipment, such as wet scrubbers or fabric filters,
     can reduce emission levels of carbon monoxide and particulates from
     cupolas to achieve compliance with stringent process weight regulations
     for particulates and a 95-percent removal rate for carbon monoxide.
                                  IV-74

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     Of the control equipment presently capable of  particulate
removals in excess of 90 percent,  only  high-energy  wet  scrubbers
have been used on cupolas without  difficulty.   Several  foundries,
especially in the Los Angeles area,  are using  fabric  filter bag-
houses with some degree of  success.   Fabric  filter  systems, when
successful, require afterburners,  gas-cooling  equipment, high-temper-
ature filtration material,  and  decreased filtration velocities.  In
general, maintenance costs  of fabric filters are high and  the costs
of using them is greater than for  wet scrubbers.
     The total investment required to meet the standards by Fiscal
Year 1976 would be $317.3 million.  The corresponding annual cost
would be $108.2 million.
3.   Engineering Basis of the Analysis
     To date, the foundry industry has  been  a  consistent user of
high efficiency control equipment  on its numerous in—plant dust
problems in sand preparation, shakeout,  abrasive  cleaning and
grinding operations.  However,  equipment to  control the fume-laden
gases from the melting operation has been installed in only a few
locations.
     Data on the present levels of control for  particulates and
carbon monoxide were obtained from a joint APCO- Department of
Commerce survey.  From these data, regional  control level estimates
on a cupola by cupola bases were made.   Nationally, the overall
control levels for particulates and  carbon monoxide are 12 and 18
percent, respectively.
     Two bodies of data were available  to estimate costs of control-
ling emissions from cupolas in  gray  iron foundries.  Data describing
features of all gray iron foundries  that operate cupolas were ob-
tained by the Department of Commerce during  1968 via a mail survey.
The information gave the location  of all plants and the number of
cupolas and some facts on emission controls  presently installed for
most plants.  Cupola capacity ratings were not  reported.
     A representative sample of 67 foundries with cupolas was visited
by APCO personnel to obtain extensive data on control systems.   The
collected data included information  about investment and annual
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costs.  From the sample survey, information on the sizes of cupolas
in each plant was used to derive a distribution by size for the
total industry.  Data from the sample survey were also subjected to
statistical analyses to relate costs to cupola control factors.
Venturi scrubbers were selected as the particulate control device.
For venturi scrubbers, costs were a function of two factors, gas
volume and pressure drop.  Sample data were also used to estimate
gas volume as a function of melt rate.  Investment and annual costs
for venturi scrubbers are given in Table IV-25.  Afterburners were
selected as the control device for carbon monoxide.  However, the
data  from the survey, as presented in the table, does include costs
of installing and operating afterburners.  Therefore, separate cost
estimates were not made.  By using these cost estimates and the
distribution of cupolas, an average cost per control system was
estimated.

        TABLE  IV-25.  -  CUPOLA EMISSION CONTROL COSTS
Cupola Size
(tons /hour)
2.5
7.5
12.5
17.5
22.5
37.5
32.5
37.5
42.5
47.5
Number of
Cupolas
232
323
279
211
139
20
0
0
48
29
Control Costs
($1000)
Investment
103.5
179.0
246.7
318.4
386.2
457.8
529.4
604.9
678.1
752.0
Annual
31.2
54.0
74.5
96.1
116.6
138.2
159.8
182.6
204.7
227.0
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     When a foundry operates  two  cupolas  of  approximately  the same
capacities one emission control system is  used  for  the  pair.   It was
assumed that, where possible,  one system would  serve  two cupolas.
The data on foundries in each  area were screened, taking into account
cupolas that could be paired,  to  determine the  number of systems
required.  These estimates  and the estimate  of  average  control sys-
tem costs were then used to calculate an  estimate of  the investment
cost for each area.
     Annual costs were estimated  by multiplying the investment  cost
by 0.302.  This factor was  determined by statistical  analysis of
survey data and the estimates  allow,  in accordance with industry
practice, about 18 percent  for depreciation  and other capital-
related charges.   Annual depreciation and  capital costs for other
sources in this study, except  solid waste  disposal,  allow 20 percent.
     In those cases of foundries  reporting installed  control systems,
it was assumed that presently  installed mechanical collectors would
be replaced by venturi scrubbers  but  that  fabric filters, wet
scrubbers, and the one reported electrostatic precipitator would be
adequate.  No credit was allowed  in the cost estimates for the value
of mechanical collectors that would be  replaced.
4.   Scope and Limitations  of  Analysis
     This report is limited to control  of  the melting operations.
Nonmelting operations within foundries  are consistently controlled
with high efficiency control equipment  and are not included in the
analysis.
     The analysis of economic  impact  is limited to jobbing foundries,
since the financial structure  of  captive foundries is indistinguishable
from that of their parent company.  Impact on a captive foundry cannot
therefore be determined and its control costs are passed on directly
to the final product of the parent company.
5.   Industry Structure
     The gray iron foundry  industry consists of 1,446 plants that  are
located in the United States,  of which  77  percent (1,115)  are located
within the 298 metropolitan areas.  United States capacity for the
industry in 1967 was 17 million tons  of castings per year.   In the 298
metropolitan areas, capacity amounted to 14 million tons of castings
                              IV-7 7

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per year.  Production was 14.3 million tons per year for the United
States and 11.8 million tons per year for the 298 metropolitan areas
or about 83 percent of the United States production.
     Numerically, the gray iron foundry industry consists predominantly
of small establishments.  Yet production is dominated by a few large
firms.  The four largest companies accounted for approximately 27
percent of the industry's value of shipments in 1967, while the eight
largest accounted for 37 percent.
     There is a definite trend in the foundry industry toward fewer
but larger firms.  From 1959 to 1967, the total number of foundries
in the U. S. declined by almost 200, although the number of large
foundries increased.
     Many of the largest firms are "production foundries," which
have the capability of economically producing large lots of closely
related castings.  Most of the output of these "production foundries"
is captive (owned and controlled by other businesses).  In fact, almost
half of all gray iron production comes from captive plants which do not
generally produce for the highly competitive open market.
     Gray iron foundries range from primitive, unmechanized hand opera-
tions to heavily equipped plants in which operators are assisted by
electrical, mechanical, and hydraulic equipment.  Captive plants are
more likely to be mechanized and better equipped with emission control
equipment than are noncaptive plants.
     The nature of the gray iron foundry industry is such that foundries
can be found in almost all urban areas.  The economies of scale for the
industry do not prohibit the continued existence of relatively small
foundries.  Since many foundries are operated in conjunction with
steel-making facilities, they are concentrated in the "steel" states:
Pennsylvania, Ohio, Michigan, Illinois and Alabama.
6.   Market
     a.   Competition Among Sellers
          The gray iron foundry industry is characterized by intense
     competition among the many small jobbing foundries.  This fierce
     price competition has spurred a drive for lower operating costs
     and higher productivity gains.  Casting quality along with
                              IV-78

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engineering design services  available  to  the customers  are other
areas of increasing  competition.   Unfortunately,  many foundries
have had insufficient  capital  or  resources  to invest in cost-saving
and quality improvement  facilities rather than straight additional
capacity.  Larger foundries  have  a competitive advantage in that
they usually  can offer the services of better sales engineering
staffs,  are more mechanized, and  have  more sophisticated quality
control  equipment.
     The net  effect  is that many  small foundries  that cannot
cope with increasing needs for capital, demands for better quality
and service,  and rising labor costs are being forced out of busi-
ness.  The larger  and more stable firms are, in contrast,  increasing
their  capacities in  order to reduce unit costs and absorb the
additional demand.   Also, an increasing number of large purchasers
of castings  are establishing captive foundries in order to gain
a ready  supply of  quality castings.  However, these additions to
capacity have been unable to keep pace with the expansion of
demand and the loss  of capacity of closed foundries. As a result
users  are finding  it increasingly difficult to obtain an adequate
supply of specialty  iron castings.
b.   Customer Industries
      The major customers of the gray iron foundry industry are
also major constituents of the national economy.   The health of
 the industry is therefore closely related to the  health of the
gross  national product (GNP).  The major industrial markets for
 foundry  castings include motor vehicles, farm machinery, and
 the industries that  build equipment for the construction,  mining,
 oil, metalworking, railroad and general industry  markets.
      These industries are considerably larger and more  powerful
 than the gray iron foundry industry.  The individual customer
firms  have many times the assets  of the foundries from  which
 they buy.  With their financial strength and generally  greater
management expertise, such firms  are able to play the many small
foundries against  each other to maintain severe price competition
even under conditions of high demand for castings.
                         IV-79

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     c.    Foreign Competition
          Direct imports of castings as well as the castings in
     imported machine tools, autos, textile machinery, and internal
     diesel engine parts do enter the American market.  However,
     Department of Commerce statistics indicate a volume of only
     $2.25 million for direct imports in 1967.  This is estimated
     by the industry to be approximately one-quarter of the actual
     total.  Even if a total import volume of $9 million is assumed,
     imported castings and component castings are equivalent to less
     than one percent of the $2.7 billion value of shipments in the
     U.  S. that same year.
          Imports, therefore, do not constitute a major threat to the
     American gray iron casting market.  The high cost per ton of
     shipping compared to the relatively low cost per ton of produc-
     tion is probably the most significant barrier to imports.
 7,.   Trends
     The foundry industry expects its market to continue to grow at
the average historical growth rate of its customer industries.  This
rate is expected to average six to seven percent per year through 1980
but may be somewhat less for the period of 1970 to Fiscal Year 1976.
By 1975, total foundry production volume will have to increase by
52.9 percent over 1969 just to keep up with demand.  For 1980, the
projected increase is 90.2 percent over 1969 volume.
     During the period from 1958 to 1967, the price of gray Iron
castings rose steadily at a rate of 2 percent per year.  At the same
time, the prices of the two major raw materials, pig iron and scrap
iron, have fallen at an annual rate of 2.3 percent.  However, while
material costs have declined, labor costs have advanced more rapidly
than the price of castings, keeping continued upward pressure on price.
8.   Economic Impact of Control Costs
     a.    Control System Costs
          Full implementation of controls on all facilities which
     existed in 1967 would yield a total annual cost of $69.4 million
     and in Fiscal Year 1976 the total annual cost would be about $108.2
     million.  As production volume within the 298 metropolitan areas
                             IV-80

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was 11.8 million tons  in  1967  and  is  estimated  to  be 18.0 million
tons in Fiscal Year 1976,  the  average cost  of control per ton
would be $5.88 and $6.01,  respectively.
     No valuable materials, which  could  serve to compensate for
control costs, are recoverable from foundry emissions.
     Currently, air pollution  control increases the cost of
castings for  large foundries by about 0.7 percent.  With small
single  cupola foundries,  added cost averages about 3 percent
of the  production  cost.   These added costs  compare to average
profit  rates  before  tax of 6.8 percent for  large foundries  and
5.8 percent for  small foundries.  To small  foundries, control
costs represent  a  reduction in profit margins of over 50 per-
cent, while margins  for larger firms would  be reduced only  11
percent if costs could not be  passed on  to  customers.  Invest-
ment in air pollution control  equipment  would equal approximately
5 percent  of  the value of capital  for the largest  firms and as
much as 25 percent for the smallest firms.   The evidence of these
indicators suggests  that the  impact of pollution control is much
greater on the small  jobbing  firms under a  million dollars  in
value of  shipments than on those with greater shipments.  The
industry  generally can little  afford a reduction in profit  rate,
as its  rate of 6.8 percent return  on investment is already  below
the all-manufacturing average  of 8.1 percent.
      The large investment in pollution control  equipment, relative
 to the  book value  and profitablity of many  foundries, presents a
 serious problem of financing the investment. The foundry industry
generally is  not an  attractive investment in stock or bond  markets
due to  its low rate  of return and  slow profit growth.  Neither is
it a good risk for commercial banks due  to  the  high ratio of con-
 trol investment  to book value of many small foundries and the
unpfofitability  of the control investment.   The Small Business
Administration is  currently the only source of  funds available
to many foundries.   The SBA prefers to guarantee loans made by
banks but will pay out funds  directly in some cases.
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b.   Impact on the Industry
     The economic impact of pollution control costs on an industry
varies with the industry's ability to pass cost on to the consumer
in the form of higher prices.  This ability is largely dependent
upon elasticity of demand for the product, the degree to which
the volume of sales declines in response to price increases.
Demand for castings is relatively inelastic, since most castings
are inputs for the production of more complex final products and
constitute a small portion of the cost of the final product.
Also, possible substitute products, such as aluminum, steel,
and other metals, are somewhat more costly than gray iron and are
usually subject to the same upward price pressures such as rising
labor costs and pollution control costs.  Thus, a small price
increase due to pollution control will have little effect on the
market for gray iron.
     Despite inelastic demand, sharp competition among the many
jobbing foundries will make price adjustments for control cost
difficult for those foundries that experience higher than average
costs.  Large mechanized firms and those smaller firms that are
located outside of the 298 metropolitan areas will incur lower
control costs than will other foundries.  These lower cost foundries
will establish price levels that prevent the less efficient firms
from raising prices sufficiently to cover their control costs.  The
average price of castings is expected to increase by about two
percent in response to stringent air pollution control regulations.
Such a price increase would leave approximately one-third of the
firms in the industry with reduced profit margins.  These firms
would be forced into marginal or sub-marginal financial positions.
     The nonuniformity of control regulations and costs, along
with the lack of investment capital, will force most foundries
to postpone implementation of control for as long as possible.
Many firms, faced with reduced profit margins and an inability
to raise capital for pollution control will be forced to merge
or go out of business.  Some remaining firms will continue to
operate at reduced profit rates.  However, the larger, more
                       IV-82

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stable foundries will increase their capacity to meet expand-
ing demand, improve efficiency and continue to operate at
reduced profit rates.  In effect, pollution control will accel-
erate the trend toward fewer and larger foundries.  It is
apparent that the gray iron foundry industry will be among
those industries most severely affected by air pollution control.
                        IV-83

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H.   Iron and Steel
     1.   Introduction
          The iron and steel industry includes plants ranging from inte-
     grated steel making operations (blast furnaces, steel making furnaces,
     coke ovens, sintering plants, scarfing machines, rolling mills, etc.)
     to much smaller operations with a few steel making furnaces producing
     small quantities of specialty steels.  The first step in the conver-
     sion of iron ore into steel takes place in the blast furnace.  The
     blast furnace produces a material commonly referred to as pig iron.
     Steel making furnaces refine the pig iron and/or steel scrap into
     steel.  Three types of steel making furnaces are in common use; these
     are the open hearth furnace, the basic oxygen furnace and the electric
     steel making furnace.  Sintering plants are designed to convert iron
     ore fines into a product more acceptable for charging into the blast
     furnaces.  Scarfing is an operation which removes surface defects
     from steel.  Coking is an operation in which bituminous coal is
     converted into coke, the chief fuel used in blast furnaces.   Blast
     furnaces are always well controlled to prevent the emissions of
     particulates; while the gaseous emissions are fully utilized in
     the production of process heat.  At present, very little is  known
     about the emissions or present control patterns for scarfing machines.
     The full control of coking operations, at present, is not considered
     to be technically and economically feasible.  Therefore, this report
     focuses on the emissions and air pollution control costs of  the
     sintering and steel making operations.
     2.   Emissions and Costs of Control
          This report focuses on two air pollutants:  particulates and
     fluorides.   Carbon monoxide, a potential emission from basic oxygen
     furnaces and blast furnaces is usually completely controlled.  Particu-
     late emissions result from the sintering operations as well  as from
     all the steel making furnaces.  Based upon the best available data
     the average level of particulate control in 1967 is thought  to have
     been about  55 percent fbr these unit operations.  To comply  with
     the Clean Air Act by Fiscal Year 1976, an average level of particu-
     late control of 97 percent will be required.  Therefore, particulate
                                 IV-84

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emissions would be reduced from a potential  of  1.460  thousand tons
in Fiscal Year 1976 with the same controls as in  1967 to  93 thousand
tons in Fiscal Year 1976 with 97 percent  control.
     Fluoride emissions occur during  steel making operations in  all
three furnace types.  It is estimated that in 1967 the fluoride
emissions were 26,400 tons and the  average level  of fluoride control
for the industry was about 30 percent.  By Fiscal Year 1976,  to
comply with  the Act, an average level of  control  of 89 percent will
be required.  With these controls,  fluoride  emissions would be
reduced from a potential of 35,200  tons to 5,200  tons.
     In order to implement the required increases in  air  pollution
control levels by Fiscal Year 1976, it is estimated that  an invest-
ment of $981 million will be required, and that total annual  cost
will be $507 million.
3.   Engineering Basis of the Analysis
     The processes considered for the cost analysis in this section
were the following:  open hearth furnace, basic oxygen furnace,
electric arc furnace, and the sintering operation.
     Particulate control levels are well  below  technically  feasible
levels resulting in annual national emissions of  about 1.5  million
tons.  On  the other hand, carbon monoxide, a potentially  significant
emission from the basic oxygen furnace, is controlled to  a  great
extent by  burning in waste heat boilers or in nonproductive complete
combustion of off-gases to convert  the carbon monoxide to carbon
dioxide.
     Totally uncontrolled rates of  particulate  emissions  vary from
process to process.  Table IV-26 presents the emission rates  for
each process.
     No one  has attempted a comprehensive analysis of the present
level of particulate control levels in the iron and steel industry.
However, some information [Refs. 14,  33,  34], fragmentary as  it is,
was used to  set average nationwide  control levels for the various
processes.   These are presented in  Table  IV-27.   For  this table
and the rest of the discussion of present emission estimates, open
hearth control facilities are assumed to  have been installed only
where oxygen lancing is practiced.
                             IV-85

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    TABLE IV-26. - UNCONTROLLED PARTICULATE EMISSION RATES
    Process
Open hearth (nonoxygen lanced)
Open hearth (oxygen lanced)
Basic oxygen
Electric furnace
Sintering (windbox)
Sintering (discharge)
                                        Emission Rate
                                      (Ib/ton produced)
                   12
                   22
                   46
                   11
                   20
                   22
Source:  Draft report, "Air Pollutant Emission Factors."  APCO,
         August 1970.

        TABLE IV-27. - PARTICULATE CONTROL LEVELS (1967)
      Process
Controlled Production
      (percent)
  Average Control
Efficiency (percent)
 Open hearth furnace
 Basic oxygen furnace
 Electric furnace
 Sintering (windbox)
 Sintering (discharge)
          27
          100
          61
          90
           0
       90
       95
       90
       75
      Required particulate removal efficiencies for the various
 processes were calculated as a function of process size on the
 basis of the process weight rate standard and are presented in
 Table IV-28.
      Only rarely are fluorides associated with the raw materials,
 other than fluorspar flux, used in iron and steel making.  In the
 few instances when fluorides have been reported in the iron ores,
 fluoride emissions appear only in the blast furnace slag or in the
 sintering windbox off-gases.  Since last year's costs include high
 energy wet scrubbing of windbox off-gases and since fluorides from
 sintering are a rare occurance, these sources will not be con-
 sidered further.
                              IV-86

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    TABLE IV-28. - REQUIRED REMOVAL EFFICIENCIES FOR EMISSION SOURCES^/
Emission
Source
Open hearth furnace-











Basic oxygen furnace





Electric arc furnace






Sintering machine




Sintering discharge




	 — — - — _ 	 .
Capacity
(tons /melt)
50
100
150
200
250
300
350
400
450
500
550
600
50
100
150
200
250
300
25
50
100
150
200
250
(tons/day)
1000
2000
3000
4000
5000
6000
1000
2000
3000
4000
5000
6000

Required
Efficiency
(percent)
89.5
91.4
92.3
94.0
94.9
95.6
96.1
96.4
96.7
97.1
97.3
97.5
98.0
99.0
99.3
99.4
99.5
99.6
84.0 "
87.0
89.0
92.0
94.0
95.0
(percent)
95.0
97.0
98.0
98.3
98.6
98.8
95.0
97.0
98.0
98.5
98.7
98.9
—   Based on process weight rate standard.
2 /
—   All open hearth furnaces are assumed in this study to be oxygen
lanced prior to installation of control equipment.
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     However,  in the manufacture of steel,  evolution of fluorides
as HF and SiF  and entrained particulates does occur in the various
steel making furnaces [Ref.  28].  Significant fluoride emissions
occur from the operation of  three major steel making furnaces.
Based upon data given in Singmaster and Breyer [Ref. 28] Table IV-29
has been developed relating  furnace type, amount of fluorspar
(spar) used, and uncontrolled fluoride emissions.
     On the basis of very minimal information, it would seem that
the form of the fluoride emissions is dependent upon furnace type.
Present indications are that less than one percent of the fluorides
emitted from basic oxygen furnaces and open hearth furnaces are
in the form of particulates, whereas 85 percent of the fluoride
emissions from electric furnaces are in the particulate matter.
       TABLE IV-29. - FLUORIDES IN IRON AND STEEL MAKING
Furnace Type
Open Hearth
Basic Oxygen
Electric
Amount of
Spar Used
(Ibs./ton steel)
3.75
11.42
6.77
Uncontrolled
Fluoride Emissions
(Ibs./ton steel)
0.65
2.0
1.2
     At present, there have been no fluoride emission standards
developed specifically for any industry other than aluminum and
fertilizer.  The standards proposed for these two are so highly
specific to these industries that no simple correspondence can be
developed between them and any other industry.  Therefore, on the
basis of a tentative agreement between APCO and RTI personnel,
the following standard is proposed:
     a)   Gaseous fluorides will be removed by at least 95 percent.
     b)   Particulate fluorides will be removed to a level con-
          sistent with total particulate removals as specified by
          the San Francisco Bay Area Standard.  In other words,
          whatever fluoride removal is affected when total partic-
          ulates are controlled will be acceptable.  In the case
          of the iron and steel industry, significantly high
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               fluoride particulate removals can be expected due to the
               high total particulate removals required for all steel
               making furnaces.
          Based on these required removal efficiencies, as well as
     particle size distribution functions, the choice of feasible control
     systems was made for the various processes.  From the set of feasible
     alternatives, industry practice and other expert opinion was used to
     arrive at the control system requirements shown in Table IV-30.
                  TABLE IV-30.  - SELECTED CONTROL  SYSTEMS
Process
Basic oxygen furnace

Open hearth furnace
Electric arc furnace
Sintering (windbox)
Sintering (discharge)
Control System
venturi scrubber
*
venturi scrubber
fabric filter
venturi scrubber
venturi scrubber
Comments
upgrade from 95%

50" w.g.
high temperature
20" w.g.
10" w.g.
     At present,  open hearth furnaces (all oxygen lanced) have  a  50-50
combination of scrubbers and precipitators.
          Control cost estimating relationships adopted from engineering
     analyses developed by the Swindell-Dressier Corporation for each
     process.  Data were available on capacities and locations of all
     furnaces [Ref. 35],  Sintering machine locations were known from
     Reference 25, but capacities had to be estimated from the known
     range of capacities (2000 to 6000 tons per day) and the reported
     grate dimensions which were assumed to be related to capacities.
          Control cost data were obtained which presented investment and
     operating costs for the extreme ends of the expected capacity
     range [Ref.  36],   Intermediate levels and capacities were calcu-
     lated for each process using a cost function:
                             b
                       y « ax
              where:   y - control cost;
                       x « capacity;  and a and b are parameters that
                           depend on each process.
     Cost  parameters  for all  furnace and machine types are presented
     in Table  IV-31.
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                                               TABLE IV-31.  -  COST ESTIMATING PARAMETERS
Unit
Operation
Open hearth furnace
Basic oxygen furnace
Electric arc furnace
Sintering (windbox)
Sintering (discharge)
Control
Equipment
high, energy venturi scrubber
high energy venturi scrubber
fabric filter
medium energy venturi
scrubber
medium energy venturi
scrubber
Units
of
Capacity
tons /melt
tons /melt
tons/melt
tons of sinter/day
tons of sinter/day
	 , ...... ., A
Cost Estimating Parameters
"a"
Investment
8,308
35,775
12,902
837
15,835
Annual
6,576
16,318
8,400
518
5,541
"b"
Investment
0.7
0.7
0.7
0.8
0.3
Annual
0.7
0.8
0.7
0.7
0.3
VO
o
              The  cost function is y = ax , where y - control cost, x - capacity, and "a" and "b" are cost parameters that depend
         on the type of process.  The same function was applied to the calculation of both annual and investment cos-ts by simply
         using the appropriate a's and b's.  To illustrate the use of the parameters, suppose that it is required to determine  the
         investment and annual cost of controlling a basic oxygen furnace with a capacity of 400 tons per melt.  The investment cost
         (y) is therefore $35,775 (400)°-7 = $2.36 million with an annual cost(y) = $16,318 (400)°-8 = $1.96 million.

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     All types of furnaces and machines were  assumed  to need  some
additional control.  Basic oxygen  furnaces were  assigned high
energy wet scrubbers; open hearth  furnaces, high energy wet
scrubbers; electric arc  furnaces,  fabric  filters;  and sintering
machine windboxes and discharges,  medium  energy  wet scrubbers.
     The 1967 average levels of  control and the  national percentages
of capacity controlled were known  for  all furnaces and machines;
regional data were lacking, however.   Accordingly, the estimated
relationship between national and  regional control levels for the
gray iron foundry industry [Ref. 37] was  applied to the iron  and
steel industry.
     The cost relationship for electric arc furnaces was calculated
using data from Reference 36, assuming two furnaces exhaust into a
single control system with appropriate staggering of operations.
If possible, two furnaces of equal capacity were paired; if not,
furnaces with no more than a 25  percent difference were paired.
     Control costs for electric  arc furnaces were calculated  using
the y = ax  cost function; when  two furnaces of  different capacities
were controlled, the larger capacity was  assumed.  Control costs
for single furnaces were calculated by dividing  the control cost
for two furnaces (each of which  has a  capacity equal to the single
furnace) by 1.4 to allow for a reduced ducting and blower require-
ment as well as reduced  average  load.  These calculations yielded
basic costs at the Swindell-Dressier efficiency  level  [Ref.  36J.
The basic costs were then adjusted to  the control efficiency re-
quired by the selected standards of this  study by using a cost
multiplier as described  in Chapter 2,  "Study Methodology."  The
cost multiplier was again applied  to furnaces to which existing
control levels had been  assigned to obtain the cost for the re-
quired control efficiency.  When the difference  between the costs
for required efficiency  and current efficiency was positive, it
was recorded as the net  control  cost;  no  negative costs were
recorded, although they  did occasionally  occur where the present
level of control exceeded the standard.
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4.   Scope and Limitations of Analysis
     This analysis focuses on integrated basic steel  firms.   Air
pollution emissions that exceed the standards assumed for  this
study are produced primarily by the sintering plants  and open hearth
or basic oxygen furnaces of basic steel producers.  Electric  furnaces
are  also emission sources to a lesser extent.  However, when  used
by secondary steel producers making specialty high alloy steels,
electric furnaces are normally controlled to a high level  of  efficiency
to avoid loss of valuable alloying metals.  Secondary  steel firms,
therefore, are not generally faced with additional control costs.
     Data on the operation of the steel industry are more  available
than for most industries.  Nevertheless, the steel market  is  compli-
cated by the vast variety of distinct products sold and the variations
of product mix from one company to another.  Comparison of the impact
of a change in the cost of producing raw steel as it affects  different
companies is very difficult.  Detailed data on such aspects of
financial management is depreciation policy, net value of investment,
pricing policy, and tax accounting are also not available,  making it
especially difficult to estimate profit potential for these firms.
5.   Industry Structure
     In 1967 there were 142 steel plants in the United States, of
which 134 were located in the 298 metropolitan areas.   The capacity,
production and value of shipments of these plants in the United
States were 165 million tons, 127 million tons and $13.3 billion,
respectively.  In the metropolitan areas the capacity of the plants
was  61 million tons, production was 124 million tons,  and the value
of shipments was approximately $13.1 billion.
     There were 86 steel companies in the United States in 1967.
Twenty one integrated firms accounted for more than 90 percent of
the  1967 steel production in the United States.   They include all
of the larger firms in the industry, with outputs in 1967 ranging
from just under 1 million tons to more than 30 million tons.   Sales
for these companies varied from approximately $85 million to more
than $4 billion in that year and profits from a high of $172 million
for one firm to a loss of nearly $7 million for another.  The two
largest firms produced approximately 40 percent of the steel produced
in 1967 and eight firms produced over 75 percent of the industry
output.

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6.   The Market
     The steel industry is usually described  as  an  oligopoly  char-
acterized by administered prices  and price  leadership.   Typically,
list prices, which are virtually  the same for all firms, remain
unchanged for a period of time without  reacting  to  minor changes
in market conditions.  Although individual  prices may be shaded
through the use of special discounts or premiums, the primary
adjustment of company policy  to short term  market changes is  to
vary output.  When price changes  do occur they are  usually initiated
by one of the largest firms and all other companies quickly change
their price lists following the pattern set by the  price leader.
Competition emphasizes product quality  and  customer service more
often than price.
     Steel is sold to customers in every major industrial sector
of the economy.  The major purchasing industries, however,  are
motor vehicles, heavy equipment and machinery, containers, and
appliances.  These industries strongly  follow the swings of the
business  cycle and as a result cyclical changes  in  the national
economy tend to have a magnified  effect on  the market for finished
steel.  The basic position of steel in  the  economy  also indicates
the probability that the long run trend of  the domestic market for
steel will be one of steady expansion and gradually rising prices.
     The  steel industry is also subject to  significant foreign
competition.  Foreign participation in  the  U.  S. steel market
increased during the 1960's and posed a real  threat to the market
for some  products.  The export market for U.  S.  steel did not
balance imports during those  years.  This competitive pressure
was eased by the signing of an informal agreement in December,
1968, with the Japanese Iron  and  Steel  Exporters Association and
with the  association of Steel Producers of  the European Coal and
Steel Community to limit exports  to the United States for the years
1969 to 1971.  This agreement, limiting increases in shipments from
the countries involved to not more than 5 percent per year, appears
to be effective and may well  be extended.   Thus  the industry is
partially shielded from some  foreign competition.   There has been
a tendency for foreign steel  producers  to concentrate on the sale
of high priced speciality steels  in this country, but the protection
of the agreement has been effective for basic steel producers [Ref. 38].

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7.   Trends
     Investment in new steel capacity has been heavy over the last
decade and is predicted to continue at a high level.  The trend is
away from the older open hearth furnaces in favor of construction
of the more efficient basic oxygen and electric furnaces.
     Prices have been rising following the general inflationary
trend of the economy.  It is predicted that prices may rise more
slowly over the years to 1976, but the upward trend is expected to
continue.  The trend of profits is difficult to determine because
net income after taxes for these companies varies substantially
from year to year.  Among the factors causing these fluctuations
are very heavy "start up" costs when new facilities are put into
production, the impact of strikes, changes in accounting and tax
practices, and the tendency of firms to change output rather than
price in response to short term market changes.
8.   Impact of Control Costs
     The investment requirement and annual cost of air pollution
control for each steel firm will vary depending on the number and
size of its plants and the type and capacity of its steel making
furnaces.  Cost estimates are calculated on the following equip-
ment designations:  high energy wet scrubbers for basic oxygen
furnaces; high energy wet scrubbers for open hearth furnaces;
fabric filters for electric arc furnaces; and medium energy wet
scrubbers for sintering machine windboxes and discharges.  Both the
investment requirement and the annual costs for each of these control
devices varies in relation to the capacity of the furnace or
machine and has been costed on the basis of data specifying indi-
vidual capacities in place.  The other major determinant of cost
differences among plants and firms is the number of each type of
furnace in use.  For example, an open hearth furance of 180 tons
per heat capacity would have an annual control cost, for operation,
maintenance, and depreciation, of $249,000 per year, based on 1967
prices.  The equivalent annual cost for an electric arc furnace of
180 tons per heat capacity would be $490,000 per year and for a
                             IV-94

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basic oxygen furnace of  the  same  capacity would be $1,040,000  per
year.  It should be noted  in this comparison that  the basic  oxygen
furnace has a much shorter heat time and therefore a higher  annual
capacity than the electric arc furnace,  which in turn has  a  shorter
time per heat than the open  hearth furnace.   Thus  the cost per ton
of steel produced is not in  the same proportion as the annual  cost,
but depends upon the production rate for each furnace.
     The impact of control costs  on firms may be shown by  comparison
of three hypothetical examples designed  to show the range  of cost
per  ton of steel production. A steel company with total productive
capacity of approximately  9  million tons, producing 6.4 million
tons of finished steel per year in 1967, 1/3 from basic oxygen
furnaces and  2/3 from open hearth furnaces,  would  incur estimated
costs  as follows:   total annual cost, $8,527,000;  annual cost  per
ton  of raw steel produced, $1.14; annual cost per  ton of finished
steel  products,  $1.33.   If this firm does not have to incur  new
costs  for controlling its  sintering machines, as assumed in  this
estimate, the cost per ton of finished steel could be as low
as $0.90.
     Estimated costs for a typical smaller firm having an  annual
capacity of 2.24 million tons and production of 1.58 million tons
of finished steel produced entirely with open hearth furnaces  shows
a total annual cost of approximately $3,000,000, or $1.91  per  ton
of finished steel.  Similarly, a  typical firm producing 1.7  million
tons of finished steel in  1967 with a capacity of  2.3 million  tons,
using  only basic oxygen  and  electric arc furnaces,  would have  an
estimated annual cost of only $623,000,  or $0.37 per ton of  finished
steel.
     Comparison of  these cost estimates  indicates  that the impact
of control costs will probably be least  on firms using many
relatively small electric  arc furnaces and greatest for firms
producing primarily with open hearth furnaces.   The estimated  costs
are  relatively small in  relation  to the  price of finished  steel
of $170 per ton in 1967, but differentials of the  size indicated
may  accelerate the existing  trend in the industry  to retire  older
open hearth furnaces.
                        IV-95

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     In the light of the pricing policies of the steel industry
as described in Section 6, above, it is probable that most of the
indicated costs will be reflected in increased prices by 1976.
The firms that normally exercise price leadership in the industry
are among those with substantial open hearth capacity and will
therefore tend to reflect pressure to raise prices to cover the
higher range of control costs.   In a period of generally rising
prices, an increase of the magnitude indicated for steel prices
should not produce significant  changes in the market position of
the firms
                          IV-96

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I.    Kraft (Sulfate) Pulp
     1.    Introduction
          The pulp industry manufactures pulp from wood and other
     materials for use in making paper and related products.  The
     methods used to produce pulp from wood may be classified as
     chemical or mechanical, only the chemical methods causing
     significant air pollution problems.  Two chemical pulp produc-
     tion methods, sulfite and sulfate (kraft), account for approxi-
     mately 75 percent of the total industry output.  Only kraft
     pulping, which accounts for approximately 64 percent of the
     industry output, is considered in this report.  Even though
     sulfite pulping is a potentially serious source of sulfur dioxide,
     when waste liquor incineration is practiced, the control costs are
     more than offset.  This is because the sulfur dioxide emissions
     from the sulfite process usually are controlled since the value of
     recovered heat and process chemicals offset the annual costs
     of control.
          In the kraft process, woodchips are cooked in a liquor com-
     posed of sodium hydroxide and sodium sulfide.  This separates the
     lignin from the cellulose.  Pulp is then produced from the cellulose.
     The separated  lignin is burned as a fuel in the recovery furnace
     and the chemicals in the salt cake solution are recycled.
     2.   Emissions and Costs of Control
          In kraft  pulp mills, four main processes emit significant
     quantities of  particulates:  recovery furnaces, smelt dissolving
     tanks, lime kilns, and bark boilers.  Although there are emissions
     of sulfur dioxide, these almost never exceed the 500 p.p.m. standard.
     Since the economics of the kraft method depend upon recovery of
     chemicals, emissions from the first three processes are controlled
     to prevent the loss of these chemicals.  Particulates from bark
     boilers are also controlled, but to an extent which falls short of
     the standard adopted for this study.  Overall, the average industry
     control level  for particulates in 1967 was 81 percent.  To meet the
     standard by Fiscal Year 1976, the average industry control level
                                 IV-97

-------
 would have to reach 98 percent.  Without implementation of the standard,
 particulate emissions would reach 847,000 tons for kraft plants within
 the 298 metropolitan areas.  Assuming implementation, this could be
 reduced to 120,000 tons.
      By Fiscal Year 1976 an investment of $73.0 million will be
 required to achieve full implementation for the plants within the
 298 metropolitan areas.  This would result, by Fiscal Year 1976,
 in an annualized cost of $30.3 million.
 3.   Engineering Basis of the Analysis
      The basic engineering approach taken to estimate air pollution
 control costs for the pulp and paper industry consisted of:   (a)
 an evaluation of the various production processes commonly found
 within the industry, (b) an analysis of the pollutants involved,
 their uncontrolled emission rates,  present levels of control and
 final levels as required by the various standards adopted for this
 study, and (c) an evaluation to select the most satisfactory control
 systems to achieve the required levels.
      The three most important classes of pulp-making operations
 from the standpoint of potential air pollutant emissions are:  Ca)
 the sulfate (kraft) process, (b) the sulfite process, and (c) the
 neutral sulfite semi-chemical process.  The sulfite process  is a
 potentially serious source of SO^;  however, several factors  con-
 tributed to the omission of this process from this study. First,
 in those plants which do not practice waste liquor incineration,
 SO. emissions are practically negligible.   In those plants practicing
 incineration,  chemical and thermal  recovery is economically
 attractive [Refs.39, 40].  Therefore, this report assumes that all
 sulfite plants have or will soon have chemical and thermal recovery
 systems which profitably reduce SO. emissions to less than the 500
 ppm limit.
     In neutral sulfite semichemical (NSSC) pulping, partlculates are not
a problem; therefore, NSSC pulping was not considered for the purposes
of this s tudy.
     The kraft process, however, represents an emission source which must
be considered.  Particulate emissions from this pulping process are being
emitted to the atmosphere in quantities exceeding the standard adopted
                               IV-98

-------
for this study.  The kraft pulping process includes the following unit pro-
cesses:   (a) black liquor recovery furnaces,  (b) lime regeneration kilns,
(c) smelt-dissolving tanks, and (d) bark boilers.•*
     Uncontrolled rates of particulate emissions are presented in Table IV-32.
        Table IV-32.  - UNCONTROLLED PARTICULATE EMISSION RATES
             Process
      Recovery  furnace
      Lime kiln
      Smelt-dissolving tank
      Bark boiler
     Emission Rate
(Ib/ton air  dried pulp)
        150
         94
         20
         18
    Source:  References  14  and 41.
      The emissions from the recovery furnace and lime kiln consist mainly of
 very fine sodium and calcium salt fumes, while those of the smelt tank  are,
 very fine mists containing carbonates and sulfides of sodium.   Presently,  all
 of the processes are, on the average, controlled to some extent.   Table IV-33
 presents estimated particulate control levels.
         Table IV-33. - ESTIMATED PARTICULATE CONTROL LEVELS AND
                      EMISSION RATES AFTER CONTROL
Process
Recovery furnace
Lime kiln
Smelt-dissolving tank
Bark boiler
Control
Ef f. (percent)
86
80
50
75
Emission Rate After Control
(Ib/ton air dry pulp)
21.0
18.7
10.0
4.5
       Based upon the process weight rate particulate emission standard,
  ultimate removal efficiencies were calculated for the various processes
  as a function of gas volume as presented in Table IV-34.
       The relationship between gas volume and production for each  process
  is given in Table IV-35.
  ^   Non-bark burning boilers are also present, but are considered under
  industrial boiler sources.
                                      IV-99

-------
  Table IV-34. - REQUIRED REMOVAL EFFICIENCIES FOR KRAFT PROCESSED
Process
Recovery furnaces





Lime kiln










Smelt-dissolving
tanks




9 /
Bark boilers-'








3
Gas Volume (10 acfm)
25
75
125
175
225
275
325
5
15
25
35
45
55
65
75
85
95
105
2.5
7.5
12.5
17.5
22.5
55.0
16
24
32
40
48
56
64
72
80
Percent Efficiency Required
95.0
97.8
98.5
98.9
99.1
99.3
99.4
96.9
97.8
98.2
98.3
98.6
98.8
98.9
99.0
99.1
99.2
99.3
84.0
93.2
95.2
96.0
96.4
98.8
93.0
93.0
93.0
95.0
95.0
95.0
96.0
96.0
97.0
—    Gas volume data taken from a 1969  APCO summary^of unpublished surveys;
 required efficiencies were calculated.
 2 /
—    Bark boilers were considered in this  study as  a process step; there-

 fore, the more stringent process weight rate standard was applied instead

 of the Maryland Combustion Regulation.
                                 IV-100

-------
    Table  IV-35.  - GAS VOLUME VS. PRODUCTION FOR KRAFT PROCESSES
          Process
  Recovery furnace
  Lime kiln
  Smelt-dissolving tank
  Bark boiler
          Gas Volume Production
             (acfm/100 T/D)
                 25,000
                  3,200
                  3,100
                  8,000
     100 tons per day air-dried pulp.
Adapted from Reference 41.


     To achieve  the  required  control efficiency levels, the control systems
 presented in Table IV^36 were selected.

               Table 17-36. - CONTROL SYSTEMS SELECTED
        Process
  Control System
Pressure Drop
   Recovery furnace
   Lime kiln
   Smelt-dissolving tank
   Bark boiler
Venturi scrubber
Venturi scrubber
Venturi scrubber
Multi-cyclone
  30" w.g.
  20" w.g.
  10" w.g.
 4-5" w.g.
      Assumed to follow existing electrostatic precipitator.
      Data on location and total capacity of each kraft  pulp mill  [Ref .42]
 and on  the capacity of each lime recovery kiln within each  mill  [Ref. 43j
 were available  for the 298 metropolitan areas.   The data on total capacity
 of  each mill were  used along with data from a APCO survey  [Ref.  44] to
 determine the capacity of recovery furnaces,  smelt-dissolving  tanks, and
 bark-burning boilers in each mill.
     All  recovery  furnaces were assumed to be of equal  size within a plant
 and  to  have  an  associated smelt-dissolving tank  of corresponding  capacity.
                                LV-101

-------
For each mill, a pair of equal-sized bark boilers were assigned a total capa-
city appropriate to the total mill capacity and a bark factor  (tons of bark
per ton of pulp) was used.-'  A complete list of lime mud recovery kilns by
size was obtained from Rock Products [Ref. 43J.
     The type of control varied with the type of process equipment.  Recovery
furnaces and smelt-dissolving tanks were assigned venturi scrubbers that use
a weak black liquor scrubbing medium; lime kilns were assigned venturi scrubbers;
and bark boilers were assigned specially-designed multicyclone collectors.
     Control costs were calculated from the data in Tables iy-37 through. IV-40.
Gas volume - equipment cost and gas volume - annual operating cost relationships
are presented for the various required control systems in Figures IV-,8 4:hj:ough
IV-14.  Installed costs are 3 times the equipment costs for the black liquor
scrubbers, 2 times for the wet scrubbers, and 2  times for the multicyclones.
Annual costs are operating costs plus 20 percent of the investment.   The
resulting costs for controlling each mill were totalled for each of the 298
metropolitan areas.
     Table IV-37. - KRAFT RECOVERY FURNACE EMISSION CONTROL COSTS
Furnace Gas
Volume (103 acfm)
25.0
75.0
125.0
175.0
225.0
275.0
325.0
Associated Capacity
(tons /day)*
96
290
485
680
870
1065
1260
Investment Cost
($1000)
92.0
123.0
198.0
258.6
309.0
375.0
420.0
Annual Cost
($1000)
20.1
48.6
78.1
94.7
130.0
158.0
180.4
     Tons of air-dried pulp per day.
     Calculated from the Sirrine report (see Reference 41).
                                  IV-102

-------
 Table IV-38.  - ROTARY LIME RECOVERY KILN EMISSION CONTROL COSTS
Capacity
(tons /day)
100
150
200
250
300
350
400
450
500
550
600
650
700
Installed Cost
($1000)
14.0
17.3
20.0
22.5
25.0
26.5
28.0
29.7
32.0
34.6
37.8
40.9
44.0
Annual Cost
($1000)
8.8
12.0
15.0
17.7
20.5
23.4
26.5
29.2
31.4
34.3
37.6
41.2
45.2
Table IV-39. - KRAFT SMELT-DISSOLVING TANK EMISSION CONTROL COSTS
Tank Gas Volume
CLO3 acfm)
2.5
7.5
12.5
17.5
22.5
27.5
32.5
37.5
42.5
47.5
52.5
55.0
Associated Capacity
Vfe
(tons /day)
80
240
400
560
720
880
1040
1200
1360
1520
1680
1760
Investment Cost
($1000)
5.2
13.0
17.0
20.0
23.2
25.9
28.7
31.4
34.0
36.8
39.6
41.0
Annual Cost
($1000)
2.0
6.2
8.5
10.8
13.1
15.3
17.6
19.9
22.1
24.4
26.7
29.7
 Tons of air-dried pulp per day.
                                IV-103

-------
   100

    90

    80

    70

    60


    50



    40
o
o
o
to
o
B
ex
-H
3
a-
w
    30
    20
10

 9

 8

 7


 6
                                                       A = 316 ELC Stainless Steel

                                                       B = 304 Venturi/MS Concrete Lined

                                                           Separator

                                                       C = All Mild Steel
                                                                                  LLUJ
                           4    5  6  7 8  9 10            20


                              Inlet Gas Volume (10  acfm)
                                                                     30   40   50  60708090
          Source:  Poly Con  Corporation.


                         Fig.  IV-8.  Equipment Cost for Venturi Scrubbers.
                                               IV-104

-------
 1000


  800



  600





  400
  200
o
o
o
 « 100
 o
 d
 0)
 e
 P.
•H
 3
 CP
w
   80
60
   40
   20
                  A =  316 ELC  Stainless  Steel

                  .B =  304 Venturi/MS  Concrete Lined Separator
                  C =  All Mild Steel
                                    j    i   i  i
                 20
40
                                    60    80  100
200
400
600   800 1000
                                     Inlet Gas Volume  (10  acfm)
    Source:  Poly Con Corporation.


                     Fig.  IV-9.   Equipment Cost for Venturi Scrubbers.
                                             IV-105

-------
  1000


   800


   600

   500


   400


   300




   200
o
o
o
01
o
u

00
c
l-l
tlJ
a.
o
o
0)
i-i

•H
Q
Cd
d
c
100


 80


 60

 50

 40


 30



 20
 10
                                                                   PRESSURE  DROP
                                                                               40 inch
                                                                                  I   I  I  I III
               2     3   45678910
                                        20   30  40 5060 80 100
200  300400  600800
                                    Inlet Gas  Volume  (10  acfm)
           Source:  Poly Con Corporation.


                      Pig. IV-10.   Annual  Direct Operating Cost for Venturi  Scrubbers.
                                                   IV-106

-------
    10

    9

    8

    7


    6


   500



   400




   300
g  200
o
no
o
u

M  100
c

2  90

2  80
01

£  70
Oi


3  50
   40
   30
   20
   10
                                                                               SCRUBBER

                                                                               EFFICIENCY
                                                             99%
        1
J	I    I   I  i  I  I
     10
20      30   40   5060708090100
                                  2
             Inlet Gas Volume  (10  acfm)
                               200
300   400    600   800
   Source:  Poly Con Corporation.



      Fig. IV-11.   Annual  Direct Operating Cost for Recovery Boiler Venturi Scrubbers.
                                            IV-107

-------
 100
  90
  80
  70
  60

  50

  40

  30
o
o 20
 0)
 o
o
 00
-S  10
 QJ
 O.
o
 4-1
 U
 01
SCRUBBER
EFFICIENCY
                                                                                      99.5%
                   I
   U_L1J
     I             2       3     4   5   6  7 8  9 10            20      30    40  50  60 70809010

                                       Inlet Gas Volume  ( 10  acfm)
     Source:  Poly Con Corporation.

          Fig. IV-12.  Annual  Direct Operating Cost for Lime Kiln Venturi Scrubbers.
                                               IV-108

-------
    35
    30
    25
o
o
o
»   20
o
u
a
•H
3

-------
 0
a

-------
  Table  IV-40.  -  KRAFT BARK BOILER EMISSION CONTROL COSTS
Boiler Gas Volume
(10 acfm)
16
24
32
40
48
56
64
72
80
Associated Capacity
(tons /day) *
200
300
400
500
600
700
800
900
1000
Costs
($1000)
Investment
13.4
18.5
23.0
33.8
40.0
43.8
49.0
53.7
57.5
Annual
3.5
4.3
5.1
6.1
7.0
7.8
8.6
9.4
10.1
Tons of air-dried pulp per day.
   4.    Scope  and Limitations  of  Analysis
        Open market  sale  of kraf t pulp  constitutes  a very small part
   of  total production, making the open market  reaction to the cost of
   air pollution  control  a less than  ideal  indicator of industry impact.
   In  this case,  however,  it appears  that the market for kraft pulp
   is  in fact  a significant supplier  of the marginal resource inputs
   and, therefore, an integral part of  the  industry rather than an
   overflow market.   On this basis it is assumed  that  the pulp market
   reflects cost  changes  that  will affect the entire kraft paper industry.
        Analysis  of  the impact of control costs on  price and profit
   is  clouded  by  the presence  in the  industry of  many  firms that pro-
   duce nonpaper  products, including  lumber, metal  containers, and
   other diverse  products.
   5.    Structure of the  Industry
        Kraft  jmlping is  a segment of the ninth largest manufacturing
        industry  in  the United States — the pulp and  paper industry
        (Table IV-41).  Most pulp produced  by the kraft process (and the
        other  processes as well)  is made by integrated companies and con-
        sumed  by  them in  the production of  paper  and paper products.
        About  eight  percent of the kraft pulp is  marketed, resulting from
        independent  firms  without paper making  facilities and from
        integrated firms producing surplus  for  market.
                                IV-111

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           The availability of  raw materials,  level of labor costs, and
      nearness of markets  are prime determinants  of plant location.  The
      heaviest concentration of kraft  plants is in the Southeastern section
      of the United States. Twenty-four of the 71 Southeastern plants are
      not, however, in air quality control regions.
           Statistics concerning the kraft  (sulfate)  pulp industry are
      shown in Table IV-41.
Table iy-41. - 1967 STATISTICS  ON THE' KRAFT  CSTJIfFATE) PULP INDUSXKX
298
United Metropolitan
States Areas
Number of Plants
Number of Firms
Capacity (Millions


of Tons)
Production (Millions of Tons)
Value of Shipments
(Billions of Dollars)
116
72
32.1
23.9
3.6
81
51*
22.5
16.8
2.5
     Forty-three firms have all their plants in the 298 metropolitan
     areas, 8 firms have some, and 21 firms have none.
       6.   The Market
            a.   The Competitive Pattern
                 Production of kraft pulp in the United States is a direct
            function of the market for the paper and paper products pro-
            duced from it and it is this market, therefore, that is dis-
            cussed in this section.  A number of large firms operate in
            the kraft paper industry, but they do not have sufficient
            market power to dominate the industry.  There are a large
            number of buyers in the market, also, from a broad spectrum
            of industries providing a highly diversified and competitive
            market.  Prices tend to react freely-to relative changes in
            supply and demand.
                 A large share of kraft production goes into containers
            and packaging materials, including wrapping paper, bags, cor-
            rugated boxes, frozen food containers, milk cartons, and other
            food packaging.  The industry faces strong competition for
            these markets from makers of plastic, aluminum, and aluminum
            foil substitutes.  The kraft industry appears to be holding a
            fairly constant share of this growing market through continued

                                     IV-lli

-------
research and development of products  adapted  to  the  customers
needs.  Maintenance  of  its price position relative to  the
prices of substitutes is essential  if it  is to maintain  its
market share.
     Foreign competition is primarily in  the  form of imported
pulp, which amounts  to  just under 5 percent of U. S. production.
Canada supplies  approximately  90 percent  of imported pulp and
has been an important factor in the newsprint and printing
paper market.  Kraft pulp and  paper are exported from  the U. S.,
accounting for over  half the industry exports.
b.   Trends
     The dominant pattern in the industry is  the investment
price cycle.  Although  demand  has tended  to increase fairly
steadily, roughly proportional to population  growth with less
than the national average reflection  of the general business
cycle, investment in the paper industry tends to follow a five
year cycle.  At  the  beginning  of the  cycle the industry invests
heavily and competitively to meet actual  and  anticipated growth
in demand.  When new facilities come  into production,  the in-
dustry as a whole is faced with overcapacity.  Prices decline
as firms compete for markets,  profits  are depressed,  and in-
vestment is cut  back.   As demand catches  up to supply, prices
increase, profits improve, and new  investment is undertaken.
This pattern tends to keep profits  generally below the average
of manufacturing firms  in general.  The industry appears to
be in the rising price  phase of the cycle in  1970 and increased
investment may be expected in  1971  and 1972,  followed by potential
excess capacity.
     Another important  trend of recent years has been to more
highly integrated firms and inclusion  of  kraft paper firms in
conglomerates.   The  small percentage  of pulp  entering the open
market is a good indicator of  the extent  of vertical integration
that has occured.
     Paper firms have been diversifying,  also, using their
land and forest  resources to enter  the recreation, real estate,
and lumber markets.  Conversely, firms formerly  in the
lumber and plywood industries  have  diversified into paper
products as have firms  producing competing container products.

                         IV-113

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       7.    Economic Impact  of  Control  Costs
            a.    Cost for  Model Plants
                 In order  to illustrate the varying  impact of control,
            two  plant sizes  and the  associated  investment  and annualized
            cost are shown below.
                                           Total          Cost of
            Mill Size                     Annual      Control/ton
            (tons/day)     Investment         Cost        Produced IQ/
                145       $160,100         $ 61,420         $1.24
             1,000       $862,000         $381,550         $1.14
                These results assume venturi scrubbers were used to  con-
          trol  emissions  from  the recovery furnaces, lime  kilns, and  smelt-
          dissolving  tanks.  Redesigned multicyclones were assumed  to be
          used  to  control emissions from the bark boiler.   The 145  tons/
          day mill  size was assumed to have one recovery furnace, one
          lime kiln, one smelt-dissolving tank, and one bark boiler;
          the 1,000 tons/day mill size was assumed to have two of each
          of these units, with larger operating capacities.
               The  costs are not directly proportional to  the number of
          units of equipment to be controlled,  but vary according to
          size as well.  About 45 percent of  the United States plants
          approximate the 1,000 tons/day mill size and about  16 percent
          approximate the 140 ton/day mill size.   The costs range from
          $1.14 to $1.24 per ton of  sulfate pulp.   These costs are
          relatively low when compared  to the sales  price  of  market
          pulp,  which was  about $124 per ton  in 1968.
          b.   Impact on the Industry
               Depending primarily on mill size, location, degree of
          vertical and horizontal integration,  and financial  position,
          impact will vary across the industry.
               The most severe impact will be on the marginal nonintegrated
          firms that have all their plants in air quality  control regions.
—    Assuming production at 89. percent pf capacity.
                                    IV-114

-------
Most of the firms are vertically integrated and have some or
all of their plants  in  air quality  control regions.  These
facts, along with the increasing demand  for pulp and paper
exports, the upward  pressure  on pulp  and paper prices, and the
favorable  economic position of customer  industries, should
enable nearly  all industry firms to apply controls and pass
the  control  cost on  to  the customer.
                          IV-115

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J.   Lime
     1.    Introduction
           The basic processes in the production of  lime  are  quarrying
     limestone  (high calcium or dolomitic), preparing  the  limestone
     for kilns  (crushing and sizing), and  calcining the  stone.   The
     lime  may be processed further by additional crushing  and sizing
     and hydration.  In some cases, clam or oyster  shells  serve  as
     kiln  feed.  The products of lime manufacturing are  limestone,  quick-
     lime, and hydrated lime.  The product is further  classified as
     high-calcium or dolomitic depending on the percentage of magnesium
     carbonate present in the raw material.  High calcium  lime is pro-
     duced from stone containing at least  95 percent calcium carbonate,
     while dolomitic lime is produced from limestone containing  30-45
     percent of magnesium carbonate.  Most hydrated lime is  packaged
     in multi-wall paper bags with- very little bulk shipment, while
     the opposite condition prevails for quicklime.  Quicklime is
     commercially available in these forms:  lump,  pebble, ground,
     pulverized, and pelletized.  Quicklime is very reactive to water
     and carbon dioxide and is generally manufactured  as it  is needed,
     with  very little stockpiling.  One hundred pounds of  pure calcium
     carbonate limestone will calcine to 56 pounds  of  quicklime, which.
     when  completely reacted with 18 pounds of water will  result  in 74
     pounds of hydrated lime.  The leading uses of  open market lime are
     as steel flux, refractory lime, in construction,  and  in water
     softening and treatment.  Agricultural lime accounts  for approxi-
     mately 2 percent of sales.
           The majority of lime is produced in rotary kilns or shaft
     (vertical) kilns; both are fired by coal, oil, or gas.  Other  types
     of calcinators are in use, but the production  from them is  considered
     insignificant compared to the two named above.  It is estimated
     that  rotary kilns account for 80 percent of lime  produced, with the
     remaining production coming from vertical kilns.  Rotary kilns have
     the advantages of high production per manhour  and uniform quality
     production but require higher capital investment  and  have higher
     unit  fuel costs than most vertical kilns.  The open market  industry
                                  IV-116

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trend is toward installation of  larger  capacity  rotaries with a
far higher capacity than vertical kilns.
2.   Emissions and Costs of Control
     Particulate emissions in  the form  of  limestone and lime dust
are the main source of pollution from the  lime industry.  At almost
every step of the manufacturing  process, dust is emitted.  The
following processes are involved:  drilling holes in the quarry
for explosives, blasting, loading stone for transport, transporting
the stone (often over unimproved roads), crushing, pulverizing, and
vibrating for sizing.  At the  plant  site,  limestone is usually
moved between operations on open belt conveyors.  The lime kiln
is probably the major source of  particulate emissions at the plant
site; the estimates of emissions and control cost given here are
limited  to kilns,  since this is  the  source for which control is
available.  Estimates  for rotary kilns  place the dust emissions at 5
to  15 percent of the weight of the lime produced, while vertical
kiln emissions  are only about  1  percent of the weight of the lime
produced.  Combustion  of fuels for lime burning  is another source
of  lime  plant pollution.
     Particulate emissions from  plants  in  the 298 regions in 1967
are estimated to have been 181,000 tons, allowing for an average
control  level of 60 percent for  the  industry.  Predicted growth
of  the industry would  increase emissions to 253,000 tons by FY 1976
with the control level unchanged.  Installation  of cyclonic
scrubbers on vertical kilns and  venturi scrubbers on rotary kilns
can achieve 97  percent control of emissions, reducing the FY 1976
emissions to 20,300 tons of particulates.  For this sector of the
industry, the total annual cost  of control by FY 1976 is estimated
to be $14.5 million and the investment  requirement is estimated to
be $10.6 million.
3.   Engineering Basis of the  Analysis
     At  the lime plant, the kiln operation is the major source of
uncontrolled particulate emissions.  Rotary kilns have been found to
emit between 5  to  15 percent by  weight  of  the lime produced.  Vertical
kilns emit significantly less  dust,  amounting to only about 1 percent
of the lime produced.  In addition to the  emissions from kiln operations,
which represent a  major portion  of dust generated, there are emissions
                             IV-117

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 from  other operations.  Limestone quarrying  and  transportation cause
 localized emissions  for which efficient solutions  are not  available.
 Other than moderately effective dust suppression techniques  at the
 quarry site  and improvement of the road from the quarry  to the lime
 plant, little else can be done at present.   Limestone crushing and
 screening operations represent a potentially significant source of
 particulate  emissions.  Generally, however,  plants which have  well
 constructed  buildings with adequate dust ventilation systems enclosing
 the crushing and  screening operations may be considered  satisfactorily
 controlled.  This is the case with most modern plants.   In older plants
 which have poorly constructed buildings and  inadequate ventilation
 systems, the dust remains a problem only in  the  building and the
 immediate surrounding area.  Lime hydrating,  processing, and packaging
 are significant sources of noxious material;  however, the  use  of
 adequate dust ventilation and control systems is quite widespread in
 this  area of the  plant.
      Various types of lime kilns are presently used by the industry.
 Of these, rotary  and vertical kilns produce  the  major percentage of
 lime  and emit the major quantity of particulates.  If uncontrolled,
 rotary kilns emit approximately 200 pounds of particulates per  ton
 of lime produced  while vertical kilns emit about 20 pounds of partic-
 ulates per ton of lime [Ref. 45].  At .present, rotary kilns  are
 generally controlled with dry mechanical collectors resulting  in
 average reductions of about 80 percent.  Vertical kilns  in general
 are presently uncontrolled.  Control efficiencies were calculated to
 comply with  the process weight rate standard.  These are shown  in
 Table IV-42.
      Control systems to achieve required control limits were selected
 on the basis of incremental control required as well as on industry
 experience.  For rotary kilns, medium energy  (25" w.g.) venturi  scrubbers
were  assumed as the secondary collector.   For vertical kilns, cyclonic
wet scrubbers (6" w.g.)  were chosen as the basis for the control  cost
estimates.   To relate process size to control equipment capacity,  the
estimated gas volumes shown in Table IV-43 were used.
                                IV-118

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       Table IV-42. - ULTIMATE CONTROL EFFICIENCY REQUIRED
Capacity
(tons /day)
10
50
100
200
300
400
500
600
700
Control Efficiency Required
(percent)
Rotary Kiln
N/A*
N/A*
97.8
98.1
98.8
98.9
99.2
99.3
99.4
Vertical Kiln
52.4
78.6
79.8
83.8
*
*
*
*
*
      Not applicable.
              Table IV-43. - LIME KILN GAS VOLUMES
Kiln type
Rotary
Vertical
Unit Volume
(acfm/ton/hour)
5500
3200
     Adapted from data in A Study of the Lime Industry in the State
     of Missouri for the Air Conservation Commission of the State
     of Missouri.Reston, Virginia:Resources Research, Inc.,
     January 1968.


     Equipment cost -  process size relationships [Ref. 41J for the

control equipment selected are presented in Figures IV-15 through IV-19.

For both types of equipment, stainless steel was selected as the con-

struction material with an installed cost to equipment cost ratio of

two.
     The distribution of capacities according to manufacturer's reports

of rotary kilns and other data was used to calculate a weighted average
                              IV-119

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   100
    90

    80

    70

    60


    50


    40



    30
    20
o
o
o
 CO
 o
 CJ
 t
 •H
 D
 V
 w
10

 9
 8

 7

 6
                                                         =  316 ELC Stainless  Steel
                                                         =  304 Venturi/MS  Concrete Lined

                                                           Separator
                                                       C =  All Mild Steel
                                      5  6  7  8 9 10
                                                             20
30   40  50  60 70 80S
                                         Inlet Gas Volume  (10  acfm)
     Source:  Poly Con Corporation.


                         Fig. IV-15.  Equipment Cost for Venturi Scrubber.
                                               IV-120

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 1000



 800




 600
A = 316 ELC Stainless Steel

B = 304 Venturi/MS Concrete Lined Separator

C = All Mild Steel
 400
 200
o
o
o
olOOl
•H
3


w 60|
  80
  40
  20
                20
                    40      60    80  100
200
400     600   800 1000
                                      Inlet Gas Volume  (10J acfm)
         Source:  Poly Con Corporation.



                             Fig.  IV-16.  Equipment Cost for Venturi Scrubber.
                                                IV-121

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o
o
o
CO
o
 60
 c

      Source:  Poly Con Corporation.
                    Fig. IV-17.   Annual Direct Operating  Cost for Venturi Scrubbers.
                                              IV-12 2

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                                                A =  316  ELC  Stainless Steel
                                                B =  304  Stainless Steel
                                                C =  Mild Steel, Concrete Lined
                                                D =  Fiberglass
                     J	L
               3     4   5   6789 10
20      30   40   50 60 7080  100
                             Inlet Gas Volume   (10  acfm)


Source:  Poly Con Corporation.

                   Fig. IV-18.  Equipment Cost for Cyclonic Scrubbers.
                                          IV-123

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  100

  80

  60

  50

  40

  30


  20
o
o
o
 C
•H
•U
 0)
 t-l
 a)
 a,
o
•H
Q
10

8


6
c
<  0.8
   0.6

   0-5

   0.4

   0.3


   0.2
     I
                                                                                        JJJH
           2    3   4  5678910
20   30  405060  80 100      200  30040056785

           3
                                   Inlet Gas Volume   (10  acfm)


      Source:  Poly Con Corporation.


                      Fig. IV-19.  Annual Direct Operating Cost  for Cyclonic Scrubbers.
                                                IV-124

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cost of control per ton of capacity using  the  data  in Table  IV-44.
For rotary kilns, the weighted  average  installed  cost was  $73.30 per
ton of capacity per day, the weighted average  annual cost  was  $102.00
per ton of capacity per day.

    Table IV-44. - ROTARY LIME  KILN EMISSION CONTROL COSTS
Capacity
(tons/day)
100
150
200
250
300
350
400
450
500
550
600
650
700
Number of
Kilns
4
3
16
8
10
9
14
4
18
6
2
4
2
Installed Cost
($1000)
14.0
17.3
20.0
22.5
25.0
26.5
28.0
29.7
32.0
34.6
37.8
40.9
44.0
Annual Cost
($1000)
11.8
17.6
23.2
28.5
33.9
39.4
45.1
50.4
55.2
60.7
66.6
72.7
77.2
      Since data were not available on the capacity distribution for
 vertical  kilns, the rotary kiln capacities were used to  design a
 known distribution for vertical kilns.  The weighted average  cost of
 control per ton of capacity was then calculated using data  in Table IV-45.
      For  vertical kilns, the weighted average installed  cost  was $179.20
 per ton of capacity per day and the weighted average annual cost was
 $64.20 per ton of capacity per day.
      To get the overall average cost per ton of capacity, the two
 average costs  were combined using the known production ratio  of 80
 percent for rotary and 20 percent for vertical kilns. This cost
 was multiplied by estimated metropolitan area capacity to get the
 final control  costs for each area.
                                IV-125

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   Table IV-45. - VERTICAL LIME KILN EMISSION CONTROL COSTS
Capacity
(tons /day)
10
26
42
58
74
90
106
122
138
154
170
186
200
Number of
Kilns
4
3
16
8
10
9
14
4
18
6
2
4
2
Installed Cost
($1000)
5.8
7.2
9.0
11.1
13.9
17.0
20.2
22.1
23.7
24.9
26.1
27.1
28.0
Annual Cost
($1000)
2.0
2.8
3.1
3.9
4.9
6.2
7.3
8.0
8.5
9.0
9.3
9.7
10.0
4.   Scope and Limitations of Analysis
     The technical and cost analysis in this section deals with the
entire lime industry except plants captive to the paper industry.
The analysis of economic impact is focused on the firms in the open
market, since it is there that the economic effect is most clearly
defined.  The incidence of the incremental cost resulting from air
pollution control in captive plants depends upon the accounting
conventions and the ownership form followed between captive and
parent company.
     For the United States, 121 firms were identified as selling
lime in the open market.  From the data available it was not possible
to determine accurately how many of the plants included within the
298 metropolitan areas were captive, but it may be assumed that the
proportion of captive to open market is approximately the same for
the 298 areas as for the United States, i.e., 42 percent.  Data on
revenue and profit by firm or plant were not available.
                               IV-126

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    5.    Industry Structure
          Since 1963,  the United States Bureau of Mines has reported
    the number of active lime plants in the United States and Puerto
    Rico  which sold lime.  These can be considered the open market
    commercial plants.   In the United States and Puerto Rico in 1967,
    there were 121 active plants which sold lime.  There were 185
    captive and open market plants in the United States and 113 in the
    298 metropolitan areas.—  The number of plants has declined signifi-
    cantly since early in the century due to economic changes in the
    industry, but the decline has leveled off since the beginning of
    the 1960's, averaging about 124 plants from 1963 to 1968.  There
    may be further slight declines as small producers find it less and
    less  profitable to operate.  The opening of new, efficient plants
    probably will offset the closures and some existing plants will
     expand their capacity.
          There are no complete data on plant size for the open market
     producers.  Examination of available data, primarily Dun and
    Bradstreet reports and trade journal articles, indicates that
     plants range in size from 1-4 employees to over 200 employees,
    with many plants in the 30-70 employee range.  Capacity data for
     the open market producers are equally scarce.  Some of the larger
     producers have been covered in articles in the trade journals and
     several have reported capacities in the 100-1500 tons per day
     category.  The smallest plants are not reported in the literature
     but given an employment category of 1-4, it is almost certain that
     some plants operate with only a single, small capacity (5-20 tons
     per day) vertical kiln.
          It is reported that open market lime is produced in 33 of the
     50 states [Ref. 46].  In number of commercial plants, Ohio led
     the nation in 1967 with 15, followed in order by Pennsylvania with
     14,  Virginia and Texas each with 9, and California with 6.  Suffi-
     cient data are not available to rank the states by open market
     production for 1967, but reports the 1963 ranking as:  (1) Ohio,
     (2)  Missouri, (3) Pennsylvania, (4) Virginia, (5) Alabama and
     (6)  Texas.  The eastern half of the United States is the location
     for the majority of producers apparently because of the quality of
&  This does not include lime kilns captive to kraft  (sulfate) pulp plants.

                                     IV-127

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the lime deposits found there.   Open market producers are scattered
sparsely throughout the western half of the nation without concentra-
tion in any one area except for the California - Southern Nevada area.
     Many firms are multi-plant producers.  According to a National
Lime Association Map, one company had eight plants in operation in
1967 with some other firms operating from three to seven plants.
6.   Market
     a.   Competition Among Sellers
          The lime industry is reported to be intensely competitive.
     This condition may exist largely as a result of the threat of
     captive lime.  Lime producers are constantly faced with the
     possibility that the buyers of the product may begin producing
     lime themselves, and many have done so in recent years.  About
     60 percent of captive production is the inevitable result of
     the producers' need for an economical source of carbon dioxide
     and, in some cases, the lime itself; for example, the alkali
     industry and sugar refineries.  Also, much of the captive
     production is done by industries which normally would purchase
     lime from a commercial producer, e.g., steel producers and
     copper smelters.
          The competitive pressure is probably most severe in those
     areas with a number of producers supplying essentially a
     uniform grade of lime.  Additional competitive pressure may
     result from the desire of firms to attain the higher profit
     margins  usually  associated with producing nearer  optimum
     capacity.   Quicklime  is reactive  to  atmospheric moisture and
     should be  used quickly—within a  month or two—after manufacture.
     Since any  which  has been produced and not sold is, of  course,
     subject  to becoming waste, the firm  would face some pressure
     to  dispose of  it.
         There may be a few plants in the Midwest which experience
     little competition in this immediate marketing area due to
     the sparseness of producers, but  even these would face some
     competition on the outer fringes  of  their market.
                              IV-128

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b.   Economic Position  of  Customer Industries
     Use as steel  flux  is  the leading single market  for  lime
at present, with over a third of  open market lime  going  for
this one use.  With  the increased use of  the basic oxygen
furnace  (BOF) in the steel industry,  expectations  are  that
as much as 40 percent of open market  production may  go for
this use by 1975.
     Refractory lime (dead-burned dolomite) for the  open
hearth steel furnaces,  long the leading single  use for open
market lime, dropped from  first place in  the early 1960's
with the steel industry's  change over to  the basic oxygen
process.  The expectation  of the industry is that  refractory
lime will continue to decline in importance as  a market  for
the product as the switch  to the BOF  continues.
Taken as an industry, construction usages  are an important
market for lime, with particular  promise being held  for  the
use of lime in soil  stabilization in  highway, parking lot and
airport runway construction and in foundations  for large
buildings.  The pulp and paper market continues in importance
to the open market lime producers.  Increased usage is expected
in water treatment and  softening  and  in sewage and trade waste
treatment.  The calcium carbide and alkalie industries have been
declining markets  for lime and are expected to continue to
deline in importance.
     The economic  position of the lime consumers appears
sound in the immediate  future.  Optimistic projections prevail
for the steel industry, with estimates of  150 million net
tons of steel production by 1975.  This represents a growth in
steel production of  approximately 3.9 percent.  The pulp and
paper industry should also experience favorable economic con-
ditions with new and expanded product lines.
c.   'Foreign 'Competition'arid Markets
     United States imports of lime have been declining each
year since 1965 when a  decade high of 276 thousand tons  were
imported.  In recent years virtually  all  of the imported lime
has been from Canada.   The reason for the mid 1960's high import
tonnage may have been the  sudden demand produced by  the  steel

                              IV-129

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producers with the increased production of basic  oxygen
furnaces.  Domestic producers were not able  immediately to
meet all the demand with existing capacity and widespread
expansion in the lime industry can be seen following  1965.
As United States capacity began to reach adequate  levels to
supply the steel industry, the need to import lime was
reduced.  Foreign competition in lime should not be a problem
to the industry in the early 1970's since the increased capacity
of United States producers appears adequate to supply the
known markets.  The only chance of foreign gains would  be  in
the event of the opening of a sudden, wide market  for lime.
Some imports can be expected to continue since there  are
Canadian producers closer to certain United States markets
than any United States producer.  This is the case in the  far
Northeast, and generally along the United States Canadian
border.  Also, there are a number of Canadian producers in
Ontario who must be considered competitors in the Ohio-Michigan-
Pennsylvania marketing area.
     The export market for United States lime does not appear
significant.  The 1968 data indicate that exports that year
were 69,000 tons, about 1/2 percent of United States  open
market lime sold.  As might be expected, most exports go to
Mexico and Canada; the two countries combined receive 80-90
percent of United States export lime.
Trends
a.   Production
     The production of open market lime in the United States
and Puerto Rico increased from 8,190 thousand tons in 1960
to 12,100 thousand tons in 1968, an increase of about 48
percent.   This large increase in production was spurred by
several new and expanded uses of the product and follows a
decade of rather lacklustre performance by the industry.  In
1967,  open market production was 11,500 thousand tons, 40
percent above the 1960 level.   The remarkable growth of
the lime  industry in the 1960's was a result of increased use
of basic  oxygen furnaces in the steel industry, with the
                          IV-1301

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associated higher levels of  lime usage  per  ton  of  steel
produced.  The open hearth furnaces  require about  20 pounds
of lime for each ton of steel  produced, while the  basic oxygen
process needs about 150 pounds of  lime  for  each ton of steel
produced.  Increased usage of  lime was  also seen in soil stabi-
lization, sewage and water treatment, and water softening.
Optimism prevails in the industry  and open  market  production
is expected to continue to grow at a healthy pace  into the
seventies.
b.   Price
     Price data for open market lime are available in Bureau
of Mines Reports only  for 1963-68.   During  this period, the
national average f.o.b. plant  price  of  lime without containers
declined from $14.47 per ton to $13.71  per  ton,  a  drop of 5.3
percent.  Although not certain, this depression in the price
level may partially be the results of hard  bargaining by
steel firms for lower  prices.   This  trend did not  hold in
all  areas during the period, however.   In Texas, the f.o.b.
plant price of lime rose from  $10.94 per ton in 1963 to
$12.63 per ton in  1968, a 15 percent increase.   The available
data indicate that a declining price trend  existed in a number
of major producing states:   Michigan, Ohio,  Pennsylvania, and
California.  Continuation of depressed  prices is unlikely in
the  face of rising production  costs, however.   The average
f.o.b. plant price of  lime sold increased marginally between
1967 and 1968, from $13.68 per ton to $13.71 per ton.  The
price trend may turn up after  initial competition  for the
steel business.
     Another contributing factor to  lower prices in most
areas may have been that a number  of new efficient plants
went on line during this period, as well as new capacity at
established firms.  There is a definite trend toward larger
plants, and the economies acheived with the newer, higher
capacity kilns may have resulted in downward pressure on prices.
                         IV-131

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     c.    Technology
          Technological  advances  usually come  from outside the
     industry proper.  Sources  of advancement  are equipment manu-
     facturers,  industrial  users  of  lime,  and  fellowships supported
     by the National Lime Association.   In the last category there have
     been research fellowships  dealing with lime  use in soils
     stabilization,  asphalt paving,  masonry mortars, autoclaved
     concrete products,  steel fluxing, acid neutralization, trade-
     waste treatment,  and agricultural lining.  The National Lime
     Association was instrumental in the market development and
     promotion of lime as a soils stabilization agent.   This is
     now one of  the most promising markets for the product.
     Continued research  and development  by equipment manufacturers
     have led to higher  capacity  thermally efficient kilns, both
     vertical and rotary.  Industry  spokesmen  continue  to stress
     the need for increased research, development, and  marketing
     efforts by those in the industry, but without much effect.
     Even during relatively prosperous periods, the industry seems
     unwilling to invest in adequate research  to  insure continued
     vitality; the reluctance has been even more  pronounced in
     the past during less prosperous periods.   Low profit margins
     have been blamed as the reason  for  lack of research.
8.   Economic Impact of  Control Costs
     a'   Control Cost Factors
          The investment required and the  annual  cost of control
     equipment varies  according to the size and type of kiln.   In
     1967 a typical  vertical kiln of approximately 100  tons per day
     capacity would  require a cyclonic scrubber with an installed
     cost of approximately  $20,000 and the annual cost,  including
     depreciation,  finance  costs,  and operating expenses, would be
     approximately  $7,300 per year.   A typical rotary kiln will be
     somewhat larger,  with  a capacity of approximately  400 tons per
     day.   This  would  require a venturi  scrubber  with, an installed
     cost,  in 1967 prices,  of just under $30,000  and an annual cost
     of  approximately  $45,000.  Overall, for the  captive and open
     market plants in  the 298 metropolitan areas, average investment
                            IV-132

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is estimated at $67,000 per  plant  and  average annual  cost  at
$92,000 per plant in  1967.
b.   Model Firms, As  Examples
     Costs of controlling particulate  emissions  from  lime
kilns have been estimated for  five model  firms.  The jnodel
firms were constructed to illustrate the  costs to be  encountered
by firms with production solely  from vertical kilns,  solely
from rotary kilns,  and a combination of both  types of kilns,
with the firms spread over a wide  capacity  range.
     Model Firm #1  -  A very  small  single~plant lime firm with
     production entirely from  low  capacity  vertical kilns.
     Kilns:  4 vertical kilns  rated at 15 tons/day (TPD)
     capacity each.
     Plant capacity:  60 TPD.
     Annual costs of  control:  $2,500.
     Assuming the industry preferred operating rate of 92
     percent for FY 1976, and  300  producing days per year,
     production of  this plant  would be 16,550 tons of lime.
     Annual cost per  ton of  production =  $0.15.
     Model Firm #2  -  A medium-sized, single-plant firm with
     production entirely from  a  rotary kiln.
     Kiln:  1 rotary  kiln rated  at 200 TPD  capacity.
     Annual costs of  control:  $33,000.
     Annual production:  55,200  tons.
     Annual cost per  ton of  production:   $0.60.
     Model Firm #3  -  A medium-sized, single plant firm with
     capacity  comparable  to  Model  Firm #2,  but utilizing
     modern vertical  kilns.
     Kilns:   2 vertical kilns  rated at 100  TPD capacity each.
     Plant capacity:  200 TPD.
     Annual costs of  control:   $12,600.
     Annual production:   55,200  tons.
     Annual cost per  ton  of  production:   $0.23
                        IV-133

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     Model Firm 14 - A large, single-plant firm with produc-
     tion from both high capacity rotary kilns and modern
     vertical kilns.
     Kilns:  2 rotary kilns rated at 400 TPD capacity each.
             2 vertical kilns rated at 125 TPD capacity each.
     Plant capacity:  1,050 TPD.
     Annual costs of control:  $151,800.
     Annual production:  289,800 tons.
     Annual cost per ton of production:  $0.52.
     Model Firm #5 - A large, multi-plant firm with production
     primarily from high capacity rotary kilns.
     Kilns:  Plant #1:  1 rotary kiln rated at 300 TPD capacity.
             Plant #2:  1 rotary kiln rated at 350 TPD capacity.
                        1 rotary kiln rated at 500 TPD capacity.
                        2 rotary kilns rated at 250 TPD capacity
                        each.
             Plant #3:  6 vertical kilns rated at 50 TPD
                        capacity each.
                        1 rotary kiln rated at 400 TPD capacity.
     Firm capacity:  2,350 TPD.
     Annual costs of control:  $355,400.
     Annual production:  648,600 tons.
     Annual cost per ton of capacity = $0.55.
c.   Demand Elasticity and Cost  Shifting
     Based on available information, there seems little reason
to believe that costs of particulate emission control can be
passed on to buyers of lime.  The overall market for lime has
been increasing in recent years  and in most applications there
exists no suitable substitutes at anywhere near comparable
prices.  Lime has faced competition or replacement from the
products in a few markets, primarily agricultural and con-
struction users, however, and price increases would almost
certainly weaken lime's competitive position in these markets.
The exceptions to this may be in cases of isolated producers
who are not faced with competition in their immediate marketing
areas.  Competition in the industry is characterized as very
severe, and it seems unlikely that a producer will increase
                       IV-134

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his price  in the face of competition from other producers in
the marketing area who are not faced with control costs.  This
condition  of forced absorption of costs is most likely to
occur  in those areas with a large number of producers, many
of whom are not in the 298 metropolitan areas.
     Lime  is both a raw material input to manufacturing
processes  and a final product.  It is possible, then, that in
the  latter case, some reduced demand may result from a price
increase,  aside from the losses due to substitute availability.
     It is generally true that costs per ton of production
decrease as the operating ratio increases, and that economies
of scale usually insure that larger plants have lower unit
costs  than smaller plants.  It is estimated that for 1964,
the range  of manufacturing costs  for a short  ton of quicklime
is from a  minimum of $6.05 to a maximum of $16.25.   This would
imply  that the profitability range is also quite wide.
     Estimates reveal that the highest annual control  costs
per unit of production will be experienced by plants with
very small (less than 15 TPD capacity)  vertical kilns, but
that plants with larger vertical  kilns (15 TPD and  over) will
experience the lowest annual control costs per unit  of output.
Except  at  the very low end of the rotary capacity scale
(100-175 TPD), rotary kiln annual control  cost per  unit of
output  is  almost constant.
     In some marketing areas,  the existing competitive struc-
ture may no longer hold,  since some firms  will not  face
control at all and others may find their competitive positions
improved in relation to other controlled firms that experience
higher  unit control costs.   A firm may find its marketing area
expanded or contracted as a result of the  imposition of controls.
d.   Effect  on the Industry
     The imposition of  controls on particulate  emissions may
have a number  of short-and-long-range effects  on  the lime
indus try.
     One immediate effect  is  likely  to be  a reduction in
industry capacity  as very  small vertical kilns  facing high


                        IV-135

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control costs are abandoned.  The number of open market  firms
may be further reduced by the closure of marginally operating
plants of any size, which cannot absorb the costs of control
equipment.  To compensate for the loss of this capacity, pro-
duction will be increased from the larger kilns and the  industry
operating ratio will increase.  Firms which had been operating
close to capacity may launch an expansion program as a result
of lost capacity.
     A second effect of control may be a renewed interest
in the use of vertical kilns.  The lower relative costs
associated with controlling the large vertical kilns coupled
with their excellent thermal properties and lower investment
costs may make them more desirable in some applications.  It
may be that the trend toward high capacity rotary kilns will
be slowed somewhat.
     A third effect on the industry could be an increased
emphasis on applied research in an attempt to recoup the
costs of control by lowering other production costs.
     The open market lime industry may benefit somewhat by
the imposition of control costs.   Captive lime plants have
always been a problem to open market firms and each year
captive production has increased, representing 35-40 percent
of total lime produced.  The added production cost of emission
control may make captive production of lime less desirable for
those industries needing large amounts of lime - most notably
steel and pulp and paper.   More of those firms buying open
market lime may continue to do so than would have been the
case before the addition of control costs.  Further, a situa-
tion can be hypothesized in which a captive lime producer may,
when faced with control costs, choose to reduce or discontinue
entirely the manufacture of lime and begin purchasing from open
market producers.
     Control costs will add momentum to the current trend
toward larger plants.  Increased costs of labor, fuel and
equipment have made it more economical to operate on a large
scale, and the additional burden of controlling emissions
will make economies of scale even more important.
                        IV-136

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K.   Petroleum Refining and Storage
     1.   Introduction
          Three processes in petroleum refining  have been identified
     as sources of pollutant emissions.   These are storage of  crude oil
     or refined products, combustion  processes,  and catalyst regeneration.
     In addition, significant  emissions  are released by  certain bulk
     storage tanks where petroleum products are  stored for distribution.
     The analysis in  this section is  limited to  the nature, control,  and
     costs of these four sources.
     2.   Emissions and Costs  of  Control
          At a refinery, both  crude oil and refined products,  especially
     gasoline, tend to give off hydrocarbon emissions due to evaporation
     while being held in storage  tanks and in transfer.   In addition,
     significant hydrocarbon emissions result from the operation of
     catalytic crackers.  For  the 199 refineries identified as being
     within  the  298 metropolitan  areas in 1967,  it is estimated that
     these hydrocarbon emissions  amounted to approximately 810,000 tons
     in that year  taking into  account existing carbon monoxide boilers
     on catalytic  crackers  and assuming that 75  percent  of all refinery
     tanks were  controlled  by  floating conservation roofs and  submerged
     fill  lines.   If  this  level of control were  maintained, it is
     estimated that  industry growth would cause  emissions from this
     source  to increase  to  996,000 tons per year in Fiscal Year 1976.
      Installation  of  floating  roofs on all refinery tanks within the
      298 metropolitan areas and installing carbon monoxide boilers
     where needed  would  reduce Fiscal Year 1976  emissions to 529,000
     tons,  the maximum control effectiveness (87 percent) feasible
     with  present  technology.
           Sulfur oxide emissions from hydrogen sulfide  combustion
     operations  in refineries  are best controlled by use of sulfur
      recovery  plants.  The available data indicate that  67 of  the 199
     refineries  had  sulfur plants in 1967.  Thus, the 199 plants emitted
      1,750,000  tons  of sulfur oxides per year and it is  estimated that
      industry  growth would increase this to 2,150,000 tons by  Fiscal
     Year  1976 with  the  same 37 percent level of control.  Installation
                                   IV-137

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of sulfur plants on all refineries subject to regulation could
reduce the Fiscal Year 1976 emissions of sulfur oxides to 1,270,000
tons per year, which is a 62 percent level of control.  The remaining
sulfur oxide emissions result from operations involving the combustion
of natural gas and/or fuel oils for process purposes.  These are not
generally amenable to control.
     Regeneration of the catalysts used in fluid catalytic cracking
units results in emission of particulates and carbon monoxide.  Catalyst
fines are entrained in the off-gasses from the regenerator.  Some of
these are collected and returned by normal process equipment, but an
estimated 0.10 pounds of particulates per ton of catalyst processed
is emitted in the absence of air pollution control equipment.  Instal-
lation of electrostatic precipitators provides the maximum control now
available.  In 1967, the regenerators in the refineries in the metropol-
itan areas emitted an estimated 80,000 tons of particulates at an average
industry control level of 67 percent.  Normal growth of the industry would
increase this to 98,300 tons by Fiscal Year 1976.  Installation of pre-
cipitators in all plants would reduce Fiscal Year 1976 emissions to
30,700 tons-
     Carbon monoxide in the exit gas of regenerators was controlled by
use of a carbon monoxide boiler in 70 refineries in the 298 metropolitan
areas in 1967, but there was still an estimated 5,300,000 tons of carbon
monoxide emissions in that year (47 percent controlled).  The carbon
monoxide boiler burns the carbon monoxide into carbon dioxide and pro-
vides a substantial source of heat for process use, in addition to
controlling pollution.  Installed in all the subject refineries they
would control all but a negligible amount of carbon monoxide emissions.
Without this control, it is estimated that carbon monoxide emissions
would increase to 6,620,000 tons per year in FY 1976.
     Within the complex system for wholesale distribution of petroleum
products around the country, there are approximately 15,000 storage plants
located within the 298 metropolitan areas.  The storage tanks in these
plants are potential sources of hydrocarbon emissions if uncontrolled.
All storage tanks in California and approximately 75 percent of the
remainder in the United States were controlled by use of floating roofs.
                             IV-138

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Emissions from the uncontrolled  tanks  in metropolitan areas were
estimated at 600,000 tons  of hydrocarbons in 1967,  projected  to
grow to 738,000 tons per year by Fiscal  Year 1976.   Installation
of floating roofs on all uncontrolled  tanks  could reduce  the
Fiscal Year 1976 emissions to approximately  320,000 tons  per  year.
     By Fiscal Year 1976,  the investment  requirement  for  petroleum
refining will be $162.0 million  and  the  annual  cost will  be $7.1
million.  With these expenditures, emission  control levels can be
expected to be about 90 percent  for  particulates, 62  percent  for
sulfur oxides, 95 percent  for carbon monoxide and 87  percent  for
hydorcarbons.
     With the installation of floating roofs  that practically elimi-
nate evaporation, the annual cost of the  petroleum  storage industry
is considered negligible.   By fiscal Year 1976, the investment
requirement will be $1,082.0 million.  The associated hydrocarbon
emission control levels approximate  63 percent in 1967 and would
be about 86 percent in Fiscal Year 1976.
3.   Engineering Basis of  the Analysis
     a.   Petroleum Refining
          1)   Crude Oil and Gasoline Storage
               The total crude oil storage capacity for each  refinery
          was based on a 24.4-day refinery supply,  and gasoline
          storage capacity was based on  25 days production [Ref. 25].
          A model tank size of 80 thousand barrels was selected, and
          the total storage capacity in  each  region  (based on refinery
          capacities) was  divided by 80  thousand to determine the
          equivalent number of model tanks in the 298 metropolitan
          areas.  The fractional capacity remaining after accounting
          for all the model tanks was costed  as a separate item and
          added to the model plant costs.  Three-fourths  of these
          tanks were assumed already to have  floating roofs and sub-
          merged fill lines; therefore, no further  control was required.
          Since the cost for converting  to a  floating roof tank and
          installing submerged filling techniques was considerably
          less than installing a new tank, it was assumed that all
          tanks would be converted and not replaced.
                              IV-139

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                    Figure IV-20 presents the data used to determine tank
               conversion costs.  The tank size of 80 thousand barrels was
               chosen as the average based on talks with various knowledge-
               able people [Refs. 47 and 48]  and personal observation of
               refinery tank farms.   Operating and maintenance costs were
               not determined since  these are low and are usually equal
               to or less than the value of the recovered gasoline and
               crude oil.
                    Emissions of hydrocarbons result from refinery activities
               including crude oil storage, gasoline storage,  and gasoline
               transfer.  The emission factors and percent control attain-
               able with current technology is shown in Table  IV-46.
                                                           *
          Table IV-46. - PETROLEUM STORAGE EMISSION FACTORS
Receptacle
Tank
Tank Vehicle
Description and Controls
Fixed roof, w/vapor recovery
Fixed roof, w.o. vapor
recovery, splash fill
Fixed roof, w.o. vapor
recovery, submerge fill
Conservation, w/vapor
recovery
Conservation, w.o. vapor
recovery
w/vapor recovery
w.o. vapor recovery splash
fill
w.o. vapor recovery submerge
fill
Emissions
Breathing
Loss
Ctons/yr/
1000 bbls)
-0-
F = 8.5
a
F = 8.5
a
-0-
F, - 0.87
a
-0-
-0-
-0-
Working Loss
Ctons/1000 bbls)
-0-
F, = 0.242
D
F = 0.152
e
-0-
-0-
-0-
F - 0.172
c
Ff = 0.102
     All emission factors are from Ref.  14 except where emission factor
is listed as zero (-0-), such factor is  the result of independent engineering
analysis.
                                  IV-140

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     150
o
o
o
w
o
o


T3
0)
     100
M
d
50
                   50
                          100
150
200
                    Tank Capacity   (10  bbl.)
      Fig. IV-20.  Installed Cost of Floating Roofs on Petroleum

                   Storage Tanks.
                                IV-141

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In determining current emissions, the following assumptions
were made for each refinery:
     a)   Three-fourths of all crude oil storage tanks are
          controlled [Ref. 14].
     b)   Three-fourths of all gasoline storage tanks are
          controlled [Ref. 14].
     c)   One-half of all gasoline transfer operations are
          controlled [Ref. 14].
     d)   All gasoline produced is transferred to refinery
          storage tanks.
     e)   Thirteen percent of gasoline is transferred to
          bulk plants by pipeline.
     f)   All gasoline storage facilities are utilized to
          60 percent of capacity.
     g)   Gasoline production is 51 percent of crude oil
          input.
     h)   All storage facilities in California are fully
          controlled.
2)   Sulfur Recovery Plants
     Sulfur oxide emissions were controlled by installing
sulfur recovery plants at those refineries which did not
already have them.  The size of the sulfur recovery plants
was based on each refinery's capacity and on estimated
sulfur oxide emissions.
     Figure IV-21 presents sulfur recovery plant costs
based on information obtained from References 49,50, and
51.  Existing sulfur plant locations were also obtained
from these references.
     Since specific data on the composition of a refinery's
crude oil or its exact processing techniques were not avail-
able, a general sulfur dioxide emission factor of 50 tons
per 100 thousand barrels of crude oil throughput was used
[Ref. 52].  Variations in this emission factor were made
based on crude oil sulfur content.  Thus, in the Gulf Coast
and California areas, this factor was reduced by 6 percent;
on the East Coast it was increased by 42 percent; and it
                   IV-142

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     800
     700^—
     600 I—
     500 I—
o
o
o
ID
0
u
400 I—
    3001	
    200
       0
              20
  40        60        80        100

Plant Capacity   (tons sulfur per day)
                  Fig. IV-21.  Sulfur Recovery Plant Costs,



                             IV-143

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was not changed for the balance of the country.  Only  58
percent of this emission is amenable to recovery in a
sulfur plant [Ref. 53].  Since operation of sulfur plants
smaller than 4 tons per day is not economically feasible,
the smaller refineries (sulfur dioxide emissions less  than
13.8 tons per day) were not included in the cost estimates.
3)   Catalyst Regenerators
     To meet the particulate regulation, only fluid catalytic
cracking (FCC) units larger than 10 thousand barrels per day
required additional controls.  All smaller FCC units and all
Thermofor (TCC) and Houdriflow (HCC)  catalytic cracking units
can meet the regulations with existing controls.  In addition,
all FCC units requiring control were costed separately, and
the total metropolitan area cost was simply the sum of the
FCC control costs within that area.  Control costs were
based on using a high-efficiency electrostatic precipitator;
operating and maintenance costs were based on the size of
the unit; and a 20 percent capital plus depreciation charge
was used to derive the annual costs.
     For controlling carbon monoxide and hydrocarbon emissions,
the cost of a carbon monoxide (CO) boiler was estimated for
each FCC unit.  The HCC units located in the 298 areas
already have CO boilers, and TCC units with their lower
CO emissions are not generally amenable to control with
a CO boiler and were not included in the cost estimate.
Only 50 percent of the capital investment for these boilers
was charged as an air pollution control cost since steam is
generated in these units for inplant purposes [Ref. 54].
Annual charges were also not included as an air pollution
cost since they are a general plant cost.
     CO boiler costs were estimated according to the heat
content of the exit gas stream and the available boiler
cost data [Refs. 55 and 56].  Locations of existing CO
boilers, when known, were taken into account.  However,
on a nationwide basis, approximately 25 boilers could not
be located.


                    IV-144

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                     Sulfur dioxide  is  also emitted at concentrations in
                the 500-1000 ppm  range,  but these emissions  are currently
                not controlled  since it  is  clawed that no economical means
                exist for reducing this  emission.
                     Precipitator costs  were based on  the gas  flow  rate
                leaving the catalyst  regenerator.   Based on  limited data
                [Refs. 15, 55,  and 57],  the following  relationship  between
                barrels of total  feed and exit  gas rate was  determined:

                  f    2830 acfm
                     = 1000 bbl/day X feed  rate 
-------
o
o
o
    100
     80
CO
o
tfl
3
C
a
cd
4-1
O
     60
     40
     20
                                                   I
                                                I
                     200
                 250
                     300           350

                  Installed  Costs  ($1000)
                                      400
                 450
       20
40
60
80          100         120

       Total Feed   (1000 bbl/day)
140
160
180
200
                           Fig. IV-22.  Annual and  Installed Costs for Electrostatic Precipltators.

-------
     1,400
     1,200
o
o
o
4J
CO
0
u

•o
a)
H
H
td
4J
CO
c
1,000
     8,00
c
0)
o
>>
u

-------
          Uncontrolled emissions of CO from FCC units were
     based on 5.6 tons of CO per 1000 barrels total feed
     [Ref. 58].  Uncontrolled emissions from Thermofor units
     were based on 1.2 tons of CO per 1000 barrels total feed
     [Ref. 58].  There are no significant CO or hydrocarbon
     emissions from Houdriflow units since they are all
     presently controlled.  In all cases units were assumed
     to operate 360 days per year.  CO and hydrocarbon emissions
     from controlled units were assumed to be zero.
          Uncontrolled HC emissions from fluid units were based
     on 180 pounds HC per 1000 barrels total feed and those
     from Thermofor units were based on 57 pounds HC per 1000
     barrels total feed [Ref. 58].  These figures can be con-
     verted to 32.4 and 10.3 tons HC per year per 1000 barrels
     total daily feed, respectively.  In all cases, emissions
     from controlled units were assumed to be zero.
b.   Petroleum Products and Storage
     Costs for converting fixed-roof storage tanks to floating
roof tanks are shown in Figure IV-24.  Costs for submerged fill
techniques were not readily available; however,  these techniques
usually require only a modified nozzle on the hose used to fill
tank trucks, and a length of pipe attached to the inside of the
tank for submerged tank filling; the costs for such are minimal.
Complete gasoline emission loading systems utilizing vapor recovery
would, of course, cost much more.
     The factors used to determine emission from bulk gasoline
storage are presented in Table IV-46.
     Transfer losses were based on ten full turnovers in tank
contents per year, which was estimated by dividing total volume
of gasoline sold by total gasoline storage capacity.  To determine
total metropolitan area emissions, three-fourths of all tanks
were assumed to have floating roofs, and one-half of all transfer
operations used submerged fill techniques {Ref.  14].
     While the cost for converting a specific sized, fixed-roof
gasoline storage tank to a floating roof tank were fairly well
known, the distribution of tank sizes within any area was not
                         IV-14 8

-------
     20
o
o
o
      15
01
o
u

d
o
•H
CO
(-1
tt)
>
c
o
u
10
        0
              50
100
150
200
250
300
                                 Tank Capacity  (10  Gallons)
       Fig.  IV-24.   Cost for Converting Fixed-Roof Gasoline Storage Tanks

                    to Floating Roof Tanks.
                                 IV-149

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known.  A model tank approach was therefore used  to  estimate
tank  conversion costs for the various areas.  The model  tank
size  selected was 290 thousand gallons based on the  fact that
an average bulk gasoline storage facility has a capacity of
2.9 million gallons, assuming 10 turnovers per year.  This was
calculated using the present estimated national capacity of
8.8 billion gallons and approximately 30 thousand storage
facilities.  Seventy-five percent of all gasoline storage
tanks were assumed to be presently controlled except for
California which has 100 percent control.
     The cost for converting a model-sized tank with a capacity
of 290 thousand gallons from a fixed-roof to a floating  roof
unit was estimated to be $16 thousand as shown in Figure  IV-24.
Costs for smaller sized tanks were also taken from this  figure
and were used to estimate the costs for the remaining storage
capacity not accounted for by an even number of model tanks.
Thus, in any given area, the average capacity of each estab-
lishment was determined (total area capacity [Ref. 59] divided
by number of establishments {Ref. 59]); the equivalent number
of model tanks within each average establishment was then
obtained (average capacity divided by 290 thousand gallons)
and costed at $16 thousand each; the remaining capacity was then
costed as a separate item and added to the cost of the model
plants.  This total cost was then multiplied by one-fourth of
the number of establishments to arrive at the total area cost;
this takes into account the estimate that 75 percent are already
controlled.
     It was assumed that all plants would prefer converting
their uncontrolled tanks to floating roof units to the alterna^
tive of installing new tanks.  The cost for installing submerged
filling equipment was included in the cost of converting the
tank.
     Annualized costs were not included since the amount of
gasoline saved will usually more than cover the annualized
expenses incurred in converting the tank.
                       IV-150

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  4.   Scope and Limitations of Analysis
       Analysis of refinery emissions and control equipment was, in
  almost all cases, based on data for each refinery involved.  Control
  costs have been estimated on a less rigorous basis as indicated
  below, but are considered representative of actual cost expectations.
  Because the total annualized cost is not estimated to be large
  enough to influence prices, no analysis of market patterns is presented.
  5.   Industry Structure
       Nearly all bulk storage plants are owned by producers of
  petroleum products.  Although approximately 256 firms are listed
  as petroleum refiners, the bulk of the industry is concentrated in
  30 to 35 firms.  Of these, 16 are fully integrated international
  corporations making up the so-called "large majors" of the industry.
  Another eight firms may be classed as "small majors" and are also
  fully integrated.  The remainder of the firms in the industry are
  somewhat smaller and either not fully integrated or operate in a
  limited market.
       Petroleum is an oligopolistic industry characterized by sharp
  retail competition that usually concentrates on competitive adver-
  tising at the retail level, but experiences frequent  price wars  as
  well.  In its purchases of crude oil from independent producers,  it
  is much less likely to compete on price.
       The entire industry is subject to foreign competition, but  at
  present this is minimized through quotas  under the oil import
  program.  The effect of the quota system is to effectively set a
  base price higher than would probably be  set were  unlimited imports
  permitted.
       Statistics concerning the petroleum industry  will be found  in
  Tables IV-47 and IV-48.

Table IV-47.  - 1967 STATISTICS ON THE PETROLEUM REFINING INDUSTRY
United States
Number of Plants
Capacity (Millions of bbls.)
Production (Millions of bbls.)
Value of Shipments
(Billions of dollars)
256
4,210
3,580
20.29
Metropolitan Areas
199
3,620
2,720
15.41
                               IV-151

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Table IV-48. - 1967 STATISTICS ON THE PETROLEUM PRODUCTS AND STORAGE  INDUSTRY
                                            	            -
                                 _.-    —    ""     '
                                 United States     Metropolitan Areas

Number of Plants                    29,664               14,998
Capacity (Millions of bbls.)           182                  129
Production  (Throughput-              1,840                1,290
  Millions  of bbls.)                 1,840
Value of Shipments
   (Billions of dollars)             22.50
           Economic  Impact  of  Control  Costs
           a.    Cost Factors
                Floating  roofs for  refinery  tanks are estimated  to  require
           an investment  of approximately  $53,000 each, based on a  typical
           tank size assumed  to be  80,000  barrels capacity.  Since  this
           control reduces  vapor loss  by more  than  90 percent, it results
           in preventing  the  loss of a valuable product.  This saving more
           than offsets  the total annualized cost of control.  The  same  is
           true for  distributor's storage  tanks, except that the investment
           per tank  is calculated to be only $16,000 for a  typical  tank  of
           6,900 barrels  capacity.
                Sulfur recovery plants vary  in cost depending upon  size,
           which is  a function of the  daily  quantity and sulfur  content  of
           crude oil refined.   For  those refineries not listed as having
           sulfur recovery  plants in 1967, this cost was calculated on the
           basis of  plant size necessary for the listed capacity of the
           refinery  and  its estimated  sulfur oxide  emissions.  Sulfur recovery
           plants of four tons per  day capacity or  larger were considered
           economically  feasible, requiring  investment ranging from slightly
           over $100,000  for  four tons capacity to  approximately $630,000
           at 100 tons capacity. Annual cost  for sulfur recovery plants was
           estimated as  20  percent  of  investment after allowance for the
           value of  sulfur  produced.   The  market value of sulfur is, of  course,
           subject to change  if large  additional supplies are marketed.   However,
           since it  appears that the sulfur  recovery plants now  in  use  at
           petroleum refineries are operated at or  above the breakeven  point,
           it is assumed for  this analysis that  additional  plants could
           produce revenues at least equal to  annual  operating costs.

                                   IV-152

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     Electrostatic precipitators  for  control of particulate
emissions from catalyst regenerators  on  fluid  catalytic cracking
units vary in cost depending on size.  It is estimated that the
average refinery would invest  approximately $565,000 for each
precipitator.  The total  annualized cost per precipitator is
estimated to average $92,500.
     Carbon monoxide boilers to control  carbon monoxide and
hydrocarbon emissions from  catalyst regenerators were estimated
on the basis of the heat  content  of the gas stream for each
affected refinery and the price of boilers.  The average invest-
ment required would be approximately  $3 million per boiler, of
which 50 percent is charged to air pollution control, since the
steam generated may also  be considered a part of the normal
operating process of the  refinery.  Similarly, the annualized
cost may properly be considered to be production cost rather
than cost of pollution control.
b.   Aggregate Industry Costs
     For the petroleum industry as a whole, installation of
the controls specified in this analysis would require,  by the
end of Fiscal Year 1976,  a  total  investment of approximately
$1,242 million.  Given the  assumptions stated above, annual cost
to the industry would, however, amount to only an estimated
$7 million per year upon  completion of installation of  controls
in Fiscal Year 1976.
c.   Two Model Firms as Examples  of Economic Impact of  Control
     Costs
     Two hypothetical petroleum companies may be used to illus-
trate the impact of the investment requirements and annual costs
described above.
                             Model Firm A
     Description:  A fully  integrated national producer, operating
                   ten refineries, of which eight are within 298
                   metropolitan areas.  Total crude oil refining
                   capacity, 877,000 b/cd.   Gasoline production,
                   52.6 percent of crude oil.   Capacity utiliza-
                   tion,  88.6 percent.  Gross revenue,  1967,
                   $7,860 million.  Net income, 1967, $640 million.

                         IV-153

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     Air Pollution Control:
              Equipment            Number  Investment    Annual Cost
     At refinery:
        Carbon monoxide boiler         4   $ 6,000,000      	
        Sulfur plant                   5     1,310,000    $262,000
        Storage tank roofs            53     2,810,000
        Electrostatic precipitators    4     2,260,000     370,000
     At distribution points:
        Storage tank roofs         2,924   $46.800.000      	
                                           $59,180,000   $632,000

                            Model Firm B
     Description:   A small independent partially integrated firm,
                   operating one refinery located in a metropolitan
                   area.  Total crude oil refining capacity, 53,000
                   b/cd.  Gasoline production, 51 percent of crude oil
                   Capacity utilization, 85 percent.  Gross revenue
                   1967, $57 million.  Net income, 1967, $11 million.
     Air Pollution Control:
              Equipment            Number  Investment    Annual Cost
     At refinery:
        Carbon monoxide boiler         1   $1,500,000
        Sulfur plant                   1      140,000     $ 28,000
        Storage tank roofs            18      288,000       	
        Electrostatic precipitators    1      565,000       92,500
     At distribution points:
        Storage tank roofs           160   $2,560,000          _
                                           $5,053,000     $120,500

d.   Impact on the Industry
     If the total annualized cost of air pollution control for
the petroleum industry, as estimated here, were added to the
price of the estimated gasoline production in Fiscal Year 1976,
it would increase that price by approximately $0.0021 per
barrel ($7 million * 3,300 million barrels).  Costs of this
magnitude are not likely to have a visible effect upon the
final prices of petroleum products, nor are they large enough
to significantly reduce the profits of the 199 refiners
involved.  Much more significant is the magnitude of the
                       IV-154

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investment involved.  It appears that this industry will be
required to invest $1.2 billion by Fiscal Year 1976.  At the
same time, it appears that there will be a substantial excess
of demand for petroleum products and producers will be under
pressure to expand their exploration expenditures and increase
production capacity.  Some companies may find it difficult
to raise the capital essential to their total investment program.
                         IV-155

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Primary and Secondary Nonferrous Metallurgy
1.   Introduction
     This section deals with firms engaged in the production of four
nonferrous metals—aluminum, copper, lead, and zinc—by primary reduc-
tion from the ore and by secondary scrap processing.  These might be
considered as four separate industries except that many of the firms
produce more than one metal and the products are directly competitive
for many uses.  Until recently, the primary aluminum industry has been
almost entirely separate from the others, but the last few years have
seen the beginning of what appears to be a trend towards further
integration of the sectors of this industry group.
     Engineering, market, and cost data are discussed separately where
appropriate, and the economic impact of control costs on firms and the
industry analyzed within the interconnected economic framework of
the industry.
2.   Sources of Emissions
     The smelting and refining processes used in the primary production
of all four metals involve emissions of particulates, sulfur oxides, and
in the case of lead smelting, lead.  In addition, fluorides are emitted
by the electrolytic cells used to reduce alumina; control of this
pollutant to the specified standard results in control of the other
pollutants to levels exceeding the stipulated standards in primary alu-
minum production.  The melting of scrap and refining and alloying pro-
cesses employed by secondary producers are sources of particulate emis-
sions.  These result primarily from the various contaminants in the
scrap, such as paint, insulation, oil, and dirt.
3.   Emissions and Costs of Control
     a.   Primary Aluminum Emissions and Controls
          It is estimated that emissions from primary aluminum
     plants at a 90 percent level of control in 1967 were 6,000
     tons of particulates and 8,200 tons of fluoride, both gaseous
     and particulate.  At the same level of controls, there would
     be 8,000 tons of particulates and 12,200 tons of fl-uorides by
     Fiscal Year 1976.
          There are three types of electrolytic cells used in pro-
     ducing aluminum;  prebaked,  vertical spike soderberg, and
     horizontal spike soderberg.   It has been determined that the
     control technique utilized by the industry in 1967 was to vent
                              IV-156

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             individual cell  emissions to primary cyclones and simple wet

             scrubbers, yielding  overall control efficiencies of 90 per-

             cent for both particulates and fluorides.   To meet the appli-

             cable standards  (Appendix II) a combination of control systems

             utilizing more efficient  individual cell control systems plus

             new cell-room control systems was assumed.   Engineering analysis
             indicates that the most effective cell control equipment would
             be that shown in Table ry^A9 iRef.  61] .


                    TABLE IV-49.  - CELL CONTROL EQUIPMENT
  Cell Type
   Control Equipment
       Removal
     Efficiency
Prebaked
Vertical Spike
  Soderberg
Horizontal  Spike
  Soderberg
Fabric Filter-Precoated
  with Alumina
Electrostatic Precipitator
  + 2 Scrubbers in Series
Floating Bed Scrubbers
94 Percent; Gaseous F
>99 Percent; All
  Particulates

>99 Percent; Gaseous F
>99 Percent; All
  Particulates

95 Percent; Total F
99 Percent; All
  Particulates
                   Design of  the  new control  system assumed herein xasrald

             include new and more effective  hoods  for  each cell.  Approxi-

             mately 90 percent of the total  pollutant  emissions can be

             captured with improved hoods  and ducted to  the new control

             equipment specified.   It is assumed that  10 percent of the

             emissions will  still escape into the  cell room and be carried

             by the cell room ventilation  system to a  wet scrubber, where

             90 percent  removal  will be accomplished.  The overall efficiency

             of the combined system would  be 98 percent  removal of both

             particulates and fluorides, which meets applicable standards

             (Appendix II).  Resultant estimates of the  FY 1976 annual
             emissions for the aluminum industry with  these controls  in

             place are 1,700 tons of particulates  and  2,300 tons of fluorides.
                                    IV-157

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 b.    Primary Copper Emissions and Controls
      The 1967 level of control for sulfur oxide emissions from
 primary copper smelters is  estimated to have been 25 percent,
 resulting in release of an  estimated total of 2,140,000 tons
 of  sulfur oxides  for the 298  metropolitan areas.   By Fiscal
 Year 1976,  this would rise  to 2,380,000 tons if no further
 controls were applied.   Analysis  indicates that the addition
 of  an acid  plant  in smelters  not  now operating them, and the
 addition of lime  scrubbers  on the tail  gas from all acid
 plants,  would achieve the maximum removal of sulfur oxides
 from smelter gases  practical  with present technology.   This
 would reduce emissions  for  Fiscal Year  1976  to an  estimated
 227,000  tons for  the  copper smelters  in the  metropolitan
 areas subject to  control, equal to 94 percent  removal  efficiency.
 c.    Primary Lead Emissions and Controls
      Primary lead smelters  in the 298 metropolitan  areas were
 estimated to have emitted 200,000 tons  of sui'fur oxides  in 1967,
 representing control  of  32 percent of potential emissions.
 In  addition,  5,540  tons  of  lead was emitted with a  level of
 control  of  96 percent.   Estimated growth  of production would
 increase sulfur oxide emissions to 269,500 tons and lead
 emissions to 7,900  tons  by  Fiscal Year  1976 without  further
 controls.   Addition of acid plants at refineries not now having
 them and at  new refineries  could  reduce the  Fiscal  Year 1976
 emissions to  17,200 tons of sulfur oxides and  7,900  tons of
 lead,  equal  to  96 percent control.
 <*•    Primary Zinc
      The pattern for primary  zinc smelters is  similar to that
 of lead.  As a result of high level controls effective in
 smelters using acid plants in 1967, it is estimated that 51
percent of the potential sulfur oxide emissions were controlled.
The remaining smelters emitted an estimated 416,000 tons of
sulfur oxides and this would increase to 508,000 tons by
Fiscal Year 1976 if the same level of control were maintained.
If all lead smelters in the  metropolitan areas treated their
                      IV-158

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smelter gases in acid plants,  sulfur  oxide  emissions  in Fiscal
Year 1976 would be  76,700 tons,  a  93  percent  level of control.
Further reduction of these emissions  would  be prohibitively
expensive.
e.   Secondary Nonferrous Emissions and  Controls
     Secondary producers of  aluminum,  copper, lead, and zinc
in the 298 metropolitan areas  are  estimated to have emitted
9,800 tons of particulates and 14,500 tons  of lead in 1967,
with approximately  half the  plants controlled effectively at
95 percent, the average control  for the  industry therefore
being about 48 percent.  At  this same control level,  emissions
would grow to 14,800 tons of particulates and 22,000  tons of
lead by Fiscal Year 1976.  High  energy wet  scrubbers,  elec-
trostatic precipitators, and fabric filters were used, where
appropriate, in this industry  analysis,  with  all three methods
achieving 95 percent or better control.  Installation  of
equivalent procedures in the uncontrolled plants would reduce
emissions to 2,900  tons of particulates  and 2,200 tons of
lead in Fiscal Year 1976.
f.   Control Costs
     Implementation of the control plans discussed above would
result in a total investment requirement of $393.1 million;
primary aluminum, copper, lead,  and zinc requirements would
be 223.3, 87.0, 16.2, and 4.7  million dollars, respectively,
and secondary nonferrous would be  $61.9  million.  Annual costs
in Fiscal Year 1976 would be as  follows:  primary aluminum,
$75.8 million; primary copper, $42.0  million; primary  lead,
$7.1 million; primary zinc,  $2.2 million; and secondary non-
ferrous, $21.8 million—a total  annual cost of $148.9 million.
Engineering Basis of  the Analysis
a.   Primary Nonferrous
     1)   Primary Aluminum
          The costs of  controlling the emissions from the three
     types of aluminum  reduction cells are  shown in Tables IV-50
     through IV-52. Table IV-50 presents the costs of the equip-
     ment designed  to control  the  cell emissions from prebaked
     and horizontal spike soderberg cells.  Table IV-51 presents
     the costs of the scrubbers  designed to control the cell  room
                       IV-159

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 TABLE IV-50.  -
COSTS OF CELL CONTROL SYSTEMS - PREBAKED AND
HORIZONTAL SPIKE SODERBERG
Plant Capacity
(103 tons Al/Year)
50
100
150
200
250
Prebaked Cells
Installed
($10 b)
1.3
2.8
3.6
5.0
6.0
Annual
C$io b)
0.4
0.6
0.9
1.2
1.6
Horizontal
Spike Soderberg
Installed
($10 b)
2.0
3.9
5.8
7.5
9.6
Annual
($10 b)
0.7
1.3
2.0
2.5
3.4
TABLE IV-51.  - COSTS OF CELL ROOM CONTROL EQUIPMENT - PREBAKED
                 AND HORIZONTAL SPIKE SODERBERG
Plant Capacity
(103 tons Al/Year)
50
100
150
200
250
Prebaked and Horizontal Spike Soderberg
Installed
($10b)
2.5
4.9
6.4
9.6
12.4
Annual
($10 b)
1.0
1.9
2.9
3.6
4.7
                          IV-160

-------
       emissions from these two cell types.  Table IV-52 presents
       the combined costs of cell plus cell room control systems
       for vertical spike soderberg aluminum reduction cells
       [Ref. 28].
            Emissions for aluminum reduction cells were based upon
       the uncontrolled emission rates shown in Table IV-5.3.
    TABLE IV-52.  - COSTS OF COMBINED CELL PLUS CELL ROOM
         CONTROL  SYSTEMS - VERTICAL' SPIKE SODERBERG
Plant Capacity
(103 tons Al/Year)
50
100
150
200
250
Vertical Spike Soderberg
Installed
($106)
3.9
7.7
11.5
15.2
19.3
Annual
($io6)
1.3
2.5
3.8
4.8
6.3
   Table IV-53. - UNCONTROLLED EMISSION RATES FOR ALUMINUM
                        REDUCTION CELLS

Cell Type
Prebaked
Horizontal Spike Soderberg
Vertical Spike Soderberg
Total Particulates
(Ibs/ton Al)
55
140
80
Total Fluorides
(Ibs/ton Al)
80
80
80
Source:  M. J. McGraw.  Draft Report, "Air Pollutant Emission
Factors."  NAPCA, August 1970.
                            IV-161

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           2)   Primary Copper. Lead, and Zinc
                Obtaining and analyzing air pollution control costs for
           these primary metal industries was limited to the primary
           smelting processes only.  The refining steps were not con-
           sidered a problem from the point of view of particulate or
           S02 emissions fRef. 60J.  In addition, particulate emissions
           resulting from primary smelting operations are consistently
           controlled to levels in excess of 95 percent.  Therefore, the
           resulting cost analysis focused on the control of S0_ from
           primary smelting operations.  The primary metallurgical
           processes analyzed in the smelting operations for each metal
           are shown in Table IV-54.

TABLE IV-54. - METALLURGICAL PROCESSES FOR COPPER, LEAD, AND ZINC
   Metal
       Primary Smelting Processe
                                                       si/
   Copper
   Lead
   Zinc
                         or
Roaster-reverberatory furnace - converter
                  or
Reverberatory furnace-converter
Sintering - blast furnace-
Roaster—
  or
Roaster -  sintering^'
—    The analysis was limited to these process systems because they
represent the systems present in the study areas.   There are other
possible configurations for each metal.
21
—    S0~ emissions negligible,
3/
—    Followed by a usually well controlled electrolytic reduction step.
                Based upon data developed in the McKee report  [Ref. 61],
           a model plant approach was adopted as the basis of  the cost
           analyses.  The model plants are presented in Table  IV-55.
                               IV-162

-------
               TABLE IV-55.  - PRIMARY SMELTING - MODEL PLANTS
Metal
Copper



Lead
Zinc


Processes
Roaster & Converter
Converter Only
Reverberatory Furnace
Gas Stream to Lime
Scrubbing Plant
Sinter Machine
Roaster
Roaster & Sinter
Machine
Model Plants
Gas Volume
(1,000 scfm)
9()i/
13 O2-/
55^or 180^
145^/or 21(£/
50
50

20-
S02 Concentration
(percent by volume)
5. 5i/
4>02/
O.l-'or 1.5-/
0.4-^r l.O^/
5.0
8

8-
—    Representative when smelting operation includes roaster,  reverberatory
furnace and converter.
21
—    Representative when smelting operation includes only reverberatory
furnace and converter.
3/
—    It appears  that when smelting process includes roasting and sintering
the off-gas from the sintering operation contains less than 1,000 ppm;  hence,
only the off-gas from the roasting operation was considered.
                    The use of these models requires further explanation.
               Information was obtained on the presence or absence of  acid
               conversion facilities at each plant location in the study
               areas {Ref. 62],  Therefore, the cost estimating methodology,
               which is fully discussed in the next section, was based upon
               the addition of acid conversion plants where none now exist
               plus wet lime scrubbing systems, where reasonable, to reduce
                                  IV-16 3

-------
          S0» concentration to economically feasible limits;  the  500
          ppm standard cannot be reasonably met.
               Copper smelting plants within the study areas  use  either
          reverberatory furnace-converter smelting systems or roaster-
          reverberatory furnace-converter systems.  With the  first
          process, only converter off-gases are amenable to acid  plant
          conversion of SCL—  and the resulting combined gas stream
          from the reverberatory furnace and acid plant tail-gas must
          be further treated in a wet lime scrubber.  In the  second
          copper smelting configuration, combined roaster and converter
          off-gases are sent to an acid conversion plant and  the  combined
          tail-gas and reverberatory furnace off-gas stream must  then be
          sent to the secondary scrubber.
               In lead smelting operations, only sinter machine off-gases
          must be treated in an acid plant.  The blast furnace operations
          which take place in series with the sintering step emit negli-
          gible S0».  It is not considered reasonable to further  treat
          the acid plant tail-gas.—
               In zinc smelting operations, only the roasting process
          results in serious S0_ emissions.  The off-gases should be
          treated in an acid conversion plant to obtain effective control.
          Again, it is not considered reasonable to further treat the
          acid plant tail-gas.
               Costs for copper, lead, and zinc smelters were based on
          the costs for building and operating acid conversion plants
          in locations where there were none and for building and
          operating wet lime scrubbing systems where applicable.
          Capital and operating cost relationships for these facilities
          were obtained from the McKee report [Ref. 61] and are pre-
          sented in Figures IV-25 to IV-29.
               Sulfur oxide emissions were based upon the emission
          factors shown in Table IV-56.
147
—   The criterion is 3 percent or greater S02 concentration (see Table IV-55).

—   The resultant SO- concentration should be less than 0.1 percent.
                                    IV-164

-------
 c
 o
 •H
 •H
 s
 en
 o
 o
 ex
 CO
 u

 T3
 0)
 •u
 cfl
 S
                                      100
200  300
               Total Sulfur Equivalent  in Feed Gas

                       (short tons per day)

          Percent sulfur dioxide in feed gas.

  Source:   Systems Study for Control of Emissions in the Primary

           Nonferrous Smelting Industry.  San Francisco, California:
           Arthur G. McKee and Company, June 1969.


Ftg. IV-Z5. Capital Costs for the Contact Sulfuric Acid Process.
                         IV-165

-------
    3000
o
o
o
CO
o
o
a
•H
(-1
0)
ex
o
CO

c
13
01
4-1
td
6
•H
4-1
CO
w
    2000
     1500
1000

 900

 800

 700

 600


 500



 400
      300
                        I    I   I  I
                                        T	T
         10
             20    30 40
70   100
200   300
                 Total Sulfur Equivalent  in Feed  Gas
                        (short tons per day)

        *
          Percent sulfur dioxide  in feed  gas.
        Source:   SystemsStudy for  Control  of Emissions in the
                 Primary Nonferrous Smelting Industry.  San
                 Francisco,  California:   Arthur G. McKee and
                 Company,  June 1969.
      Fig.  IV-26 •   Annual Operating  Costs  for  Contact  Sulfuric
                   Acid Process.
                      IV-166

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                                Scrubbing and
                                Waste Treatm
       50    70    100          200    300      500   700   1000

          Sulfur Equivalent in Off-gas (short tons per day)

 Source:  Systems Study for Control of Emissions  in the Primary
          Nonferrous Smelting Industry.  San Francisco, California:
          Arthur G. McKee and Company, June 1969.
Fig. IV-27.   Equipment Costs for Lime Wet-Scrubbing Process,
                            IV-167

-------
   CO
   cfl
   f 100

   M-l '
   M-l
   o
CO
o
u

00
c
-H

-------
   Cfl
   cfl
   oo
  i I
   14-1
   
20



 15





 IQ
                                      1% SOx
                            9% SOx
            50  70     100         200     300      500   700    1000


            Sulfur Equivalent in Off-gas (short tons per day)



          Source:  Systems Study  for Control  of Emissions in the Primary

                   Nonferrous Smelting  Industry.  San Francisco, California:

                   Arthur G. McKee and  Company, June 1969.
    Fig. IV-29.  Operating Costs - Scrubbing and Waste-Treating Section

                 of Lime Wet-Scrubbing Process at 100% of Capacity.
                                      IV-169

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     TABLE IV-56. - SULFUR OXIDE EMISSION RATES
Metal
Copper
Lead
Zinc
Emission Rate
(Ibs/ton Charge)
1250
660
530
Source: " M. J. Mcgraw.   A Draft Report,  "Air Pollutant
Emission Factors."  NAPCA, August 1970.
 b.    Secondary  Nonferrous
      The processes  of  the  secondary nonferrous metals industry
 considered  in this  analysis were copper, brass, and bronze
 melting,  secondary  aluminum melting, secondary zinc melting, and
 lead  refining.   Data obtained from a number of sources were used
 to  identify secondary  nonferrous metallurgical plants in  the 298
 metropolitan areas.  Secondary aluminum plant locations were
 obtained [Ref.  63], and secondary zinc plants were identified
 [Ref.  64].   Data from  Reference 64, supplemented with information
 from  the Bureau of  Mines [Ref. 25], were used to compile  lists
 of  secondary copper and lead plants in the areas.  The emissions
 from  the  secondary  nonferrous metals industry are particulates
 in  the  form of  dust, fume, and smoke [Ref. 15].  Uncontrolled
 emission rates  for  these processes are shown in Table IV-57.
     According  to a recent survey [Ref. 65], 51 percent of all
metal plants  control pollutants; this percentage was assumed
 for the secondary nonferrous metals industry.  Plants con-
 trolling were further  assumed to control at 95 percent
efficiency since the equipment normally used to control emissions
in this industry includes high energy wet scrubbers,  electro-
static precipitators,  and fabric filters iRef.  66J .   The
resulting average industry level of control was 48.5 percent.
     The following data were not used in this analysis,  nor were
they readily available:  process size,  gas volume,  gas stream
temperature, annual hours of operation, and detailed information

                            IV-170

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     TABLE IV-57.  - UNCONTROLLED EMISSION RATES FROM SECONDARY
                   NONFERROUS  METALS INDUSTRY
            Metal
     Emission Rate
(Ib/ton metal produced)
Aluminum
Copper, Brass, Bronze
Lead
Zinc
           7.5
            40
           110
            15
Source:  Reference  14.

     on control systems.  Fortunately, the approach taken in esti-
     mating the cost of emission controls in this industry did not
     require such data since costs per ton of production were
     available from a recent survey performed by the Department of
     Commerce [Ref. 66].  Because process size data could not be
     obtained, it was not possible to determine the efficiency needed
     to comply with the process weight rate standard.  Accordingly,
     no assumptions as to specific types of control equipment were
     made, except that current practices which achieve efficiencies
     of approximately 95 percent will be continued.
          Plant capacities for copper, lead, and zinc were estimated
     indirectly.  Production data, for the "Nation were obtained
     [Refs. 25 and 67] and peak monthly output was assumed to approxi-
     mate capacity.  Because of the lack of additional information,
     the assumed capacity was apportioned to each area according to
     the number of plants in each.  The average plant size for each
     metal was estimated by dividing national capacity by the number
     of plants in the Nation.
          Cost data were abstracted from a publication of the Depart-
     ment of Commerce [Ref. 66], which included investment and annual
     costs per pound of production.  Investment costs were given by

                              IV-171

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          type of metal, and annual operating costs were given as an
          average for all types of metals.  Depreciation and capital
          charges were added to the annual operating cost to obtain
          total annual costs for each area.  Unit costs are shown in
          Table IV-58.
            TABLE  IV-58.  -  EMISSION CONTROL COSTS FOR SECONDARY
                              NONFERROUS METALLURGY
Metals


Brass,
bronze, &
copper
Aluminum
Zinc
Lead
Average Plant
Size
(tons/yr)



7,349
4,082
268
1,418
Investment Cost
($)

Eer Ib/yr
capacity


0.0095
0.0101
0.0097
0.0051


Eer plant


139,631
82,456
5,199
14,464
Annual Operating Cost
($)

Per Ib/yr
capacity


0.0012
0.0012
0.0012
0.0012


Per plant


17,638
9,797
643
2,413
     Annual Operating Cost as reported does  not include depreciation and
capital-related expenses.
 Source:  Reference 66.
        5.    Scope  and  Limitations of Analysis
             The  engineering and control cost data summarized elsewhere
        in  this report  give a firm basis for estimating the costs of control
        for individual  firms and the total industry.  Adequate financial
        data on which to base the discussion of the impact of these costs
        on  firms  and the markets are also available.  However, because
                                    IV-172

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relatively few firms are  involved, hypothetical model  firms have
not been used to illustrate  cost  impact.   To  avoid  the impression
of specifying costs for actual  individual  firms,  a  procedure which
may involve factors not considered in  this  study, such as  the over-
all financing program of  the firm and  the  intricacies  of its tax
position, the impact is discussed in relation to  general trends and
patterns which may be expected  within  the  industry  and the markets
involved.
 6.   Industry Structure
     The primary nonferrous  metals industries are highly concen-
trated, with three or four firms  producing  more than half  of the
annual production of each metal.  There were  only eight primary
aluminum, 11 primary copper, six  primary lead, and  seven primary
zinc firms identified in  the United States  in 1967.  The companies
are large, stable, and in most  years very  profitable.   Their
market power is limited to some extent by  vigorous  foreign compe-
tition and, for some firms at least, by substantial competition
from independent fabricators of finished industrial products and
consumer goods.  A large  share  of the  market  for  these metals is
also found among the giant manufacturing firms, such as the
automobile companies, whose  buying strength offsets any monopo-
listic power among producer  firms.
     The secondary nonferrous industry, on the other hand, is
composed of a large number of firms, over  half of them with fewer
than 20 employees.  It is estimated that perhaps  as many as 10
percent of secondary nonferrous firms  are  operated  very close to
 the breakeven level.  The presence of  large numbers of marginal
and near-marginal firms weakens the market strength of the industry.
Pricing and production, therefore, are closely related to  trends
in the primary nonferrous metals  industry.
     Tables IV-59 and XV-60  provide statistical data for these
 industries.
                                IV-173

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            TABLE IV-59.- 1967 STATISTICS FOR PRIMARY
                 NONFERROUS METALLURGICAL SOURCES
Aluminum


Number of Plants
Capacity (Millions
of Tons)

Production (Millions
of Tons)
Value of Shipments
(Billions of
Dollars)

U. S.
~24

3.5


3.3


1.6
298
Areas
14

2.0


1.9


0.9
Lead


Number of Plants
Capacity (Millions
of Tons of Ore Con-
centrate
Production (Millions
of Tons)
Value of Shipments
(Billions of
Dollars)

U. S.
6


1.7

0.4


0.1
298
Areas
4


1.2

0.2


0.1
Copper


Number of Plants
Capacity (Millions
of Tons of Ore Con-
centrate)
Production (Millions
of Tons)
Value of Shipments
(Billions of
Dollars)


U. S.
19

9.3


1.2


1.1

298
Areas
10

6.5


0.9


0.8
Zinc
[ ^

Number of Plants
Capacity (Millions
of Tons)

Production (Millions
of Tons)
Value of Shipments
(Billions of
Dollars)

U. S.
15

1.3


0.9


0.3
298
Areas
9
*
0.6

*
0.4

*
0.2
 At this  time,  data are not available on two plants.

       TABLE IV-60.-  1967 STATISTICS FOR SECONDARY NONFERROUS
                        METALLURGICAL SOURCES




Number of
Plants
Capacity
(Millions
of Tons)
Production
(Millions
of Tons)
Value of
Shipments
(Billions
of Dollars)
UNITED STATES
Muminum



170

0.90

0.82


0.39
Copper Brass
and
Bronze

117

0.50 0.52

0.40 0.48


0.46 ; 0.56
Lead



442

0.63

0.55


0.16
Zinc



159-

0.08

0.07


0.03
TOTAL
U. S.



627*

2.63

2.32


1.60
298
Areas


*
583

1.93

1.71


1.17
A number of plants produce more than one metal
                                 IV-174

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Market
a.   Aluminum
     Market growth  for  aluminum has  resulted from the devel-
opment of new  aluminum-using products and intensive competition
to replace other metals in traditional uses.   However,
aluminum faces strong competition from various plastics  in
some uses.  A  major factor in the sales growth of aluminum has
been its ability to deliver a fully  satisfactory  substitute
for copper or  steel at  a significant cost reduction.
     Within the industry,  prices tend to be  very  similar from
firm to firm,  since four firms in the United States  and  Canada
control approximately 65 percent of  the world's output and
there is only  a total of eight firms in the  United  States.
     The relationship of aluminum sales to growth in the auto-
mobile and construction industries is discussed in Chapter 5
of this volume. Also important are  the electrical  products,
consumer durables,  and  container markets.  In each  of these
industries, aluminum has significant advantages in  cost  and
technical factors for certain uses,  but seldom holds  sufficient
advantage to forestall  effective competition from other
materials.  Therefore,  despite its concentration,  the industry
faces a highly competitive market with substantial price
sensitivity.
     Exports account for approximately six percent  of sales of
aluminum and this market is not expected to  grow  in  the  next
five years.  Aluminum ingots are imported, but not  in signi-
ficantly large quantities.   The tariff of one cent per pound
on primary aluminum and two cents per pound  on fabricated
shapes appears to provide  significant protection  to  the
United States  industry.
b.   Copper
     The market for United States copper production  is very
sensitive to the world's supply and  demand for copper and
to military use in  the  war in Vietnam.  World capacity has
                         IV-175

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been rising faster than world demand and it appears  that
this trend may continue, although conditions determining
actual supply in any year are sufficiently unpredictable
to make long range market forecasts very dependable.  The
effect of the industry nationalization in Zambia, completed
in August,cannot be analyzed at this time, for instance.
Although private management is under contract to operate
Zambia's copper industry, the extent of government pressure
for changed policies remains to be determined.
     The other market unknown - copper demand resulting from
military procurement - is estimated to decline substantially
by Fiscal Year 1976.  Thus, both of the factors mentioned
indicate that oversupply, or at least overcapacity, may tend
to affect the market over the next five years.
     A very large part of copper production goes into copper
wire, which is used in transmission of electricity and in
electrical equipment of many kinds.   In parts of these markets,
copper faces sharp competition from aluminum, which also has
excellent electrical properties.  Substitution of aluminum
wire for copper wire depends primarily on price,  although
aluminum may have an important weight advantage,  partially
offset in some uses by its greater bulk.
     The copper used in automobiles, mostly for wiring and
radiators, may decline.  There is talk of reducing the use
of copper wire so that when scrapped auto bodies are melted
down the resultant scrap metal will not contain copper,  which
is difficult to remove.  New aluminum technology seems to
have overcome the difficulties in manufacturing aluminum
radiators and copper may lose a part of this market as well.
     The prospect, therefore, seems to be one of possible
oversupply of copper and stiffer competition, which may be
adjusted by changes in the relative prices of copper and
aluminum.   If pollution control costs ultimately prove to be
significantly different for these two metals,  there may be
further changes in the market relationship.
                         IV-176

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c.   Lead
     Six firms are engaged  in primary  smelting of lead in
the United States; four plants are  in  the metropolitan areas.
These firms also operate refineries and produce refined
lead in addition to selling lead bullion to a small number
of refiners who do not mine and smelt  their own supplies.
Smelting is the most concentrated segment of the industry.
The industry is more competitive than  this number might seem
to indicate, however, since smelters and refiners must deal
with a larger number of mining firms and distribute semi-
finished and finished products in competition with a much
larger number of firms processing refined lead.  Another
competitive force is foreign sellers who operate extensively
in the United States market.  Lead prices appear to be very
flexible, reacting quickly  to changes  in supply or demand.
Supply is relatively inelastic relative to price due to the
very heavy investment required in mining, smelting, and
refining.
     For these integrated lead producers, smelting is only
one part of the productive  process, contributing only a frac-
tion of their total profit.
d.   Zinc
     Of the seven firms engaged in  zinc smelting in the
United States in 1967, six  are also engaged in production of
one or more of the other nonferrous metals covered in this
analysis.  The combination  of lead  and zinc is especially to
be expected since the two metals frequently occur in the same
ore.  Unlike lead, zinc smelting is carried out through a
wide variety of processing  combinations and as a result
production costs are more variable.  Much of what has been
said about the competitiveness of lead production applies to
zinc as well, however.  The industry is characterized by
competitive pricing, moderate profit on investment, and
relatively inelastic domestic supply.
                          IV-177

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8.   Production and Price Trends
     It is estimated that primary production of aluminum,  copper,
and zinc in the United States will increase at the following  annual
rates through Fiscal Year 1976;  aluminum, 5.8 percent; copper,  1.3
percent; and zinc, 2.6 percent.  This implies some increase in
utilization of productive capacities, since the annual growth rates
in capacity through Fiscal Year 1976 are estimated as:  aluminum,
4.4 percent; copper, 0.2 percent; and zinc, 1.4 percent.   The
estimated rate of growth in both capacity and production of primary
lead plants between 1967 and 1976 is 4.1 percent.  This growth
rate for the primary lead industry reflects the actual growth for
the years 1967 to 1970 and assumes that they will approach zero
after 1970 as the market for tetraethyl lead gasoline additives
declines sharply.
     Secondary producers of nonferrous metals, whose production
rates depend in part on the supply of scrap and therefore on the
consumption of primary production, are expected to increase pro-
duction at a rate of 6.1 percent per year through Fiscal Year 1976,
while increasing capacity at 6.6 percent per year.
     The relative changes  in the prices of metals explain in part
the expected relative growth patterns.  The rise of the index of
copper prices from 110 in 1965 to 146 in 1968, compared to the
index for aluminum prices which stood at 97 in 1965 and rose only
to 102 in 1968, indicates the increased price advantage gained
for aluminum over those years.
     Aluminum prices should be firm through Fiscal Year 1976 as
demand continues to grow, with increased growth in the container
field being especially important.  Even without aluminum's dis-
advantage of a higher control cost, copper probably will continue
to lose ground to aluminum in the electrical field and in some other
industries, for example automobile radiators.   Most brass and bronze
markets will probably change little.   It is unlikely, therefore, that
copper prices would continue the upward trend of the last few years.
     Prices of lead and zinc may be expected to remain fairly steady
through Fiscal Year 1976.  Uses of lead alloys have been growing
in a wide variety of applications, but lead for batteries has grown


                                IV-178

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more slowly  than  automobile production.   This reflects increased
battery life,  although most of the improved technology in this
field appears  to  have  been introduced and the trends of automobile
and battery  production may move more closely for some years.
Elimination  of tetraethyl lead in gasoline, however, would elimi-
nate one-third or more of the United States lead market.   If  this
occurs, lead prices  may  decline sharply  and a sizeable segment
of the secondary  lead  industry particularly may feel the impact.
    The zinc market  prospects are for slow steady growth and
stable prices.
9.   Economic  Impact of  Control Costs
     a.    Control System Costs
           1)   Aluminum
                Annual  control costs for  the primary aluminum
           industry differ depending upon the production process
           with average costs as follows:  (a) prebaked, $25,32/
           ton ($0.013/lb. of capacity);  (b) horizontal spike  soder-
           berg, $31.31/ton ($0.016/lb. of capacity); (c)  vertical
           spike soderberg, $21.14/ton ($0.011/lb. of capacity).
           The average  prebaked process plant in the areas designated
           for control  for purposes of this study had a capacity  of
           just over 150,000 tons per year in 1967.  The annual cost
           in 1967 dollars for such a plant would be approximately
           $4,000,000,  reflecting the annualized cost of an investment
           of $13,000,000 plus the annual operating and maintenance
           cost.  A similar plant using the horizontal spike soderberg
           process would require a total investment in control equip-
           ment of 1.2  times that for prebaked and would have  total
           annual costs 1.2 times as great.  Such a plant using the
           vertical spike soderberg process, on the other hand, would
           require only three-fourths of the investment outlay and  four-
           fifths of the annual cost of the prebaked process plant.
           An adequate level of control would be achieved in all three
           plants.
                                IV-179

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     The annual costs given above make no allowance for
the recovery of materials through the control systems.
Since these systems have not yet been widely employed,
calculation of the value of recovered products is purely
hypothetical at this time.  It appears, however, that
for the prebaked and, possibly, the vertical spike soderberg
processes, substantial amounts of alumina and cryolite could
be recovered in usable form.  A conservative estimate of
the value of recovered product might be $1,000,000 worth
per 100,000 tons of production for the prebaked process
and approximately half that for the vertical spike
soderberg process.  No significant recovery of materials
appears possible with the floating bed scrubber indicated
for the horizontal spike soderberg process.   If recoveries
of this magnitude prove feasible, the result would be
that plants using prebaked cells would reduce total
operating costs by adopting air pollution control.
Plants using vertical spike soderberg cells  would incur
little or no net cost for control and plants using
horizontal spike soderberg cells would be at a disadvan-
tage amounting to approximately one-half cent per pound
of aluminum produced.  Since it appears that the vertical
spike soderberg process may be the most efficient,  by a
small margin, of the three processes, such a cost differ-
ential could significantly affect profits for firms
dependent on the horizontal spike soderberg  process.
Such a firm may have to absorb the added cost since its
competitors would have no motivation to raise prices  as
a result of pollution control requirements.
     Producers of secondary aluminum, in turn, face the
probability of annual control costs equal to $0.0032
per pound, or $82,500 per year for a typical plant of
just over 4,000 tons annual capacity installing the anti-
cipated controls, as noted in Section 4.e.  Firms
                      IV-180

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operating secondary aluminum production plants  sell in
competition with primary producers  in many markets and it
is unlikely that the price  of  secondary aluminum  could
rise against an unchanged price  for the primary metal.
It appears that some secondary producers, now operating
at a smaller scale and higher  costs than the average in-
dicated, may be forced out  of  aluminum by merger, shift
to other metals, or by going out of business.   More de-
tailed data would be necessary to estimate how  many firms
may be affected in this way.
2)   Copper, Lead, and Zinc
     Air pollution control  costs for lead and zinc
smelters have been calculated  as the cost of installing
and operating a sulfuric acid  plant in which the sulfur
oxide emissions are captured and turned into a  saleable
by-product.  In addition to adding  a sulfuric acid
plant, copper smelters have also been assumed to require
a wet line scrubber system  which does not yield a
saleable by-product.  Industry sources indicate that at
present  (1970) four of the  19  copper smelters in the
United States operate acid  plants,  as do two of the six
lead smelters and nine of the  15 zinc smelters.  That
these plants are generally  operating acid plants in
locations where they are not subject to sulfur  oxide
emission limitations which  would make strict control
mandatory is conclusive evidence that recovery  and sale
of  sulfuric acid is economically advantageous for them.
     For a copper smelting  plant, it is estimated that
maximum feasible control of sulfur  oxide emissions will
require the installation of a  contact acid plant plus a
lime scrubber.  This would  require  an investment of
approximately $12,300,000 for  the-typical plant and total
annual cost, including depreciation and interest, of
$4,500,000.  Assuming that  the acid plant can produce up
to 180,000 tons of sulfuric acid and that this  can be
sold at a price of $14 per  ton,  f.o.b. the smelter (a price
                       IV-181

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in line with the current market), by-product revenue
would approximate $2,500,000 per year.  Net annual
control cost would then be approximately $1,650,000
for this plant, or $23.57 per ton ($0.012/lb.) for
70,000 tons capacity.
     For a copper smelting plant with an acid plant
already in operation, maximum control would require the
addition of a secondary scrubber.   It is estimated that
this would require an investment of $2,300,000 and
total annual cost of $1,370,000, with no additional
production of saleable by-products.   For a 500,000 ton
capacity plant, this would mean an estimated annual cost
of $19.57 per ton ($0.0098/lb.).
     Those lead and zinc smelting plants already
operating acid plants would not require further control
of emissions.  Since they are presumably operating at
or above breakeven in their acid production, there is
therefore no net cost of control.   Construction of a
new acid plant at the smelters not now controlling
sulfur oxide emissions would involve investment of
approximately $5,500,000 and total annual cost of
$2,500,000 for an average sized zinc plant of approxi-
mately 100,000 tons annual capacity.  Sale of acid at
$14 per ton would yield revenue approximately equal to
annual cost, indicating zero net control cost.
    The assumption has been made in estimating these
net control costs for copper, lead,  and zinc smelters
that the sulfuric acid produced would find a market at
$14 per ton.  Recently published studies [Refs. 61 and
68] of the potential market for smelter acid indicate
that this assumption is almost certainly not valid.
The volume of smelter acid involved and its location
relative to its potential market make it improbable that
more than a small fraction of the potential supply could
be sold at any price in Fiscal Year 1976.
                       IV-182

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     The market for sulfuric acid is primarily for use
in production of fertilizer with smaller amounts used
for leaching copper ore and for processing uranium.  It
should also be noted that sulfuric acid is required
in the electrolytic dissolution process for refining
zinc, explaining why so many zinc plants produce sulfuric
acid.  The studies cited above indicated that less than
40 percent of the potential new acid production of
smelters located west of the Mississippi could find a
market at a price of $4 per ton, the minimum estimated
production cost.  The problems and cost of shipping
acid to more distant markets would be prohibitive, it
was indicated.  It may be concluded, therefore, that
primary smelters will install acid plants only to the
extent that projected revenues from the sale of acid
result in a njet control cost less than that of alterna-
tive control systems.  Assuming that the annual cost of
lime scrubbing alone, without an accompanying acid
plant, is approximately half the gross annual cost of
the system specified in this analysis, annual cost for
an average copper smelter might be approximately
$3,250,000 and for a lead or zinc smelter $1,250,000
($0.003/lb. for copper; $0.0063/lb. for zinc; $0.0018/lb.
for lead).
     Air pollution control costs as of 1967 for secondary
copper, lead, and zinc producers have been estimated by the
Department of Commerce  [Ref. 69].  The cost estimate for a
typical secondary copper  (and brass and bronze) producer
with an annual capacity of 7,340 tons was that an in-
vestment of $140,000 would be required and that total
annual cost would be $54,400 or $7.41 per ton ($0.0037/
Ib.) of capacity.  Equivalent figures for a secondary
lead producer with 1,420 tons capacity were investment
of $14,500 and annual cost of $5,300 or $3.74 per ton
($0.0019/lb.).  For a secondary zinc plant of 268 tons
capacity, the required investment was calculated as
$5,200 and annual cost as $1,700 or $6.27 per ton ($0.0031/lb.),

                      IV-183

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          The added costs indicated by this analysis  for  some
     primary producers of copper, lead, and zinc,  and the
     increased costs for secondary producers suggest  that
     some upward pressure on prices may occur.  However,
     foreign competition, competition from plants  not  subject
     to control regulations, and those already meeting
     emission standards, plus the realistic possibility of
     excess capacity by Fiscal Year 1976, make it  probable
     that little if any price increase will eventuate as  a
     result of these cost pressures.
b.   Impact on the Industry
     The impact of net cost on any one primary producer is
more difficult to determine than the aggregate annual costs.
The impact depends upon the product mix,  degree of horizontal
and vertical integration, the amount of metal purchased from
other producers, the percentage of their  plants subject to
control regulations, the control cost for the specific pro-
duction processes used, the productivity  of the processes,
the firm's market and financial strength,  and many other
factors.  No analysis of the impact on actual firms is given
in this report.  Any attempt to do so would imply much more
detailed knowledge of the variables involved than would
generally be available to an outside observer.   This section
is intended to suggest the range of possible effects which
may be felt by some firms and the industry as a whole.
     For primary producers of aluminum,  it appears that the
industry will be required to invest approximately $223.3 million
in the years between calendar year 1967 and Fiscal Year 1976.
By Fiscal Year 1976, the industry will be incurring total
annual" costs for control of approximately $75.8 million in
addition to an estimated $7.0 million now being spent annually
for control instituted before 1967.   It is probable, however,
that much of this cost may be offset by the recovery of
valuable materials.  Only the firms operating horizontal
spike soderberg cells appear to face significant net control

                           IV-184

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costs.  The aggregate estimated annual  control  cost  for  this
sector of the industry will be approximately  $26.2 million  in
1976.  It may be expected, therefore, that  use  of this production
process will tend to decline  in the  long  run  unless  new  technology
can offset its economic disadvantage.   Some shifting into
alternative product lines or  change  in  individual market
shares may occur, but the primary aluminum  industry  is not
expected to show any fundamental change in  response  to new
control costs, nor is the market price  likely to increase.
     The impact of control costs on  primary producers of
copper, lead, and zinc depends primarily  on the amounts
of these  (and other) metals they are smelting,  since it is
the smelting process for these three metals that will require
new or additional emission controls.  How many  of a  company's
plants are already partially  or completely  controlled and
how many are located in metropolitan areas  where additional
controls will be required will also  affect  the  impact on a
particular company.  The other prime determinant of  the cost
for a firm will be the marketability of sulfuruc acid from
its existing or newly required acid  plants  as more smelter
acid enters the market.
      Among them,  the 23 firms smelting  copper,  lead, and zinc
may  invest an  estimated  $107,9 million  by Fiscal Year 1976  in
additional control equipment. The annualized cost of control
by  that year is estimated at  $51.3 million.  Offsets to  this
annual cost reflecting the value of  the sulfuric acid produced
could be  as high  as  $31 million, leaving  a  net  estimated control
cost  of approximately  $20 million, almost entirely the cost of
secondary scrubbing  in copper smelters.  If the value of acid
output is assumed to be only  half that  used in  these estimates
and if world and domestic productive capacity remain reasonably
in balance with demand, some  upward  pressure  on price may occur.
Adjustments per pound  to this pressure  by Fiscal Year 1976 would
probably not exceed $.012 for copper, $0.001  for lead, and  $0.003
for zinc.  Price variations of this  magnitude would  not be  enough
to cause any significant shifts in market shares or  production.


                        IV-185

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     Secondary nonferrous producers face a more difficult
situation.  Overall, by Fiscal Year 1976, they may be required
to invest a total of approximately $61.9 million and by that
year annual costs for control for these firms are estimated to
total approximately $21.8 million.  These producers will have no
saleable by-product with which to offset these costs.  If the
assumption is correct that the price of the secondary output
cannot change significantly relative to the primary price
when there are adequate supplies available in the primary
market, it is probable that some marginal secondary producers
will be unable to continue without change.   This impact would
be most severe on firms handling copper scrap and much less
for lead and zinc firms.  Some firms may drop out of the
copper market and concentrate on handling larger volumes of
other metals.  Considering the expanding market for secondary
metals, some very small firms may merge to  gain economies  of
larger scale operations.  This latter course is probably in
line with a trend toward fewer and larger firms in the
industry anyway, to which air pollution control costs will
provide greater impetus.
                           IV-186

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M,   Rubber (Tires)
     1*   Introduction
          The industrial classification considered in this section
     includes the manufacture of tires and tubes of all types for
     all kinds of vehicles, the bulk of which are for automobiles,
     trucks, and buses.  Tubes are included because no distinction
     is made between tires and tubes in statistical data.
     2.   Emissions and Costs of Control
          Air pollution emissions come from only two tire manufac-
     turing processes, i.e. the tire cord dipping operation, and the
     mixer which blends carbon black into the tread material.
          Hydrocarbon emissions have been reported in the offgases
     from the tire and dipping process.  The amounts of these emissions
     have not been determined although they are believed to be in such
     quantities as to require control.  Controls are predicated upon
     industry practice and experience under the regulations of the
     State of California.  It is reported that a direct gas-fired after-
     burner provides fully adequate control of these hydrocarbon
     emissions.  These have been assumed to be required in all plants
     outside of California.
          Approximately 80 percent of the tire plants reported use
     fabric filters to control emissions of carbon black particulates
     at a control level of better than 99 percent.  Carbon black is
     a costly material and the plants controlling these emissions do
     so because the value of the material recovered more than offsets
     the annual cost of control.  For the 20 percent of the industry -
     which was not controlling particulate emissions in 1967, it is
     estimated that 1,230 tons of particulates per year were emitted.
     Predicted growth of the industry would increase this amount to
     an estimated 1,670 tons per year in Fiscal Year 1976.  Installation
     of fabric filters in these plants would reduce the estimated
     Fiscal Year 1976 emissions to negligible amounts of particulates
     by Fiscal Year 1976.
          Installation of these controls would require an investment of
     $1.92 million and a Fiscal Year 1976 annual cost of $1.35 million
     for the plants located in the 298 metropolitan areas.
                                   IV-187

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 3.   Engineering Basis of the Analysis
     At  the present time, insufficient data  are  available  to
 estimate hydrocarbon emissions from tire and tube production and
 only limited data are available for particulate  emissions.   However,
 cost estimates  can be based on industry practice which is  to
 control  the carbon black with fabric filters  to  prevent  the  loss
 of  this  valuable material.  These devices will enable tire and
 tube producers  to meet the process weight rate regulation.   After-
 burners  will readily meet the assumed standard of 90-percent hydro-
 carbon emission control.
     In  1968 there were 53 tire manufacturing plants in metropolitan
 areas  1-298 with an average capacity of 20,000 units per day (UPD).—
 It  is  estimated that a 20,000 UPD plant emits 114 tons of carbon
 black  per year  [Refs. 70 and 71] (uncontrolled).  Estimates  of parti-
 culate emissions were based on the assumptions that:
     1)   All California plants control both hydrocarbon and
          carbon black emissions.
     2)   No plants outside California control hydrocarbon emissions.
     3)   80 percent of plants outside California control carbon
          black emissions.
     4)   Control efficiencies are 100 percent for hydrocarbon and
          99 percent for carbon black.
     Table IV-61 lists the controlled and uncontrolled plants based
 on  the above assumptions.

TABLE IV-6^.  -  STATUS  OF  EMISSION CONTROLS FOR RUBBER PLANTS
Contaminant
Hydrocarbon

Carbon Black

Control Status
Controlled
Uncontrolled
Controlled
Uncontrolled
Areas 1-298
-0-
*
52
43
9
Calif.
6
_o-
6
-0-
      Includes the California plants.
     Average excludes plants which manufacture off-the-road tires
only.  (<100 UPD capacity)  However, due to great size of these tires,
such plants are considered as average (20,000 UPD) plants for this study.

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      It was estimated that the average cord dipping operation
 requires a 15,000 scfm exhaust system.  For direct gas-fired systems
 with no heat exchange, installed cost for a 15,000 scfm system
 equals $25 thousand ± 25 percent [Ref. 72] for the average plant.
      The following equation and calculations were used in
 determining annual costs [Ref. 73]:
           G = SI195.5 x 10~6 PHK + HF + M];
 where:
           S = 15,000 acfm;
           P = 1" water;
           H = 2,000 hours/year (50 weeks,  40 hours/week of
               afterburner operation);
           K = $0.011/kwh;
           F = $0.00056/acfm/hr.;
           M = $0.06/acfm;
 thus,
           G - 1.204S or:
             Capital charges plus  depreciation  at 20 percent.
             Total annual  cost:   $18,100/yr
                                   5.000
                                 $23,100
      Installed cost of Orion bags with a continuous air jet cleaning
 system and a capacity of  about  20,000 scfm  is  estimated to be $20
 thousand [Ref.  73],  Recovery  of  carbon black  is  sufficient to
 cover the annualized costs  of  the system.   The average plant requires
 a  system rated at approximately 20,000 scfm.
 4,    Scope and  Limitations  of Analysis
      The data necessary for detailed  analysis  of  emissions and
 control  costs were  not available for  this analysis.  Industry
 experience has  been used, however, to estimate the control systems
 appropriate to  the  air pollution problems associated with.the
 production of tires  and tubes.  The magnitude of  the costs involved
 appears,  even after  allowance for substantial possible error, not
 to be large enough  relative to  the size of the industry and its
member firms  to warrant more extensive analysis at this time.
Therefore,  the  discussion is limited  to the estimated cost of

                                IV-189

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 control.   Since  this cost is relatively small and  is not  expected
 to  affect  price  or profit significantly, no analysis of the
 industry's market has been made.
 5.    Structure of the Industry
      The rubber  tire and the tube industry consists of 60 plants
 that  are located in the United States and represents 16 firms.
 Fifty-four of the 60 plants, or 90 percent, are located within the
 298 metropolitan areas—representative of 15 firms.  United States
 capacity for the industry was 1,080,000 tires and  tubes per day.
 In  the  298 areas, capacity amounted to 1,000,000 units per day—
 93  percent of the United States total.  Production was 213 million
 units per  year for the United States and 196 million units per
 year  for the 298 metropolitan areas or 92 percent of United States
 production.  Three major firms accounted for 59 percent of United
 States  capacity, with all but one of their plants within the
 designated control regions.
 6.    Economic Impact of Control Costs
      Control costs were estimated, as of 1967, for a model plant
 representative of the industry.  This plant was described as
 employing  350 persons and producing 825 thousand tires and 206 thou-
 sand  tubes per year.  Although many plants do not produce tubes or
 have  a  different product mix than this, it appears that costs for the
 model plant represent an approximate average for the industry.
      Installation of only an afterburner in a model plant of this size
 would require an investment of $25,000, for which the total annual
 cost  would be $23,100.  Investment in the fabric filter system in
 addition to an afterburner for a model plant of this size would add
 approximately $18,000.  It appears that recovery of carbon black
 will  more than offset the annual cost of the fabric filter.   There-
 fore, no additional annual cost has been estimated.  Investment in
 the 80 percent of the plants adding afterburners will be approximately
 $25,000, and in the 20 percent adding fabric filters and afterburners
 it will be $43,000.   The annual cost of $1,350,000 for these controls
will be slightly more than $0.005 for each of the 266 million tires
 and tubes estimated to be produced in the metropolitan areas in
 Fiscal Year 1976.  Investment and annual costs of the indicated
magnitude can be absorbed within the normal operation of the firms.
                               IV-190

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N.   Sulfuric
     1.   Introduction
          Sulfuric acid is a strong, economically priced inorganic acid
     that is utilized in the production of phosphate fertilizers and
     other industrial chemicals, in the purification of petroleum, in
     the dyeing of fabrics, and in the pickling of steel.  Greater than
     90 percent of all sulfuric acid produced is by the contact process.
     In this process, sulfur or pyrite is burned to form sulfur dioxide
     (S02) which is then catylyzed to sulfur trioxide  (SO,).  The SO, is
     then absorbed in weak sulfuric acid to form the concentrated products.
     2.   Emissions and Costs-of-Contfol
          Sulfur dioxide that remains unconverted and  acid mist particulates
     that escape from the acid absorption tower are the pollutants for
     which  control costs have been developed.  With only a single absorption
     stage, approximately a 96 percent conversion of SO™ to SO- can be
     expected.  To comply with the SO™ standard, a conversion efficiency of
     99.5 percent is required.  This is equivalent to  an overall 86 percent
     removal efficiency.  To accomplish this, it is assumed that plants will
     install a secondary absorption tower with appropriate addition of heat
     to facilitate more complete conversion of SO™.  Although most plants
     do control acid mist particulates to some extent, the average industry
     control level of 46 percent does not meet the particulate standard.
     An overall industry removal efficiency of 67 percent will be required.
     To meet this standard, it is assumed that more efficient acid mist
     eliminators will be installed.  By Fiscal Year 1976, if these control
     measures are not adopted, emissions of sulfur oxides and particulates
     will reach 921 thousand tons and 90.1 thousand tons, respectively.
     With the specified controls, these will be reduced to 129 thousand
     tons and 55.1 thousand tons, respectively.
          The investment required to implement the controls by Fiscal Year
     1976 will reach $176 million and the annual cost  is estimated as $41
     million.  This annual cost does not take into account the slightly
     increased yield of sulfuric acid which will occur.
     An economic impact analysis for this industry is not included in this
report.  A comprehensive study is currently in preparation by APCO.
                                   IV-191

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3.   Engineering Basis of the Analysis
     The rate of emission of tail-gas from a contact sulfuric
acid plant is determined by the concentration of SCL in the feed
stream to the SCL-to-SO. converter; this concentration is subject
to process control.  Many plants take enough air into their sulfur
burner to provide adequate excess oxygen for conversion, others add
so-called "dilution air" after burning but prior to one or more
stages of the converter.  To maintain plant thermal balance, it
is necessary for the S09 concentration to be in excess of about
3 percent.  As the S0? concentration is increased, stack losses
of unconverted SO^ also increase.  Most plants vary the SO. concen-
tration in order to vary production, but avoid concentrations
causing conversion efficiency to fall below about 96 percent.
     It was assumed that 96 percent conversion is obtained with an
eight percent S02 concentration to the converter and that the actual
tail-gas rate is thus about 74 acfm Cat 150  F) per ton-per-day
(tpd) plant capacity.
     The concentration of S0_ in the tail-gas from a contact sul-
furic acid plant operating at 8 percent S09 concentration to the
converter and 96 percent conversion efficiency is fixed at about
3500 ppm.  This figure was assumed to represent average operations
for the industry and agrees with literature, industrial, and APCO
sources as representative of present-day operations.  The assumed
SO- standard of 500 ppm thus requires an 86-percent reduction in
the present average emissions.
     With the exception of oleum production (sulfuric acid containing
excess S0_), acid mist emissions from contact sulfuric acid plants
are less subject to process control variation than are S0? emissions.
Acid mists arise from two independent sources:   (1) moisture-SO,
reactions within and outside of the process equipment and  (2) liquid
sulfuric acid entrainment in exhaust from the S0_ absorber.  The
                              IV-192

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moisture-S03 reactions  include  reactions  of  SO with residual moisture
in the dried process air, moisture  arising from the oxidation of
hydrocarbon impurities  in the sulfur,  and atmospheric moisture that
contacts the tail-gas exiting the stack.  The  moisture-SO_ sources
depend on the operation of  the  drier and  whether or not oleum is
being manufactured.  Fine acid  or SO   mists  are formed after the con-
verter when either moisture reacts  with SO-  or the SO- dew-point
   o        0
 (50  C = 122  F)  is reached.  Both  types  of  mists pass through the
•absorber with little removal and thence through the stack.  If S0_
mists are emitted, they react with  atmospheric moisture to produce
acid mists.
     For this report, a value of 16 mg mist  per scfm of tail-gas was
assumed.  This value is somewhat higher than the average reported
 in Reference 74 but is  in line  with the more recent data reported
 in Reference 17.  The particulate emission standards are the process
weight rate standards.   Because combustion air is excluded, the
weight rate factor is  (32 + 18) / 98 = 0.51, i.e., 0.51 pounds of
raw materials yield 1.00 pound  of product.   The required efficiency
for particulate control ranges  from 43 percent for a 50 tpd plant
 to 93 percent for a 5000 tpd plant.
     The basis for control  of S0« emissions  was that of improving
process yield, but because  very high  (about  99.5 percent) overall
 SO--to-SO, conversions  were required to meet the 500 ppm standard,
cost estimating was limited to  the  double absorption method.  The
basis chosen for  estimating the cost of acid mist control was
utilization of glass-fiber  mist eliminators  capable of removing
100 percent of particles greater than  3 microns and about 80 percent
of particles less than  1/2  micron.  Reference  74 gives limited data
indicating that mist particles  may  be  assumed  to be such that
adequate control  will result.   These devices were assumed to
operate with 6W to 8" w.g.  pressure drop.
                                 IV-193

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        Sulfuric acid plants were reported by location and capacity
   [Ref.  75].   The controls selected were second absorption towers in
   the acid-making process and additional acid mist eliminators in the
   exhaust streams, where necessary.  Some plants need another catalyst
   bed; however, such would be an investment in production equipment.
        Costs  were calculated assuming one process stream per plant,
   since no plant was reported to have a capacity larger than the known
   maximum process stream size.  The cost of adding a second tower was
   included in the estimated control cost, but the cost of another
   catalyst bed was assumed to be compensated for by the increased
   production efficiency.  Cost parameters for a second absorption
   tower were based on data from Chemical Engineering Progress
   [Ref. 76J,  which gives costs for a new plant of 1000 tons per day
   production using either single or double absorption.  The difference
   in costs was multiplied by 2 to allow for modification of existing
   equipment,  and then scaled to other plant sizes based on the cost
   being proportional to capacity to the 0.6 power.  Cost parameters
   for mist eliminators were based on data from the Monsanto Chemical
   Company (Brinks Mist Eliminators),  Costs were calculated for each
   plant by capacity and then aggregated for the 298 metropolitan
   areas.  These costs are presented in Tables IV-62 and IV-63.
TABLE IV-62.  - SULFURIC ACID EMISSION CONTROL  COSTS:   DOUBLE ABSORPTION
Plant Size
(1007o H SO tons /day)
50
100
200
500
1000
5000
Costs
($1000)
Investment
120
185
280
485
760
2080
Annua 1
26.0
40.0
64.0
113.0
191.0
664.0
                                   IV-194

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TABLE IV-63. - SULFURIC ACID EMISSION CONTROL'COSTS:  MIST ELIMINATOR*
Plant Size
(1007c H2S04, tons/day)
50
100
200
500
1000
5000
Costs
($1000)
Investment
4.5
9.5
19.5
43.8
82.5
375.0
Annua 1
0.9
1.9
3.9
8.8
16.5
75.0
         Brink Mist  Eliminator,  Type H-V or S-C.
    4.   Industry Structure
         In 1967 there were 213 plants with a total capacity of 38.7
    million tons of sulfuric acid in the United States.  Production
    mounted to 28.8 million tons.  Within the 298 metropolitan areas
    there were 180 plants with a total capacity of 32.9 million tons.
    These plants produced 24.5 million tons of sulfuric acid.
0.   Varnish
    1.   Introduction
         Varnish is one product  group produced by the paint industry.
    This industry also manufactures and distributes paints (in paste
    and ready-mixed form), lacquers, enamels, and shellac; putties and
    caulking compounds; wood fillers and sealers; paint and varnish
    removers; paint brush  cleaners,  and allied  paint  products.
                                    IV-195

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     'Technical and statistical literature dealing with the paint
industry is often not clear as to the technical definition of
"varnish" as opposed to other product classifications.  Generally,
varnish is an unpigmented protective coating of natural or snythetic
resins dissolved in a volatile oil for use on wood or sometimes metal.
Like almost all paint industry products,  varnish is manufactured using
a process where the proper amounts of ingredients are mixed together
in a batch and then packaged.  Varnish is unique in that it is  cooked
in the manufacturing process.  However, like paint, varnish cures
through polymerization by reaction of the binder with oxygen in the
air after evaporation of the solvent.  In contrast, lacquers cure
merely by evaporation of the solvent, forming the film.  While  varnish
is usually unpigmented, producing a clear coating,  it may also  be
pigmented.  It may also be used occasionally as a base in making
paint.
2.   Emissions and Costs of Control
     Varnish must be cooked during production, which results in the
evaporative emission of hydrocarbons.  Air pollution control to 90  -
95 percent efficiency can be attained using direct-fired afterburners.
     All varnish plants in California were assumed to be controlled,
while only about 20 percent of the plants located elsewhere were
assumed to be controlled.  The overall national level of controls
was estimated to be 18 percent.  Emissions for 1967 were estimated
by using an emission factor of four percent of throughput.  Hydro-
carbon emissions were thus estimated to be 2,200 tons per year  for
1967 in the 298 metropolitan areas.  Implementation of the Clean Air
Act would require an initial investment of $790,000 and an annual
cost of $0.95 million.  Emissions would be reduced to approximately
300 tons per year in Fiscal Year 1976.
3.   Engineering Basis of the Analysis
     The cost of a direct-fired afterburner system serving two
varnish cookers varies from about $2,000 to $3,000 depending on
the type of venting system and the exact type of afterburner
[Refs. 77-79].  Exit gas rates on the order of 350 acfm to about
1,000 acfm are normally encountered.  More than one varnish cooker
is usually used at a plant, and for the purposes of this report,
                             IV-196

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a step-wise increase  in  cost was  used  as  the manufacturing  capacity
of an establishment increased.  This cost versus  size relationship
is shown in Figure IV-30.
     Operation  and maintenance  costs,  assuming gas  stream input  and
output tempreatures of 500 and 1200°  F,  respectively, were based on
the following equation  [Ref. 15]:
      where:
                  S[195.5 x 10~6PHK + HF  + M]
               = acfm, 600 acfm for up to 250 gal tank,  and 1200  acfm
                 for 250-1000 gal tank;
             P = 1" water;
             H = 2400 hours/year (240 days at 10 hrs/day);
             K = $/kwh;
            ^F.j = $0.0027/acfm/hr (0.03 cfm fuel/acfm exit gas)  [Ref.15],
                 fuel cost = $0.0015/ft3;
             F2= $0.0015/acfm/hr, fuel cost = $.00085/ft3;
             F3= $0.0009/acfm/hr, fuel cost = $.00050/ft3;
             M = $0.06/acfm.
     The various fuel costs  (F.) were based on average gas  rates  for
different parts of the country  [Ref. 80].  Using these fuel costs,
the annualized cost factors  (including 20 percent depreciation and
capital charges) presented  in Table IV-64 were obtained.
        TABLE IV-64. - CAPACITY VS. ANNUALIZED COST FACTORS

Capacity
(gal)
0-250
250-1000
Annualized Cost Factors
($)
East Coast,
Northwest, Hawaii
(Fi)
4390
8705
Midwest
(F?)
2650
5225

Southwest

-------
       15
f
    o
    o
    o
    g
    13
    0)
    cn
    e
    M
       10
                     500
1,000
            2,000



Plant Capacity   (gallons)
3,000
                     Fig. IV-30.  Installed Cost  for Direct-fired Afterburner  for  Varnish Plant.

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     Emissions for 1967 were estimated by  using  an  emission  factor of 4
percent of throughput  [Ref. 14] and assuming  20  percent of the plants
were already controlled.  Fully controlled emission estimates were based
on all plants being controlled with a hydrocarbon removal efficiency of
90 percent.
     Due to the varied types of varnish  plants,1  a model plant approach
was used to determine  control costs.  Plant names,  locations, and numbers
of employees for plants producing  varnish  were.extracted from a Dun
and Bradstreet listing.  Area varnish-making  capacity was estimated
by relating regional employment to the ratio  of  national production of
varnish to national employment in  the industry.  The control costs for
the model plant were based  on a production rate  of  250 gallons per cooker
and on a direct-fired  afterburner  (without heat  exchange) control system.
A step-wise increase in control costs based on as many as four tanks
venting into a single  control system was used.   Any plant larger than one
thousand gallons  (4 cookers at 250 gal.  each), therefore, required at
least two control systems.
     Twenty percent of the  plants  throughout  the country were assumed
to have adequate existing controls and all plants in California were assumed
to be adequately controlled.
     The average size  of the plants within a  region was obtained by first
dividing the annual regional varnish manufacturing  capacity  by 240 days
per year and then dividing  this daily capacity by the, number of establish-
ments.  Where one or two plants in a region were extremely large, as indi-
cated by their employment,  they were handled  separately, i.e., not averaged
in with the smaller plants. Only  plants with more  than 2 employees were
included in the cost analysis.
     The cost for the  average plant (indicated in Figure IV-31) was multi-
plied by 0.8  (eighty percent of the plants were  assumed uncontrolled.)
Costs for very large plants, were estimated as separate items and added
to the cost of the average  plants,
     Annualized costs  included operating and  maintenance costs and 20
percent of capital investment.  Variation  in  fuel cost was taken into
account as previously  shown in Table IV-64.
                                    IV-199

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 4.   Scope  and Limitations of Analysis
     Because of the large number of small firms producing  varnish,
 data on plant location is incomplete.  Detailed data  on plant
 capacities  and production are also incomplete and were estimated
 from industry totals by applying known relationships  to data on
 employment  by plant and industry totals.  Statistics  on varnish  or
 resins produced by heat reaction in 1967 (or any other year)
 apparently  do not exist either among government or industrial
 sources.  The problem is further compounded by the fact that some
 products that are called varnish are not varnish (although they may
 have been in the past) but are more properly called lacquers.
 Electrical  insulating varnish is an example of a major product of
 this type.
     Financial data by plant or firm are even more fragmentary and,
 therefore,  estimated industry costs may be somewhat in error.   However,
 the estimates given are felt to indicate the order of magnitude of
 industry cost impact and to reflect a reasonable approximation of the
 control cost per gallon pf product.
 5.   Industry Structure
     One statistical source indicates  that there were 220  plants
 producing varnish in the United States in 1967 and  216 of  these
 plants were located in the 298 metropolitan areas.   Estimated capacity
was 23 million gallons for the U.  S.  and 22 million gallons for the
metropolitan areas.   Production by United States and metropolitan
 area plants was estimated at 10 million and 9.6 million gallons in
 1967,  respectively.
6.   Markets
     The market for varnish is largely a function of building and
building maintenance activity; competition for sales is keen.   This
 results from the large number of firms that produce varnishes,  large
 unused production capacity, low investment requirements,  a well-
 known technology,  and a number of very competitive substitutes.
                            IV-200

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     Varnish, like other paint industry products is distributed
through two district channels; industry and trade.  Industrial sales
are made directly by the manufacturers to industrial users for use
either in production or for maintenance.  Trade sales are those made
to wholesalers and other middlemen for resale to the general public,
contractors, and other commercial accounts.
     Industry sources indicate that varnish products move almost
entirely in trade sales channels.  They have been almost entirely
replaced in industrial markets by other types of finishes with
superior characteristics such as faster drying and greater durability.
A similar trend is taking place in trade sales, where varnish is
receiving stiff competition from lacquer, urethane, and epoxy finishes
because of drying and durability properties.  In addition, increasing
use of "prefinished" products are reducing demand for on-site finish-
ing and finishes.
     Paint industry products are generally not important in world
trade since  they are expensive to ship and easily produced locally.
International  licensing agreements and foreign joint ventures are
common and U.S. industries are leading participants.
     In 1967,  paint industry exports were 10.2 million gallons valued
at  $42.7 million, or 1.7 percent of all U. S. dollar shipments.  Trade
sales products account  for about 60 percent of the total shipped on a
volume basis.   Imports were  $1.6 million and included some distempers,
water pigments,  stamping  foils, and dyes.
7.   Trends
     For the decade ending in 1967, paint sales (dollars) increased at
an  average annual rate of 4.7 percent as compared to 6.3 percent for
GNP and 1.4 percent for population.  Volume of sales (gallons) increased
by  an average  of 3.4 percent per year.  Future growth in the paint
industry should approximate  the volume rate.
     The factors limiting long-term growth in the paint industry and
sales of varnish are increasing use of products that require no paint
or  less paint,  and the improvement of paint products themselves. Pro-
ducts  that require no paint  include such materials as stainless steel,
aluminum, glass, stone  and brick,  Fiberglass reinforced plastics,
                              IV-201

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laminates, extruded or molded plastics and such surfacing materials
as wall paper, plastic films, porcelain enamels, and electroplated,
phosphated or oxidized metal films.  To meet such competition, the
paint industry has developed more durable and easily applied coat-
ings resulting in lower costs per unit of surface covered.
     Factory finished building materials are replacing on-site
painting which is becoming increasingly expensive.  Labor now accounts
for as much as 80 percent of the total cost of on-site finishing.
Since prefinishers generally use specially formulated industrial
finishes, the trend towards prefinishing in building products is  at
the expense of trade sales products such as varnish.
     Varnish is not expected to share in the growth of paint industry
sales because of the competition from substitute materials,  from pre-
finishing, and from other coatings.  Instead, varnish is  expected
eventually to be largely replaced by competitive finishes and materials
among trade customers as it has among industrial customers.   Because
habits and customs are slow to change, varnish sales and  production
are expected to remain approximately at present levels through fiscal
year 1976.
8.   Economic Impact of Control Costs
     Assuming approximately 220 firms producing varnish with production
of 23 million gallons, this analysis indicates that for the  average
firm an initial capital investment of $3,600 or $0.036 per gallon of
capacity would be required.  Because of the large unused  capacity,
investment per gallon of product would be almost $0.08.
     The total annual cost to control the varnish producing  segment
of the paint industry would be $950,000 per year by Fiscal Year 1976.
This cost includes allowances for recovery of investment, interest,
taxes, fuel, labor, maintenance, and other expenses of owning and
operating the air pollution control equipment.  For an estimated
Fiscal Year 1976 production of 10 million gallons, this gives an
incremental cost of almost $0.10 per gallon.
     Considering the nature of competition among producers  and by
substitute materials, few firms can afford cost increases of this
sort from profits nor will they be able to completely shift  the
                            IV-202

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$0.10 per gallon increase to the consumer through price increases.
It is expected that about half this increase can be shifted; thus,
prices may be expected to rise by about $0.05 per gallon above the
level they would otherwise achieve by 1976.
     It is expected that all producers in a region or market will
tend to postpone installation of control equipment as long as
possible so as to avoid incurring this cost.  When regulatory
orders force compliance, most firms will act at the same time.
The action taken by firms will depend on their evaluation of their
own varnish sales, their share of the varnish market, and the
firm's expectation of customers reaction to a price increase.  Marginal
varnish producers will discontinue production and will either drop
varnish from their product line or contract to buy varnish for
resale under their own label.
     Any price increase will cause some buyers to switch to the wide
variety of substitutes available, hastening present trends to other
products.  Since use  of varnish is already declining and a price
increase will  cause a further decline, the firms that install air
pollution  control equipment will do so only on equipment they antici-
pate will be used regularly enough so that they can recover their
investment.  As a result,  the present unused capacity may be scrapped
 to the maximum extent possible, and some of the currently used
 capacity may also be  scrapped.
      If  this pattern  occurs, there is little reason to anticipate
 financial  difficulties except for those firms that are already marginal.
 The paint  industry as a whole is basically healthy.
                               IV-203

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                  LIST OF SELECTED REFERENCES
 1.   R. J. Black, et al.  "The National Solid Wastes Survey."  Paper
          Presented at American Public Works Association, Miami,
          Florida, October 24, 1968.

 2.   A. J. Munich, et al. 1968 National Survey of Community Practices,
          Dept. of Health, Education, and Welfare, PHS, EGA, Solid Waste
          Program, 1968, and Combustion Engineering Company Incinerator
          Study, 1967 PHS Contract.

 3.   C. Smallwood, Jr.  Private communications, August 12, 1969.

 4.   Elements of Solid Waste Management, Training Manual.  EGA,
          Washington, D. C.:  PHS, March 1969.

 5.   T. Casberg.  Department of Defense, Washington, D. C.  Private
          communication, October 1968.

 6.   Control Techniques for Particulate Air Pollutants.  PHS Publication
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 7.   R. E. Zinn, and W. R.. Niessen.  "The Commercial Incinerator Design
          Criteria," .ASME, 1968, National Incinerator Conference, New York,
          May 5-8.

 8.   E. R. Kaiser, and J. Tolciss.  "Smokeless Burning of Automobile
          Bodies,"  Journal of the Air Pollution Control Association.
          Vol. 12, No. 2 (February 1962), pp. 64-73.

 9.   A. B. Walker.  Electrostatic Precipitators.   American City, September
          1964.

10.   John Dement, "Cost of Dolomite-Injection/Wet Scrubbing."  Unpublished
          report of the Air Pollution Control Office, Raleigh, N. C.

11.   National Academy of Engineering, "Abatement  of Sulfur Oxide Emissions
          from Stationary Sources."  Report of a Study underway by the
          Committee on Air Quality Management for the National Academy of
          Engineers in execution of work with the  Air Pollution Control
          Office, Washington, D. C., 1970.

12.   Arthur M. Squires, "The Control of SO™ from Power Stacks,"  Chemical
          Engineering.  (November 6, 1967), pp. 260-267.

13.   H. E., Friedrich.  "Air Pollution Control Practices and Criteria for
          Hot-Mix Asphalt Paving Plants."  Paper presented at the 62nd Annual
          Meeting of the Air Pollution Control Association, New York,
          June 22-26, 1969.
                                      IV-204

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14.    R.  L.  Duprey.   Compilation of Air Pollutant Emission Factors.
          Public Health Service Publication No. 999-AP-42.  Durham,
          N. C.:  U.S. Dept. of Health, Education, and Welfare, National
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15.    J.  A.  Danielson (ed.).  Air Pollution Engineering Manual.  Public
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16.    George H.  H. Schenck and Peter G. Donals.  "Cement—An Industry in
          Flux,"  Mining Engineering.  (April 1967), p. 87.

17.   "National Emission Standards Study,"First Draft.  U.S. Dept. of
          Health, Education, and Welfare, APCO, Raleigh, N. C., July 23, 1969.

18.    H.  R.  Brown, et al.  Fire and Explosion Hazards in Thermal Coal-
          drying Plants.  U.S. Dept. of the Interior, Bureau of Mines
          Report of Investigations 5198.  Washington, D. C. :  U.S.
          Government Printing Office, February 1956.

19.    E.  Northcott.  "Dust Abatement at Bird Coal,"  Mining Congress
          Journal.  (November 1967), pp. 29-34; 36.

20.    David H. Ellis.  West Virginia Air Pollution Control Commission,
          Charleston, West Virginia, July 11, 1969-  Private communication.
                                                                          •
21.    H.  A.  Schrecengost and M. S. Childers.  Fire and Explosion Hazards
          in Fluidized-bed Thermal Coal Dryers.  U.S. Department of the
          Interior, Bureau of Mines Information Circular 8258.   Washington,
          D. C.:  U.S. Government Printing Office, 1965.

22.    R.  J.  Frankel,  "Economic Impact of Air and Water Pollution
          on Coal Preparation."  Presented at the 1968 Coal Convention,
          American Mining Congress, Pittsburgh, May 5-8, 1968.

23.    A.  C.  Stern (ed.).  Air Pollution. Vol. Ill (Znded.).  New York:
          Academic Press, 1968.

24.    Keystone Coal Buyers Manual. 1967.  New York:  McGraw-Hill Co., 1968.

25.    U.S. Department of the Interior, Bureau of Mines.  Bureau of Mines
          Minerals Yearbook (four editions:  1964-67).  Washington, D. C.:
          U.S. Government Printing Office.

26.    "Cement Capacity in North America,"  Rock Products.  Vol. 72, No. 5
          (May 1969), pp. 49-54.

27.    "Major Process Equipment in New U.S. Cement Plants, 1960-1967,"
          Rock Products.  (May 1968), pp. 120-121.

28.    Control Techniques for Fluoride Air Pollutants.  Prepared by Sing-
           master and Breyer for U.S. Department of Health, Education, and
           Welfare, PHS, Consumer Protection and Environmental Health -
           Service! NAPCA, Washington, D. C., February 13, 1970.

                                     IV-205

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29.   U.S'. Department of Commerce, Business and Defense Services Administration,
          U.S. Industrial Outlook, 1969.  Washington, D. C. :  U.S. Government
          Printing Office, December 1968, p. 142.

30.   H. Bland, Aeroglide Corporation.  Private communication.

31.   M. J. McGraw.  "Air Pollutant Emission Factors."  Draft.  Department
          of Health, Education, and Welfare, PHS.  August, 1970.

32.   The Cargill Corporation.  Private communication.

33.  "A Systems Analysis of Process Technology and Air Quality Technology
          in the Integrated Iron and Steel Industry,"Preliminary Report.
          Batelle Memorial Institute, Columbus, Ohio, March 31, 1969.

34.   Proceedings;  The Third National Conference on Air Pollution (Washington,
          D. C. - December 12-14, 1966).  Washington, D. C.:  U.S. Department
          of Health, Education, and Welfare, (PHS), 1967.

35.   Annual Statistical Report, 1967.  American Iron and Steel Institute.
          New York, N. Y. :  American Iron and Steel Institute, 1967.

36.   Systems Analysis of the Integrated Iron and Steel Industry (Appendix C),
          PH22-68-65.  Pittsburgh, Pennsylvania:  Swindell-Dressier Company,
          March 31, 1969.

37.   R. L. Collins, et al.  Cost to Industry of Compliance to National
          Emission Standards.  Research Triangle Park, N. C.:  Research
          Triangle Institute, 1969.

38.   Business Week. (September 12, 1970), p. 24.

39.   N. S. Lea and E. A. Christoferson, "Save Money by Stopping Air
          Pollution,"  Chemical Engineering Progress.  Volume 61, No. 11
          November 1965), pp. 89-93.

40.   E. L. Smith, "Sulfite Pulping and Pollution Control,"  Combustion.
          (June 1967), pp. 42-44.

41.   Systems Analysis Study of Emissions Control in the Wood Pulping
          Industry;  First Milestone Report.  Conducted by Environmental
          Engineering, Inc. and the J. E. Sirrine Co. for the National
          Air Pollution Control Administration, February 10, 1969.

42.   Lockwood's Directory of the Paper and Allied Trades.  New York, N. Y.:
          Lockwood1 (3 Trade Journal Co., Inc., 1968.

43.   "Regenerated Lime - The Quiet Boom,"  Rock Products.  (July 1968), pp.
          54-60.

44.   J. Sableski, Air Pollution Control Office.  Private communication.
                                     IV-206

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45.   C.  J.  Lewis and B. B. Crocker.  "The Lime Industry's Problem of
         Airborne Dust,"  Journal of the Air Pollution Control Association.

46.   R.  S.  Boynton.  Chemistry and Technology of Lime and Limestone.  New
         York:  Interscience Publishers, 1966.

47.   Chicago Bridge and Iron Company, June and August, 1969.  Private
         communication.

48.   Los Angeles County Air Pollution Control District, August, 1969.
         Private communication.

49.   Grekel, et al.  "Why Recover Sulfur from H S,"  Oil and Gas Journal.
         (October 28,  1968).                   2

50.   E. W.  Sledjeski and R. E. Maples.  "Impact of Residual Sulfur Limits on
         U.S. Refining,"  Oil and Gas Journal.  (May 13, 1968), pp. 90-95.

51.   HPI Construction  Boxscore, Hydrocarbon Processing, June 1968.

52.   F. Rohrman and J. Ludwig.  "Sources of Sulfur Dioxide Pollution."
         Paper No. 46e, presented at the 55th meeting of the American
         Institute of  Chemical Engineers, February 7-11, 1965.

53.   E. Vincent, Air Pollution Control Office, July 1969.  Private communi-
         cation .

54.   Air and Water Conservation Expenditures of the Petroleum Industries
         in the U.S.   New York:  Crossley, S-D Surveys, Inc., August 1968.

55.  Bulletin G-87A.   Barberton, Ohio:  Babcock and Wileox Co., 1956.

56.  H. S.  Bauman.  Fundamentals of Cost Engineering in the Chemical Industry.
         New York:  Reinhold Book Corp., 1964.

57.   R. P.  Hangebrauck, et al.  Sources of Polynuciear Hydrocarbon in the
         Atmosphere.   PHS Publication No. 999-AP-33.  Washington, D. C. :
         U.S. Department of Health, Education, and Welfare, 1967.

58.   Atmospheric Emissions from Petroleum Refineries.  No. 763.  Washington,
         D. C.:  Department of Health, Education, and Welfare, PHS, 1960.

59.   U.S. Department of Commerce, Bureau of Census.  1963 Census of Business.
         Washington, D. C.:  U.S. Government Printing Office, 1964.

60.   F. M.  Alpiser.  Private communication.

61.   Systems Study for Control of Emissions in. the Primary Nonferrous
         Smelting Industry (3 vols.).  San Francisco, California:  Arthur
         G. McKee and  Company, June 1969.

62.   Norm Plaks, National Air Pollution Control Administration.  Private
         communication.
                                     IV-207

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63.   "Producer profiles:  Summary of the major secondaries,"  Metals Week.
           (August 18, 1968).

64.   The Waste Trade Directory, 1966-67 Edition.  New York, N. Y.:  Atlas
           Publishing Company, 1967.

65.   H. F. Lund.  "Industrial Mr Pollution Control Equipment Survey:
           Operating Costs and Procedures."  Journal of the Air Pollution
           Control Association.  Vol. 19, No. 5 (May 1969), pp. 315-321.

66.   U.S. Department of Commerce.  Economic Impact of Air Pollution Controls
           on the Secondary Nonferrous Metals Industry.  Washington, D. C.:
           U.S. Government Printing Office, 1969-

67.   Mr. Levin, U.S. Department of Commerce.  Private communication.

68.   F. A. Ferguson, T. K. Semrau, and D. R. Monti.  "S02 from Smelters:
           By-product Markets a Powerful Lure,"  Environmental Science &
           Technology.  Vol. 4, No. 7 (July 1970), pp. 562-568.

69.   "Economic Aspects of Control of Air Quality in the Integrated Iron &
           Steel Industry,"  Draft of Final Report to HAPCA.  Battelle
           Memorial Institute, Columbus, Ohio, March 31, 1969.

70.   G. R. Row.  "Baghouse Filter Controls Fine Dust Particles,"  Plant
           Engineering.  (July 10, 1969), p. 70.

71.   Rubber World.  (February 1970), p. 59.

72.   U.S. Department of Health, Education, and Welfare.  Control Techniques
           for Particulate Air Pollutants.  PHS Publication No. AP-51.
           Washington, D. C.  NAPCA (PHS), January 1969, p. 175-

73.   Los Angeles County Air Pollution Control District, September 15,  1969.
           Private communication.

74.   U.S. Department of Health, Education, and Welfare.  Atmospheric
           Emissions from Sulfuric Acid Manufacturing Process.  Public
           Health Service Publication No. 999-A-13.  Washington, D. C.:
           U.S. Government Printing Service, 1965.

75.   Chemical Economics Handbook. California:  Stanford Research Institute,
           December 1967.

76.   J. G. Kronsider.  "Cost of Reducing SO  Emissions,"  Chemical Engineering
           Progress.  Larry Resen, editor,  vol. 64, No. 2 (November 1968),
           pp. 71-74.

77.   R. G. Lunche, et al.   Air Pollution Engineering in Los Angeles County,
           July 1, 1966, p. 30.

78.   J. L. Mills, et al.  "Design of Afterburners for Varnish Cookers,"
           Journal of Air Pollution Control Association. Vol. 10, No. 2,
           (April  1960), pp. 161-168.


                                       IV-208

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79.    R.  L.  Chass, et al.  "Contribution of Solvents to Mr Pollution and
           Methods for Controlling Emissions,"  Journal, of Air Pollution
           Control Association.  Vol. 13, No. 2 (February 1963), pp. 64-72.

80.    The Fuel of Fifty Cities.  Report to the National Air Pollution Control
           Administration.  Washington, D. C.:  Ernst and Ernst, November
           1968.
                                     !V-209

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                 APPENDIX 3C

     Alternatives To The Control
         Of Sulfur Oxides  From
Stationary Combustion Processes

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                             APPENDIX V
   Alternatives to the Control of Sulfur Oxides from Stationary
                        Combustion Processes
                         I.   INTRODUCTION
                                                                         r
                                                                         t
                                                                         V
     In the second Cost of Clean Air Report [Ref. 1], it was assumed that
the control of particulate and sulfur oxides emissions from stationary
combustion sources during the period Fiscal Year 1971 through Fiscal Year
1975 would be achieved by a straightforward switching from high-sulfur
coal and high-sulfur residual fuel oil to low-sulfur residual oils.—   At
the time of publication of the second report, inadequate data hampered
consideration of any other possible alternatives.  In the intervening
year, however, data and information have become available on which to
view other alternatives, as well as study the reasonableness of the
fuel switch alternative previously chosen.  The purpose of this appendix
is to summarize these new findings and to discuss the basis of the control
alternatives chosen in the third Cost of Clean Air Report.  Finally,
although this report encompasses only 298 metropolitan areas, the concen-
tration of population and fuel consumption makes it reasonable to broaden
the discussion to the national basis.  Therefore, the focus of this
appendix centers upon conclusions which can be drawn for the entire United
States.

                 II.   PATTERNS OF FUEL CONSUMPTION

A.   Coal
     In 1967 the United States consumption of bituminous coal amounted
to 520 million tons.  Of this amount, only 187 million tons contained
less than 1 percent sulfur.  Of this 187 million tons, 48.6 million tons
were exported and 91.6 million tons were used for metallurgical coking
*J High-sulfur coal is defined as having a sulfur content of greater than
1 percent; and high-sulfur oil greater  than 1.38 percent.
                                  V-l

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purposes.  Within the stationary combustion category, steam-electric
generating utilities consumed 270 million tons, industrial boilers  con-
sumed 78 million tons, commercial-institutional heating plants consumed
5.2 million tons, and residential heating facilities consumed 21.9 million
tons.  By 1975, it is expected that in the absence of any regulations on
allowable fuel usages,steam-electric generation would consume 430 million
tons; industrial boilers, 63 million tons; commercial-institutional heat-
ing plants, 2 million tons; and residential heating plants, 9 million tons.
It is important to notice the expected natural decline in the utilization
of coal for the latter three stationary combustion categories with an
equally noticeable rise in the amounts predicted for the utility steam-
electric generating industry.  Of course, the steam-electric industry's
justification for planned increases in the utilization of coal is that coal
is the only major fuel which could, by itself, meet the cumulative energy
demands for the remainder of this century or beyond [Ref.  2J.  A more
comprehensive discussion on fuels availability will be given in Section III.
B.   Oil
     Fuel oils presently account for 17 percent of the nation's fuel con-
sumption in terms of energy equivalents [Ref.  3].   Fuel oil may be con-
sidered as two types:  distillate (No. 1, 2 and 4 oils)  and residual
(No. 5 and 6 fuel oils).  All distillate oils fall within the sulfur con-
tent range of 0 - 1.0 percent.
     Consumption of distillate oil for the Nation in 1967 amounted to
approximately 550 million barrels.  Percentage utilization for residential,
commercial-institutional, and industrial users was 82 percent, 10 percent
and 8 percent, respectively.   However, the apparent trend is toward a
greater proportion of distillate oils to be used by commercial and
industrial customers.
     The average sulfur content of domestic residual fuel oil is about
1.75 percent although the percentage range is  very wide.   Average values
for domestically produced residual fuel oils (No.  6) for various regions of
the country range from 1.36 percent in the Eastern Region to a high of
2.09 percent for the Rocky Mountain Region.   Other values include 1.51
                                   V-2

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percent for the Western Region,  1.70  percent for the Central Region,  and
1.84 percent for the  Southern  Region  [Ref.  2],   Offsetting the  recent
trend of domestic producers  of decreasing domestic,  residual fuel  oils
has been an increase  in the  importation of  this  commodity  from  foreign
countries.  In the  three years from 1965 through 1967,  imported residual
fuel oil increased  from 267  to 345  million  barrels per  year.  In general,
the imported residual fuel oil has  higher sulfur content than domestic
due to the fact that  many of the foreign crude oils  have higher sulfur
content.
     In 1968, 620 million barrels of  residual oil were  consumed in this
country.  Of this,  roughly 25  percent was consumed in each of the  large
commercial-institutional heating plants, industrial  operations, and steam-
electric utilities.  The remainder  was consumed  by vessels,  the military,
oil company usage,  railroads,  and others [Ref. 2],   Most of  the imported
residual oil is received at  east coast terminals.  However,  some is also
received at the west  coast ports and  used in the immediate area.
C.   Natural Gas
     A total of nearly 18., 2  trillion  cubic  feet  of natural gas  was con-
sumed  in the United States during 1967.  About two-thirds  of the gas  is
used for industrial purposes including 2.7  trillion  cubic  feet  for steam-
electric generation.   Approximately 3 trillion cubic feet  is consumed in
residential heating units  and  another 2 trillion for commercial-institu-
tional heating purposes.   Current trends seem to indicate  an increasing
desire to  increase the utilization of natural gas in all stationary
 combustion categories.

                   III.  LOW-SULFUR FUEL SUPPLY PATTERNS

A.   Coal
     Of  the 333 million tons of high-sulfur coal produced  in 1967, it
is  estimated  that  only 11  percent of  this quantity could be cleaned to a
sulfur content of  1 percent  or less by present pyrite washing techniques.
The estimated  cost of cleaning the coal is about 80  to  90  cents per ton.
 [Ref.  4].  Present methods  of  coal washing is limited,  therefore,  to
reduction  of pyritic  sulfur, and it can be expected  to  yield only  a
                                    V-3

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moderate Increase in the supplies of low-sulfur  coals.   In many different
types of coal, the amount of sulfur is present in  almost equal pyritic and
organic fractions.  Experiments with organic solvents,  such as hexane,
to remove the organic sulfur indicates that costs will be  prohibitive
[Ref. 4].  However, notwithstanding the sulfur content problem,  coal
is by far the most abundant fossil fuel resource in this country.
Moreover, The Office of Coal Research indicates that proven coal reserves
are roughly equivalent to a 400-year supply at present rate of production.
B.   Oil
     Both the Bureau of Mines and Oil Import Administration indicate
that there is no appreciable surplus of residual oil production  capacity
in the United States today; furthermore, domestic production of  residual
fuel oil has been decreasing in this country.  It is anticipated that
refiners will continue to reduce the yield of residual oil  in the future.
The possibility of increased production of crude oil resulting in increased
production of the various fractions is not very promising.  Except for
the Southern Lousiana fields, no significant increases in pumping is
anticipated [Ref. 5].
     Even with residual oil desulfurization techniques, domestically
produced fuel oil does not appear to be a major alternative.  Whatever
low-sulfur oils that can be produced and/or desulfurized will be
needed for commercial-institutional heating plants, and to some extent
for industrial operations.  Therefore, residual oils are not apt to play
any major role in the solution to the sulfur dioxide problem in  the
steam-electric utility industry.
     Residual oil may now be imported at east coast ports without limit
for eastern consumption, but west coast imports are sharply limited by
quota.  Planning is already underway to desulfurize the foreign  crude
oil either at the refinery or more likely in this country.  From these sources
the supply of low-sulfur content residual oil can be increased tremendously.
It appears unlikely, however, that the Oil Import Administration will per-
mit, for reasons of national security, imports into any additional regions
of the country that will substatially increase dependence of United States
power producers on imported residual oil.
                                    V-4

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C.   Natural Gas
     Natural gas is an ideal fuel  from the  point  of  view of  air  pollution
emissions.  Particulate emissions  are  near  zero and  sulfur dioxide  emissions
are negligible.  However, the Federal  Power Commission  reports that  the
supply of natural gas is diminishing to critical  levels  in relation  to
demand.  On the basis of current trends,  only  a few  years remain before
demand will outrun supply [Ref. 6].
     The Commission does report on several  supplementary sources of gas
which may prove feasible during the 1980's.  The  processes include high
B.t.u. gasified coal, liquified natural gas (LNG)  imports by ocean tanker,
and Alaskan natural gas.  The technical feasibility  of producing pipe-
line quality gas from coal  and lignite has  been demonstrated in  a recent
study by Bituminous Coal Research, Inc.  which  is  covered in Reference 6;
however, the economic feasibility  of producing pipeline  quality gas from
coal and lignite has yet to be demonstrated on a  large scale in  the United
States  [Ref. 6].
     The transportation of  LNG in  specially designed ocean freighters
could potentially relieve the U. S. gas  distribution industry from com-
plete dependence on U. S. and Canadian produced natural  gas.   The impact
of the importation of significant  quantities of LNG would not be felt for
a considerable period of time.  Large  additions to the present ocean-
going fleet must be constructed, storage facilities of significant expense
and technological complexity must  be constructed  at various U. S. deep
water ports, and additions  must be made to  the existing  natural gas pipe-
line network.  Finally, the net result of LNG  inputs in  the future may
be simply to satisfy natural increases in the  demand for natural gas.
Therefore, it may not be reasonable to consider the use  of LNG as an
alternative for existing nongas-burning facilities.
     The newly discovered Alaskan  natural gas  field will likely be one of
the world's largest.  However, transportation  via LNG tanker or by pipe-
line will be costly and difficult.  At present, there are no immediate
prospects of exporting natural gas from Alaska to the United States.  To
quote the Staff Report on Natural  Gas  Supply and  Demand, "Alaska obviously
has excellent potential for petroleum  resources.   However, the financial
and manpower drains involved in developing  these  far north resources could
                                    V-5

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have a retarding effect on the development of our other gas  areas.   Money
that might have gone into additional deep drilling,  the development of an
oil shale industry, and gasification of coal, and the exploration of our
other shelf areas may now go to Alaska.  The magnitude of  the  gas reserves
will have to be enormous and the development of a transportation system
will have to be timely in order to offset the possible detrimental  effects."

           IV.  THE REMOVAL OF SULFUR OXIDES FROM STACK GASES

     The preceding has dealt with the possibilities  of limiting the amount
of sulfur in the fuel itself; this section will discuss briefly the possi-
bilities of achieving significantly reduced SO  emissions by the applica-
tion of alternative hardware systems at the stack.   In the past year,  a
great deal of information has been written concerning this area.  Most
of this information is concentrated on the control of emissions from
utility steam-electric generating plants; however, it may be equally
applicable to other large fossil fuel burning facilities.  At  this  point
whether such application will be possible in smaller facilities is  unknown.
     The growing problem of atmospheric pollution by sulfur oxides  has
promoted a large amount of research and development  on processes to remove
this pollutant from power plant stack gases.  The purpose of this section,
therefore, is to present information on each of the  most promising  processes
paying special attention to probable commercial availability,  expected
removal efficiency, costs, by-products where applicable, and suitability
or lack of installation in existing facilities.  The processes being
developed may be reasonably classified as those which yield a  "throwaway"
residue and those which yield a potentially salable  by-product.  A  technical
discussion of each process is limited because such material can be  found
elsewhere in the literature.
A.   Throwaway Processes
     Of the throwaway processes, sufficient work has been done suggest-
ing  that the dry limestone and wet limestone processes will  soon become
commercially available.
     The dry limestone injection process is viewed as the process which
could become the first commercially available process for  sulfur oxide
control.  It is also applicable to older and smaller plants which have a
                                   V-6

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limited life.  The advantages of  the  process  include simplicity,  avail-
ability of limestone in the vicinity  of many  power  plants,  and  ease  of
installation in existing facilities.   The most  significant  disadvantages
include substantial increases in  solid waste  disposal requirements in
the plant, the necessity of high-efficiency,  large-capacity electrostatic
precipitators, very poor overall  S02  removal  (20-50 percent), and low
efficiency of utilization of the  limestone.   Overall,  the results of the
work done on this process may be  considered very  disappointing.
     The limestone injection wet  scrubbing process  could be applicable to
new or existing power plants; however, it is  best adapted for larger
facilities.  The process is under intensive developmental efforts at
present, and successful commercial demonstrations and  acceptance are
anticipated within one to two years.   There are two variations of the
limestone wet scrubbing process.   Either limestone  can be injected into
the power plant boiler, or limestone  or more  preferably lime can be in-
jected directly into the scrubber.  The latter  process was  developed
over 30 years ago in England; however, for a  variety of reasons, modern
emphasis is on the former.  Results of experimental work demonstrate
that a high degree (in excess of  90 percent)  of sulfur oxide removal
can be achieved by this process.   Other advantages  include  particulate
removals in excess of 99 percent  in the scrubber  thus  avoiding the need
for an electrostatic precipitator,  low investment costs in  comparison
with any of the by-product type systems under consideration, and
significantly, the application of a well-known  technology.  Also note-
worthy is that the total operating costs for  limestone wet  scrubbing
may be lower than any of the by-product processes even when credit is
given for the sale of the various products.   Disadvantages  of the process
include a liquid waste sludge, a  possible water pollution problem, the
necessity of reheating the off-gas, and the potential  formation of scale
especially in the scrubber system.
B.   By-Product Recovery Systems
     Several processes for recovering sulfur  from the  stack gas follow-
ing combustion are at or near the demonstration level.  These processes
will remove the sulfur oxide and  convert it into  marketable products
such as sulfuric acid and elemental sulfur.   It must be noted at this
point that the potential acceptability of any of  these processes is
dependent upon sale of the recovered  products at  reasonable prices.
                                   V-7

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In addition, existing power plants will probably not wish to consider
installation of by-product recovery systems due to the extensive integra-
tion into total plant operation which will be required.  Hence, the possible
utilization of these processes would appear more suitable for plants
under design.  Of the by-product processes under consideration, the most
promising ones are the Stone and Webster/Ionics process, the Wellman Lord
process, and the Catalytic Oxidation (Cat-Ox) process.
     The Stone and Webster/Ionics process will produce high purity
H SO,, H~, and 0~ as products.  The process, however, must be limited to
those plants, either new or existing, which have large daily swings in
electrical output due to the large electrical requirements of the process
itself.  Investment costs are projected to be about double those for wet
limestone scrubbers and the annual operating costs are dependent upon the
existence of long term markets for H SO,, H9 and 0 .   This,  of  course,
is dependent upon plant location as well as other market factors.   In
addition, a high efficiency particulate removal device will  still be
required prior to the process.  In any case, it is expected  that possible
commercial availability would not occur before 1975.
     The Wellman Lord process can produce concentrated sulfur dioxide
from power plant flue gas.  The concentrated sulfur dioxide steam can
then be converted in a contact plant to sulfuric acid or in a Glaus plant
to elemental sulfur.  The process is applicable to all boilers  both old
and new.  It seems reasonable that the concentrated SO* would be converted
to elemental sulfur since it is a more valuable by-product than acid.
However, unless additional control systems are used on the auxiliary acid
or sulfur plant, some of the original S02 captured from the power plant
flue gas will eventually be emitted to the atmosphere.  The investment
cost for this process (Wellman and Lord + sulfur plant) is estimated
to be approximately 1-1/2 times that for the wet limestone system.  Unless
a market is available for either the sulfur or sulfuric acid, operating
costs could run as high as twice the wet limestone operating costs.  In
addition, high efficiency particulate removal is required prior to the
process.  Possible commercial availability cannot be expected before the
middle of 1975.
                                   V-8

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     The Catalytic Oxidation  (Cat-C>x)  process  consists  of  two basic  designs.
The integrated system is to be  employed with new power  plants while  the
"reheat" system is intended as  an  add-on  unit  for older plants.   The process
removes S02 from the flue gas and  converts  it  to a potentially salable
by-product which is approximately  80-percent sulfuric acid.   The  process
includes removal of all flyash  from  the flue gas.   The  process is exceed-
ingly expensive—possbily running  3  times the  investment cost of wet lime-
stone scrubbing.  Operating costs, assuming full credit for sale  of  H SO
                                                                     2  4'
will probably exceed that for wet  limestone scrubbing.   If the sulfuric
acid cannot be sold at  the market  price,  the annual costs  are prohibitive.
In any case, commercial availability is not expected before 1975  for the
"reheat" system and the middle  of  1977 for  the integrated  system.

                 V.   OTHER LONGER RANGE  POSSIBILITIES

     At least two processes offer  hope for  removal of sulfur  during  com-
bustion.   These two, the  "fluidized  bed"  combustion process and the  "molten
iron bath" combustion process,  have  not yet entered the development  stage.
It is doubtful  that they  can  be retrofitted into existing  plants  since both
require major boiler design modifications.  The fluidized  process is
applicable to both high sulfur  coal  and oil while the molten  iron bath
process is applicable only for  the combustion  of coal.   Feasibility  studies
for both processes are  currently underway.
     Somewhat related to  the  molten  iron  bath  process is the  so-called MHD
power system which represents an entirely new  concept in the  production of
electrical energy.  Description even in the simplist terms is beyond the
scope of this study; however, the  process would virtually  eliminate  both
sulfur dioxide and particulate  emissions.  Work is being carried  out on a
theoretical level for this process.   No estimate can be given of  the date
of commercial availability.
                                   V-9

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                       VI.  AVAILABLE ALTERNATIVES

     The alternatives as well as other information which has been briefly
discussed above were carefully reviewed for the purpose of arriving at a
reasonable methodology by which emission reductions and control costs for
stationary combustion sources could be attained.   Two constraints were
imposed on the decision making process:  the alternative should stand a
reasonable chance of being implementable by 1976, and the alternative
should be consistent with longer range solutions  to the problem.
A.   Residential Heating
     According to present trends, the usage of coal as a fuel for home
heating is diminishing quite rapidly giving way somewhat to the use of
distillate oil but more rapidly to the use of gas and electricity.  In
some regions, use of distillate oil is giving way to natural gas and
electricity.  For these reasons, the report assumes that coal use for
residential heating will decrease by "natural attrition" with the restric-
tion that no coal boiler could be replaced by another coal boiler; there-
fore, no costs to the residential component of stationary combustion
sources have been assigned as resulting from the  Air Quality Act.  In
other words, it is assumed that whatever changes  have occurred or will
occur in the direction of lower air pollutant emissions will have occurred
without enactment of any form of air pollution legislation.
B.   Commercial-Institutional Heating Plants
     At present, commercial-institutional heating plants are predominantly
oil and gas burning facilities with only minimal  usage of coal.  Further-
more, only a small fraction of these units are presently burning a high-
sulfur fuel oil.  It can also be reasonably assumed that no further facili-
ties which utilize coal or high sulfur residual fuel oil will be installed.
Therefore, the cost estimate developed is only for switching present
coal burning facilities to a low-sulfur content oil.  The utilization of
hardware for the control of the sources is not considered a reasonable
alternative.  Finally, it was assumed that all facilities which burn
natural gas would continue to do so.  New facilities, it was assumed, would
burn low-sulfur oil or gas without the pressure of any form of air pollu-
tion legislation.  Therefore, no control costs for additional sources were
computed.
                                  V-10

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C,    Industrial Boilers
     The choice of a  reasonable alternative for the control of emissions
from industrial boilers was  not so straightforward.  In the absence of
specific legislation  establishing criteria for fuel sulfur content, many
existing industrial boilers  can be expected to be coal-fired for the
foreseeable future.   In  addition, many would continue to burn high-sulfur
residual fuel  oils.   There is a trend away from building new coal burning
facilities with a preference toward increasing utilization of natural gas.
     The use of hardware control of SO  from coal and high-sulfur oil
burning boilers was  considered.  Specifically, the use of the wet lime-
 stone  injection process  was under consideration.  However, the adoption
 of this alternative  would have required installation of wet limestone
 injection  systems on a large number of relatively low B.t.u. capacity
 boilers.   Preliminary economic analysis of the process shows that unit
 costs  increase dramatically with the size of the boiler.  Indeed pre-
 liminary calculations have shown that a reasonable cutoff point is a
 boiler size of 200 megawatts or the equivalent in terms of millions of
 B.t.u. input.   Only  the few largest industrial boilers fall near this size
 range.  In addition, the large number of systems which would be required
 make this  alternative an unlikely choice for implementation by 1976.
      It finally  appeared that a choice involving a switch from coal and
 high-sulfur residual oil to low-sulfur oil is probably the only feasible
 control alternative  available with reasonable chance for implementation
 by 1976 for this  source.  The assumption here, of course, is that
 additional quantities of low-sulfur oil will become available in the near
 future.  It does  not appear too unreasonable that some easing of import
 restrictions on low sulfur oils or high sulfur oils allowing for desulfuriz-
 ing plants to be constructed in this country will occur and permit such
 an alternative to be implemented.  Of course, additional fuel costs on a
 B.t.u. basis will be involved.
 D.   Utility Steam-Electric Boilers
      There is  no question that until about the year 2000^' there will have
 to be an increasing reliance on the use of coal to supply our ever increas-
 ing power  requirements [Ref. 6].  To assume the "across the board" switch-
 -'   By that time  the use  of  nuclear  energy will equal the use of coal
 after which the requirement for  coal  will  start a downward trend.
                                   v-li

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ing of coal to low-sulfur residual oil without envisioning severe
shortages  of  such  fuels  for  other sources,  specifically  commercial-
institutional and  industrial boilers, and without  considering  that  such
a massive  fuel switch might  be  completely unfeasible, was unacceptable.
      It became fairly obvious that low-sulfur fuels, both oil  and gas,
are not presently  available  in  such large quantities and quite possibly
may be available to that extent.  Even considering that approximately
10 percent of the  available  coal could be desulfurized to about 1 per-
    3/
cent— , the resultant supply of low-sulfur  fuel will still not be
adequate.  Consideration of  the possibility of dramatically increased
imports of residual oils into this country  for power production is, at
present, not  consistent with stated policy  to avoid a substantial in-
crease in  the dependence of  U.  S. power producers on imported  residual
oil.  Therefore, it became apparent that use of several alternatives
would be required  to develop cost estimates of controlling steam-
electric boilers by 1976.
      Among the hardware alternatives, only  the wet and dry limestone
processes  are amenable to retrofitting.  Therefore, only these could be
considered for existing facilities.  The application of the various re-
covery processes for the control of coal and oil burning boilers to be
built by 1976 did  not seem to be an unreasonable alternative at this
time  for two  reasons.  First, expected availability of these processes
will  probably not  occur until 1974 or 1975 at the very earliest, and
second, the present and near future for marketing the various by-products
does  not seem to be especially bright.  Therefore,  recovery  processes
were  not considered further.  Of the two throwaway processes, the wet
limestone  process  appears to be clearly superior at present.
      In a  comparison of the  increase in annual costs of switching fuel
and the application of wet limestone scrubbing systems, it was found that
below a 200 megawatt plant operating at about a 17 percent load factor
a switch to a low-sulfur content fuel of the same type would be cheaper
[Ref. 7].  In addition, when analysis of available data showed that power
plants rated  less  than 200 megawatts consumed only 33.3 million tons of coal
3/
—    Even this level may not be adequate with many cities and states setting
limits of 0.5 percent or less.  Examples are New York City and the State of
New Jersey.
                                 V-12

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it was concluded that a fuel  switch  in these smaller  plants, while
assuming the application  of wet  limestone injection scrubbing process
for larger coal and oil burning  plants,  would represent  a  reasonable
choice of alternatives which  could possibly  be implementable by 1976.
After consultation with various  personnel within APCO, it  was finally
decided to employ this combination of  alternatives as the  cost estimating
methodology for this  report.

                            VII.  CONCLUSION

      On the basis of  current  information, an across-the-board switch to
low-sulfur fuels for  the  purpose of  sulfur dioxide abatement appears
unfeasible.  Fuel-switching  can  be realistically anticipated for the
residential, commercial-institutional  and industrial  sector, with the
exception of the steam-electric  utility industry.  For this industry,
stack gas scrubbing plus  some fuel substitution may be feasible.  By
1976, it  appears  that only the wet limestone scrubbing systems meet
the criteria of  commercial availability, economic reasonableness, and
adequate  removal  efficiency.   In the long run, pollution abatement in
 the steam-electric  industry will result from increased nuclear power
generation and from other technological developments  which may be available
 in the  period  of  the  1980's.
                                   V-13

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                           LIST OF REFERENCES
1.   The Cost of Clean Air.  Second Report of the Secretary of Health,
          Education, and Welfare to the Congress of the United States,
          1969.

2.   Impact of Air Pollution Regulations on Fuel Selection for Federal
          Facilities.  Washington, D.  C.:   National Academy of Science,
          National Research Center, May 7, 1969, p. 33; 61.

3.   Schreter, R. E., Poe, L. G., and Kuska, E.  M., "Industrial
          Burners Today and Tomorrow," Mechanical Engineering, June 1970.

4.   National Academy of Engineering,  "Abatement of Sulfur Oxide Emission
          from Stationary Sources."  Report of a study undertaken by the
          Committee on Air Quality Management for the National Academy
          of Engineers in execution of work with the Air Pollution Control
          Office, Washington, D. C., 1970.

5.   Private communication with the Oil Import Administration.

6.   "A Staff Report oh National Gas Supply and  Demand."  Federal Power
          Commission, Bureau of Natural Gas, Washington, D. C., September
          1969.

7.   John M. Dement, "Cost of Dolomite-Injection/Wet Scrubbing."  Unpub-
          lished report of the Air Pollution Control Office,  Raleigh,  N. C.,
          1970.
                                  V-14

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                  APPENDIX 3ZT

 IMPACT OF THE COST OF EMISSION
CONTROLS ON THE PRICE LEVEL OF
             THE US. ECONOMY

-------
                              Appendix VI
      Impact of the Cost of Emission  Controls  on  the  Price Level
                         of the U.  S.  Economy~~'
                          I.   INTRODUCTION

     The annual costs of air pollution  control  are estimated for each
of the 18 industrial process sources studied  (Appendix IV) and increases
in the prices of the output are projected  (See  Table 71-1).-  These pro-
jections are based on the structure of  each industry and the demand for
each industry's product.  Estimates are made  in this appendix of the
impact of the price increases on  the economy's  overall price level in
order to gain further insight as  to the effect  of air pollution control
on the standard of living, as reflected in the  level of prices.  This
appendix also examines separately the impact  of those price increases
on two industries, construction and automobiles, because they consume
significant portions of the output of industries studied and because
of their importance to the economy.
     In order to develop estimates of the impact of the costs of emission
control on the price level of the U. S. economy, it was assumed that the
price increases projected for the industries  studied will be passed along,
by all firms purchasing the output of these industries, to final purchasers
and that the pattern of inputs for any  purchasing industry will not be
affected.  It was assumed also that as  a result of the costs of emission
control, imports are not increased nor  is production outside the metro-
politan areas encouraged relative to the production of the firms inside
the metropolitan areas.  Finally, it was assumed that the distribution of
the gross national product  (GNP)  in Calendar Year 1975 will be similar to
the historical distribution.

       II.   IMPACT ON THE PRICE  LEVEL  FOR SPECIFIC INDUSTRIES

     Using input-output relationships,  it is possible to estimate the
impact of the projected subject industry price  increases on the general
level of prices and ori the price  level  of other industries.  Input-
output is a method for analyzing  the interdependence among the
& Because of the  large number  of  tables and figures in this appendix,
they have been put at  the  end for  ease in readxng of the text.
                                     VI-1

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industries or sectors of an economy.  Input-output analysis uses  a  table
or matrix which shows for a specific point in time the distribution
of sales and purchases by each industry.  In constructing an input-
output table, the output of each industry is divided into two categories:
(1) the interindustry transactions and  (2) the final demand sales.  The
total output of any industry can be represented by the following
equation:
          n
          Z X.. + C. = X. (i = 1 . . ., n),
where:
          X.. = amount of output industry ±
                sells to industry j,
          C. = final demand for output of industry i,
          X. = total output of industry i.
     At this point, the table consists of cells containing the dollar
value of the interindustry transactions (X..) or final demand sales (C.)
in each cell.  The table, however, is more useful when the transactions
are converted into a system of technical coefficients of production.  A
technical coefficient is the ratio of input to output and can be written
as follows:
               a
                ij    j
where:
          a.. = technical coefficient,
          X.. = amount of output of industry i purchased by industry j,
          X. = total output of industry j.
     For example, in the production of $40.031 billion of motor vehicles
and equipment in 1963, $3.453 billion of primary iron and steel was
directly consumed.  The technical coefficient expressing the direct
requirement for steel by the motor vehicle industry is therefore:
               3.453 = 0.0863.
              40.031
In other words, to produce $1.00 worth of output of motor vehicles
required about $0.09 worth of primary iron and steel.
                                VI-2

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     The final form into which  the  initial transactions matrix  can be
transformed shows both the  direct and indirect  inputs  from one  industry
to another.  For example, it was noted above  that  the motor vehicle
industry's direct requirement for steel is 0.0863.  However,  to build a
motor vehicle requires other inputs which, in turn, require steel as an
input.  The technical coefficient for the  rubber and miscellaneous
plastics products used by the motor vehicle industry is, for  example,
0.0223, but to produce rubber requires a direct input of steel
of 0.0051.  Coefficients which  represent both the  direct and  indirect
requirements are generated  by inverting the direct requirements matrix.
The resulting matrix shows  the  direct and  indirect output of  industry i
required for industry j  to  deliver  a  dollar's worth of output of final
demand.  In the case of  the motor vehicle  industry the direct and indirect
requirements for steel are  0.2121.
     Knowledge of the structure of  the American economy as represented
by the  direct requirements  and  the  total requirements  (direct and indirect)
coefficients may be used to evaluate  the impact of the projected increases
in the  prices of products of  the industries in  question.  This  can be done
because it identifies the industries  which purchase the affected products
and provides a basis for estimating the price increases necessary to
maintain profit levels.
     The U. S. Department of  Commerce has  published three input-output
tables  of  the U. S. economy.  The most recent table, for the year 1963,
was just released.  This table  was  expanded more than fourfold  from the
previous table  (1958) to about  370  separate industries which permitted
identification of most of the subject industries.  Table VI-2 compares
the identification of the subject industries, both by name and  standard
industrial classification  (SIC) number, with  the closest industry in the
input-output table.  In  most  cases  the industries  are the same.
     The 370 sector table was,  however, found to be too unwieldy in this
application so it was reduced from  computer tapes  of the table  to a smaller
table based on  the 1958  table's classification  of  industries.   However,
the integrity of the subject  industries was preserved.  What  resulted,
therefore, was a table which  shows  the industries  in detail and the
                             VI-3

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rest of the sectors in a more aggregated form,  finally, the onajor
purchasers of the output of the subject industries were identified as
the industries that consumed one percent or more of the intermediate
output of each of the subject industries.  There were 72 such industries.
The final input-output table is presented in Table VI-3.  Three ratios are
presented in each column.  The first is the portion of the output of
the subject industry purchased by the consuming industry.   The second
number is the technical coefficient—that is, the portion of the industry's
total inputs which comes from the subject industries.  The third is the
total requirements coefficient, reflecting the industry's direct and
indirect requirement for the output of the subject industry.
     Next, an estimate of the impact of the costs of emission control
on the price level of each of the 72 industries, which purchase one per-
cent of each subject industry's output, can be derived by using the
estimated price increase for each subject industry adjusted downward by
the percent of the industry not in the metropolitan areas, and the per-
cent the subject industry is of the input-output industry,- and .multiplying
it by the total requirements coefficient.  Table VI-4 shows the projected
increase in the price levels of the industries primarily affected by the
subject industries.  Due to problems in identifying the grain and
petroleum storage industries in the input-output table, these industries
are excluded.
     In order to estimate the impact of the projected price increases
on the general price level of the U. S. economy, each industry's contri-
bution to GNP was determined based on the distribution of final demand
presented in the 1963 input-output table.  The values are shown toward
the bottom of Table VI-4.  Finally, by multiplying the contribution of
each industry to GNP by the increase in the price level projected for the
industry and summing the results, an estimate of the impact on the
general level of prices is obtained.  The estimate is expressed in terms
of the increase in the implicit price deflator for gross national product,
an index similar to the consumer price index.  Table VI-5 shows the
estimated impact by major sector.
                               VI-4

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     The primary reason for the small price  increase is  that  only  nine
of the study industries are projected to  increase  their  prices  over  one
percent, and none of the increases exceed three  percent.   Of  these  nine
four have less than 55 percent of their capacity in  the  298 metropolitan
areas which further reduces the impact of the  price  increases.
     The industry most affected is construction, which accounts for  43
percent of the 0.14 percent increase.  The primary contributor  to the
increase in construction costs is the price  increase projected for steel.
Nine percent of the steel output is purchased  by the construction industry
where it accounts for two percent of the- construction industry's inputs.   Also
contributing to the projected increase in construction costs are price
increases by the gray iron foundries, steam-electric power plants and the
brick and tile industry.
     Manufacturing is expected to contribute 29 percent of the 0.14
percent increase,largely as a result of price  increases in the motor
vehicle industry due to higher prices for steel, gray iron castings and
 steam-electric  power;  other  transportation equipment industries due  to
 higher  steel  and gray  iron casting prices; and food  and  kindred products
 industries  due  to higher electric and  coal prices.
      Transportation, communication,  electric,  gas  and sanitary services
 price increases  contribute 21 percent of  the projected 0.14 percent  price
 increase  as a result of  higher  electric and  coal prices.
      Services account  for the smallest portion of  the 0.14 percent
 increase  -  7  percent,  due to higher  electricity  prices.

                       III.   KEY INDUSTRIES

      Due  to the  interdependence of the economy and the specific inter-
relationships between  the APCO  industries and  other  industries
as shown, for  example, in  the input-output  table,  the  effects of the
projected price  increases tend  to cluster in a few industries.  Two  of
these industries, construction and motor  vehicles, have been singled
                                  VI-5

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out for analysis because of their significance.  These two
industries consume large percentages of the output of several of the
industries studied and are important contributors to the level of GNP.
A.   Construction
     1,   Study Industries Affected
          The following of the industries studied sell over one percent
     of their intermediate output directly to the construction industry:
               Paints and allied                               49%
               Petroleum refining related products              7%
               Paving mixtures and blocks                      90%
               Tires and inner tubes                            4%
               Cement, hydraulic                               42%
               Brick and structural clay tile                  97%
               Lime                                            10%
               Blast furnaces and steel products               10%
               Electric utilities                               2%
     2.   Review of Industry
          The value of new construction put in place in 1969 was a
     record $91 billion, even though new housing units started,  which
     are a major component of construction activity, were less than 1.5
     million units for the year (see Figures VI-1 and VI-2).  Both the
     trend toward larger structures and the general increases in the cost
     of new construction caused by inflation contributed to the record level.
          The construction industry is currently characterized by rising
     costs and  a strong  underlying demand held in check by  the cost of
     credit.
     3.    Privately Owned Construction
          This  component of construction activity consists  of residential
     and nonresidential building  construction.   Private.construction
     represents about  70 percent of the value of new construction and
     98 percent of  the new housing units started.
           Residential construction activity is  primarily influenced by
     credit conditions,  the existing  supply of dwellings, and  the formation
     of households.
                                  VI-6

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      There appears  to  be a strong underlying demand for residential
construction that has recently been dampened by the rise in interest
rates.  Between 1963 and 1969 interest rates on conventional first
mortgage loans rose  31  percent (see Figure ^3).  During this period,
even though the annual  increase in households averaged  about 880,000
per year, the rate of private housing starts fell over  100,000  (see
Figure  VI-1).
      The rise in interest rates is expected to taper off in the
seventies, though most  analysts do not expect any significant decline
in them.  The number of households is expected to increase at about
1 million per year in  the seventies (see Figure VI-4).   The result will
be a requirement for the construction or rehabilitation of 26 million
housing units within the next decade according to the Housing and Urban
Development Act of 1968.
      It appears, therefore, that the anticipated stabilization of
interest rates, the  expected increase in households,  the high demoli-
tion rates of the 1960's, and the current low vacancy rates  will provide
a strong underlying  demand for residential construction in the seventies.
However, the outlook is dimmed somewhat by the inflation expected in
materials, labor, and  land.  This situation is expected to increase
the demand for  lower cost housing, thereby strengthening the trend
toward  multi-unit construction and mobile homes.   Attempts will be
made  to improve productivity in order to reduce price trends by using
industrialized methods  and less on-site labor.
 4.    Publicly Owned Construction
      Public construction consists of:  housing and redevelopment,
 industrial,  educational and other public buildings; highways and
 streets; military facilities; conservation and development; and
 other public construction.  The demand for publicly owned construc-
 tion is not expected to be  as strong as residential building pri-
marily due to the tapering  off of demand for additional educational
buildings and the leveling  off of the interstate highway program.
 The strongest components of public construction are expected to be
 at the state and local  levels especially for sewer systems and water
 supply facilities.   There is, however, a backlog of federal military
projects deferred in the late 1960's.
                               VI-7

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5.   Price Trends
     Since 1960, construction has contributed disproportionately to
rising prices as shown in Figure VI-5.  For example, between I960
and 1969 the implicit price deflator for GNP increased at an annual
rate of 2.2 percent.  The implicit price deflator for structures
increased at an annual rate of 3.2 percent during the same period.
     Rising financing and land costs have been the primary sources
of the cost increase although the cost of labor has also increased,
stimulating the search for alternatives to on-site labor where labor
is less productive  (see Table "VI-6) .
It appears that rising prices will  continue  in the construction
industry  during the 1970's,  due  not only  to  the inflation expected
in the  economy but  also to the lack of productivity  improvements  in
the  construction.   It is  anticipated, therefore,  that these  conditions
will stimulate  the  search for substitutes  for any significant input
to construction whose prices are rising faster than  the general
increases for all inputs.
6.    Forecast of Construction Activity
      The  share  of gross national product  (GNP) represented by con-
struction has been  declining since  the mid 1950's, when it was about
12 percent to about 10 percent in 1967.   Through  the 1970's, construc-
tion is expected to maintain its share of GNP at  about the present
                  21
10 percent level. —'
      As Table VI-7  shows, the construction industry  is expected  to
increase  to  $138.5  billion by 1975  without allowing  for the  impact
of emission  standards.  However, a  substantial portion of this
increase  ($31 billion) is expected  to be  in  the  form of price increases.
 I/
     U.S. Department of Commerce, Construction Review, Vol. 15, No.  7,
 (July 1969), p. 13.
                             VI-8

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7.   Price Impact
     Using input-output  analysis,  it was  estimated  that the
price level in  construction will be about 0.6  percent higher
annually than otherwise  due to  price increases caused by the extra
costs to the study  industries for  emission control.  While the
percentage increase is small, in dollar terms, the amount is fairly
large—$600 million in 1975.  Assuming approximately 25 percent of this
increase was allocated to  1.5 million housing  units started in
calendar year 1975,  the  average increase  per housing unit would
be $100.
Motor Vehicles
!•   Study Industries Affected
     The following  study industriea sell  one percent or more of
their intermediate  output  directly  to the motor vehicle industry:
          Petroleum refining and related  products     6%
          Tires and inner  tubes                     24%
          Blast furnaces and steel  products          11%
          Primary  lead                                1%
          Electric utilities                          1%
           Iron  and steel foundries                   25%

2.   Review of  Industry
     Motor vehicle production, with a combined output of all types
of motor vehicles of about  ten million vehicles annually currently
accounts for about  four percent of gross national product (GNP).
This industry has a pervasive influence on the U. S. economy not
only due to its share of GNP but also because of its linkages with
the rest of the economy.
     Figures VI-7 through VI-9 show the production and registration
history of motor vehicles.
3.   Automobiles
     Passenger  car  production accounts for about 80 percent of  both
the value of all new motor  vehicles sold  and the number of units
manufactured.   Automobile production  is related to the level of
disposable income,  the requirement  for replacement automobiles, the
increase in households,  and other factors not  easily quantified.
                             ¥1-9

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     As Figure VI-10 shows there has been a fairly stable relation-
ship between disposable income and personal consumption expenditures
on new automobiles, averaging about five percent over the last 20
years.  In recent years, however, the demand for new automobiles
appears to be slackening somewhat although the reasons for the slow-
down in the sales rate are not yet discernible.
     The requirement for replacement automobiles is related to the
average life of a passenger car.  About eleven years is the average
life of a passenger car.
     In addition to the requirement for replacement vehicles, there
are additions to the number of passenger cars registered.  The primary
sources of these additions are the increase in households and the
increase in the number of families owning two or more automobiles
(see Table Vl-8) .
     The result has been a fairly steady increase in b.oth the number
of automobiles per household and per capita as shown in Figure .^I-rll,
4.   Trucks and Buses
     The number of truck and bus sales, after remaining fairly con-
stant between the end of World War II and 1962, have been increasing
at the rate of over seven percent per year since 1962.  The value of
sales has increased even faster than the number of sales due to the
increases in sales of light and heavy-duty trucks (see Table VI-9).
5.   Price Trends
     Measured by the Consumer Price Index, the prices of new cars
have been virtually constant since 1958 (see Figure VI-12).  This index
measures the changes in the prices of new cars of a fairly fixed
specification and product mix.  The actual average price per unit
has, however, been increasing steadily due to acceptance of new
equipment (e.g., air conditioning) by the customer and a shift in
demand toward more expensive body styles.  It appears that this upward
trend in prices may be somewhat offset by the introduction of domestic
compacts to compete with small imported vehicles.
                                VI-10

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6.   Forecast of Motor Vehicle Production
     Gross auto product as a percent of GNP and personal consumption
expenditures for automobiles as a percent of disposable personal
income have both been fairly constant over the last twenty years
as was shown in Figure VI-10.  Assuming that these historical rela-
tionships continue  to 1975, the gross auto production at that time
will be about  $44.2 billion.   (See Table VI-10 for the industry
projections.)
7.   Price  Impact
     The  increase  in the  price level of the motor vehicle industry
was  estimated  at 0.5 percent.  If  10 million cars and trucks are
produced,  this percentage translates into an absolute dollar amount
in 1975 of  $225 million—a cost per vehicle of $22.50.
                               VI-H

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                                               TABLE VI-1.- PROJECTED PRICE INCREASES
Industry Unit Price Price and Percent Capacity
Percentage Increase in Metropolitan Area
Grain milling & handling
Elemental phosphorus
Phosphate fertilizer
Varnish
Petroleum refining
Asphalt batching
Rubber tires & tubes
Cement
Brick and tile
Lime
Steel
Primary copper
Primary lead
Primary zinc
Primary aluminum
Secondary nonferrous metals
Steam-electric
Kraft (sulfate) pulp
Gray iron foundries
Coal cleaning

$350.00/ton
$160.00/ton
$ 3.33/gal.
negligible
$ 6.00/ton

negligible
$ 40.00/thousand
negligible
$170.00/ton
$ .3823/lb.
$ .1410/ Ib.
$ .1384/lb.
$ .2498/lb.
$ -.2733/lb.
$ ,015/KWH
$122.50/ton
$189.00/ton
$ 4.40/ton
negl
$7.80/ton
$1.00/ton
$0.05

$.075/ton
negl

$1.05/thousan

$1.33/ton
$.012/lb.
negl
$.003/lb.
negl
$.001/ Ib.
$.0003/KWH
$1.26/ton
$4.91/ton
$0.05/ton
.gible
2.23%
0.63%
1.50%

1.25%
.gible

i 2.63%

0.78%
3.14%
Lgible
2.17%
.gible
0.37%
2.00%
1.03%
2.60%
1,14%
86.30
44.00
88.00
98.20
85.90
83.40
92.60
76.70
71.60
67.60
97.60
69.00
71.50
52.90
56.60
72.80
54.30
70.10
82.40
37.60
<
H


NJ

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                          TABLE VI-2.  COMPARISON OF APCO AND INPUT-OUTPUT INDUSTRY IDENTIFICATION
K-»
LO
      APCO Industry

1.  Grain milling and handling
2.  Elemental phosphorus

3.  Phosphate fertilizer
4.  Varnish
5.  Petroleum refining
6.  Asphalt  batching
7.  Rubber (tires  and inner tubes)
8.  Cement
 9.  Brick and  tile
10.  Lime
11.   Iron and steel
12.   Erimary copper
13.   Primary lead
14.   Primary zinc
15.   Primary aluminum reduction
16.   Secondary nonferrous metallurgical
17.   Steam electric power plants
18.   Kraft (sulfate) pulp
19.  Grey iron foundry
20.   Coal cleaning
21.  Petroleum products storage
                                                 SIC NO.
2042
2819958
2819959
2871

2911
2951
3011
3241
3251
3274
3312
3331
3332
3333
3334
3341
4911
2611
3321
1211
5092
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
                 Input-Output Model Industry

1.  Prepared feeds for animals and fowls
2.  Elemental phosphorus

    Phosphate fertilizer
    Paints and allied products
    Petroleum refining and related products
    Paving mixtures and blocks
    Tires and inner tubes
    Cement, hydraulic
    Brick and structural clay tile
    Lime
    Blast furnaces and basic steel products
    Primary copper
    Primary lead
    Primary zinc
    Primary aluminum
    Secondary nonferrous metals
    Electric utilities
    Pulp mills
    Iron and steel foundries
    Coal mining
    Not identified
SIC NO.
  2042
   281 except
 28195
  2871, 2872
  2851
  2911, 299
  2951
  3011
  3241
  3251
  3274
   331
  3331
  3332
  3333
  3334
  3341
  491,  pt.  493
  2611
   332
  11,  12

-------
                         TABLE VI-3. - SELECTED COMPONENTS OF THE INPUT-OUTPUT TABLE OF THE U.  S.  ECONOMY
 1
- 2
 3
 4
 5
 6
 7
 8
 9
10
11
12
13
14
15
16
17
18
19
20














INDUSTRY
prepared feeds for animals & fowls 	




paints & allied products
petroleum refining & related products 	
paving mixtures & blocks


cement , hydraulic
brick & structural clay tile


blast furnaces & basic steel products
primary copper
primary lead
primary zinc
primary aluminum
secondary nonferrous metals
electric utilities
pulp mills
iron & steel foundries
















0
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1.1878
    Code:  0 - Portion of the output of the industries in rows 1-20 sold to industries in columns 1-72.
           D - Share of total inputs of each industry in a column provided by the industry in a row—direct require-
               ments coefficient .
           T - Output required directly and indirectly, from each industry in a row for each dollar of delivery  to
               final demand for industry named at the head of the column—total requirements coefficient.
    Source:  U. S. Department of Commerce, Office of Business Economics.

-------
                       TABLE VI-3. - SELECTED COMPONENTS OF THE INPUT-OUTPUT TABLE OF THE U. S. ECONOMY  (continued)
I
H-
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1-
2-
3-
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-------
                      TABLE VI-3. - SELECTED COMPONENTS OF THE INPUT-OUTPUT TABLE OF THE U. S. ECONOMY  (continued)
M






1 	
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A — ... —


6 -
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-------
TABLE VI-3. - SELECTED COMPONENTS  OF THE  INPUT-OUTPUT TABLE OF THE U.  S. ECONOMY  (continued)
,,<
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1
2
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-------
                      TABLE VI-3. -  SELECTED COMPONENTS OF THE INPUT-OUTPUT TABLE OF THE U. S. ECONOMY  (continued)
M
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-------
                       TABLE  VI-3.  -  SELECTED  COMPONENTS  OF THE  INPUT-OUTPUT  TABLE  OF  THE  U.  S.  ECONOMY (continued)
M
 I
M
VO
 1
 2
 3
 4
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 6
 7
 8
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10
11
12
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16
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-------
TABLE VI-3. - SELECTED COMPONENTS OF THE INPUT-OUTPUT TABLE OF THE U.  S.  ECONOMY (continued)














M 1 -
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-------
TABLE VI-3. - SELECTED COMPONENTS  OF  THE  INPUT-OUTPUT TABLE OF THE U. S. ECONOMY  (continued)
















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-------
TABLE VI-3. - SELECTED COMPONENTS  OF THE  INPUT-OUTPUT TABLE OF THE U. S. ECONOMY  (continued)









2 -
3 -
4 	
5 -
6 -
7 -
8 -
9 -
10 -
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-------
TABLE VI-3. - SELECTED COMPONENTS OF THE INPUT-OUTPUT  TABLE OF  THE  U.  S.  ECONOMY (continued)








3 1 -
1 2 -
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-------
                       TABLE VI-3.  -  SELECTED  COMPONENTS OF THE  INPUT-OUTPUT TABLE OF THE U. S. ECONOMY  (continued)
 I
K>
       1
       2
       3
       4
       5
       6
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-------
                       TABLE VI-3. - SELECTED COMPONENTS OF THE INPUT-OUTPUT TABLE OF THE U.  S.  ECONOMY (continued)
Oi

















1 -
2 - —
3 -
4 	 	
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-------
                      TABLE VI-3. - SELECTED COMPONENTS OF THE INPUT-OUTPUT TABLE OF THE U. S. ECONOMY  (continued)
H
CT>
  1
  2
  3
  4
  5
  6
  7
  8
  9
10
11
12
13
14
15
16
17
18
19
20











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— — —
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-------
TABLE VI-3.  - SELECTED COMPONENTS OF THE  INPUT-OUTPUT TABLE OF THE U. S. ECONOMY  (continued)












3
1
S 1 -
2 	
3 	
4 	 _
5 	 	
6 -
7.
8 	
9 -
10 -
11 -
12 -
13 -
14 -
15 -
16 -
17 	
18 -
19 -
20 -






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rH 0)
•rH O
rQ -rl
i s
O (U
•U ca
< ta
68.
0




-.0314
.0111

. Io75












0




.0068
.Ollu

.0178












T




.uu87
.0196

.0204













-------
                       TABLE VI-3.  - SELECTED COMPONENTS OF THE INPUT-OUTPUT TABLE OF THE U. S. ECONOMY  (continued)
I
NJ
00
 1
 2
 3
 4
 5
 6
 7
 8
 9
10
11
12
13
14
15
16
17
18
19
20

























. — .




























0
-.0169

















CO
4.1
fi
cu


CO



69.
D
.0028




























T
.0065




























0

- .0136
— .0808








<•£!

1 CO
cd cu
0 0
3 -H

CU S-l
cu
•> CO •
H i
cd H
o cd
•H fl
^ o
CU -H
s w
70.
D

.OuOO
.0203


CO
C
0
H

id
N
H
«
cd
00
VJ
o

u
H
t-l
O
t-l
a.
c
0
fl

T

.0562
.1446 -


























0



nii ft
. UJ10





•U
a
CU

2
M
cu
> CO
0 CU
e>o co
•H
I— 1 M

tH a
rt cu
o
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CU
13 €
Q
cu t-i
4J CU
cd >
4J 0
CO 60
72.
D


.0713
/\ n I *5
.0112
























T

( \ i \ O O
. 00 Jo
.3119
• . —» f f
.0766

-------
                                           TABLE VI-4. - PRICE EFFECTS OF THE COSTS OF EMISSION  CONTROL
I
NJ


















1
2'
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20


.





Each entry represents
the increase in
the price level
of the industries

purchasing at least
one percent of the
output of the NAPCA
industries as a re-
sult of the costs
of emission control

INDUSTRY
- prepared feeds for animals & fowls
- elemental phosphorus
- phosphate fertilizer
- paints & allied products
- petroleum refining & related products
- paving mixtures & blocks
- tires & inner tubes
- cement, hydraulic
- brick & structural clay tile
- lime
- blast furnaces & basic steel products
- primary copper
- primary lead
- primary zinc
- primary aluminum
- secondary nonferrous metals
- electric utilities
- pulp mills
- iron & steel foundries
- coal mining
TOTAL INCREASE IN PRICE LEVEL
CONTRIBUTION TO GNP
IMPACT ON IMPLICIT PRICE DEFLATOR FOR GNP
Oil
rH C
1 as -H
> 3 S to -H
•H CO 4J 3 Cd £3
rH 4J iH 0) M
CJ 3 rH ^>
>£3 cj oc o rH cd M
^4 O M lH 4J M CJ -rl
O M OC'CO £ i
Oft « 4J -H O.tJ <£ M
4J O3 Cd V4
CO^ M3 OJC CUcd
d)O CUT) rH T3 C3
>O .GO cd 3T3 OCT
•rl4J 4JM O V4C2 4-1
hJco Oo. u ocd cn<«



1. 2. 3. 4. 5.


.0000
.0007


.0000










.0001


.0051
— .0007 .0051 .0001 .0000
.0037 .0108 .0009 .0000 .0002
— .0000 .0000 .0000 .0000


G
o
•H
tj
Q

4J
to

o
CJ
OJ
S3



6.






.0000


.0003

.0035





.0007

.0008

.0053
.1110
.0006
c
o
•H
O
3
** U
IS CO
u c
C 0
cd u
a

4J -H
c cd
iH P.
cd 
-------
                                          TABLE VI-4.  - PRICE EFFECTS OF THE COSTS  OF EMISSION CONTROL (continued)
H

1 «
2 -
3 -
4 -
5 -
6 -
7 -
8 -
9 -
10 -
11 -
12 -
13 -
14 -
15 -
16 -
17 -
18 -
19 -
20 -
TOTAL INCREASE IN PRICE LEVEL
CONTRIBUTION TO GNP
IMPACT ON IMPLICIT PRICE DEFLATOR FOR GNP
U)
.u
u co
3 "V
T3 Q) CO
O (U i-l
M M U_i 3
o ex o
U-l CO T3 m
iH T> cu
T3 S CU M v8
CU O M rt
co co u-i tj ex co
># 
-------
                                         TABLE VI-4.  -  PRICE  EFFECTS OF THE COSTS OF EMISSION CONTROL  (continued)
M



CO


















1 -
2 -
3 -
4 -
5 -
6 -
7 -
8 -
9 -
10 -
11 -
12 -
13 -
14 -
15 -
16 -
17 -
18 -
19 -
20 -
TOTAL INCREASE IN PRICE LEVEL
CONTRIBUTION TO GNP
IMPACT ON IMPLICIT PRICE DEFLATOR FOR GNP


 ^
0)0) M
•H O «4J rH
rH X rH
0) rH 0) to -rl
rH CD VI 6
rH tO 0)
•H <4 4J C CX
S O 1-1 rH
rl 3 ffl 3
CX, 4) T3 4J O.
iH P. O (3 »-*
3 (0 M O

15. 16..

.0000














.0015
.0039
.0003
— .0057
.0003 .0029
— .0000
oo
•H
fi
to
•H

1


fcd

00
C
•H
4-1
a
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rl
a.
17.

.0000

















.0000
.0068
.0000
o
•rl 10
C rH
a) (d
00 U

O £3
•H JC
U
i-l
to u
•H iH
£ §
3 ff
•a o
d
M og
18.

.0001
.0000







.0002

.0001
.0000

.0000
.0003

.0003
.0010
.0035
.0000








ID
M
a)
N
Tt
rH
tH
4J
14
(0

19.

.0000
.0041
















.0041
.0003
.0000
•a
v

u to
a) 4-1
rH O
at 3 at
0) *T3 rH
o

D.
to oo
rH rH rH
n) n)
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u a a)
20.

.0001
.0002
















.0003
.0012
.0000

u
•H
4-1
(U
Si
4J 
-------
                                          TABLE VI-4. - PRICE EFFECTS OF THE COSTS OF EMISSION CONTROL  (continued)
3
U)
to

1 -
2 -
3 -
4 -
5 -
6 -
7 -
8 -
9 -
10 -
11 -
12 -
13 -
14 -
15 -
16 -
17 -
18 -
19 -
20 -
TOTAL INCREASE IN PRICE LEVEL
CONTRIBUTION TO GNP
IMPACT ON IMPLICIT PRICE DEFLATOR FOR GNP
^ Drugs, cleaning &
|° toilet preparations
.0000
.0001
.0001
.0108
.0000
^ Paints & allied
^> products
.0000
.0001
.0001
.0002
.0000
^ Petroleum refining
f & related products
.0000
.0002
.0002
.0171
.0000
^ Paving mixtures
y & blocks
.0106
.0106
.0000
.0000
J£ Rubber footwear
•
.0000
.0000
.0021
.0000
£j Glass & glass
* products
M Cement, hydraulic
00
.0000
.0000 .0000
.0008 .0010
.0000 .0000

-------
                                        TABLE VI-4. - PRICE EFFECTS OF THE COSTS OF EMISSION CONTROL  (continued)
 I
CO
to




















1 -
2 -
3 -
4 -
5 -
6 -
7 -
8 -
9 -
10 -
11 -
12 -
13 -
14 -
15 -
16 -
17 -
18 -
19 -
20 -
TOTAL INCREASE IN PRICE LEVEL
CONTRIBUTION TO GNP
IMPACT ON IMPLICIT PRICE DEFLATOR FOR GNP


•t
Jj Q)
c e
\ 01 i-l
o a -H
h Q)
cu o *#

^* 4-1 **
cd tx a)
•H <1) rH
O O -H
X 4J
"* * .
01 CO ^
a <•> o
O O i-t
•U 3 Vi
w T) ,£>
29.





.0002


.0008










.0010
.0001
.0000


CO
4J
O
rj
o
CO M
CU (X
U
CO rH
C 01
rl 01
3 -W
M-l CO
4J O
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r-l CO
30.

.0000








.0087

.0001

.0000
.0003

.0003
.0002
.0096
.0010
.0000
CO
01
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•o
c
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,-1
01
01
4J
en
««

C
o
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31.










.0014








.0014
.0001
.0000


rH 4-J
01 o.
01 01
4-1 U
CO X
CU

DO 01
C C3 O*
O i-l IX
(-1 M O
•H 3 0
4J
>> 0 r-l >,
n co n »-i
CO M-l Ct)
a 3 •« s
•H C -H
l-i cd O >-t
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32. 33.










.0042
.0052
.0001

.0001




.0042 .0054
.0000
.0000









•o o
CO C
(U i-l
rH N

& £r
<0 CO
6 g
•H -3
M l-i
Pi OH
34. 35.












.0063 .0003
.0012 .0117

.0004 .0001




.0079 .0121


-------
                                                                                                      (continued)
 I
Co






















1 -
2 -
3 -
4 -
5 -
6 -
7 -
8 -
9 -
10 -
11 -
12 -
13 -
14 -
15 -
16 -
17 -
18 -
19 -
_2CL = 	 — — — — 	
TOTAL INCREASE IN PRICE LEVEL
CONTRIBUTION TO GNP
IMPACT ON IMPLICIT PRICE DEFLATOR FOR GNP








g
5
d i 01
•rl (3 iH
E on)
3 a w
i-H OJ
td £,s
& -33
cd CO
3 0 M
•H OH
H 0) 01
IXi CO M-l
36. 37.












.0002
.0003

.0001 .0007
.0009


.0010 .0012








n
IT1
ro

01 « •
t-H 00 <•
1 td a n
C 4-1 -i-i
O 0) V4 •
(3 B 3 CO
4J CO
>, to o
M 3 cfl U
a) o m a
e H 3  4J >J
00 a) ex
13 0
•H 1-1 r-l
4-1 1-1 «
(B fk 4J
a) a) a)
BS >w B
40.










.0174
.0009






.0018
.0201
.0017
.0000
u 	
0)
• e
Cfl
4-1 -a
0 C
3 H)
•o
0 •
P O
O. 4-1 to
0) t>0
ai c
d « -H
•H CO CX
J3 4J B
O 3 W
« G 4-1
0 . W
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0) 4J tfl
VJ t-H W
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41.










.0039


.0001





.0040
.0007
.0000








13
0)
4J y>
ta 4J
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JD O
tO M
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^i iH
(U a)
J3 4-1
4J (1)
o e
42.










.0147
.0006
.0007
.0009




.0024
.0093
.0021
.0000

-------
                                        TABLE VI-4. - PRICE EFFECTS OF THE COSTS OF EMISSION CONTROL  (continued)
I
Co




















1 -
2 -
3 -
4 -
5 -
6 -
7 -
8 -
9 -
10 -
11 -
12 -
13 -
14 -
15 -
16 -
17 -
18 -
19 -
20 -
TOTAL INCREASE IN PRICE LEVEL
CONTRIBUTIONS TO GNP
IMPACT ON IMPLICIT PRICE DEFLATOR FOR GNP




to
Ol
p
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M
3
H

*-3

01
0)
C
•rl
M)
a
43.


















.0016

.0016
.0017
.0000








^
M
01
c
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43
(J
s

g

44.










.0013







.0006

.0019
.0038
.0000


^
t>0 >%
(3 h
•H Ol
C C
•H -rl
6 43
O
13 cd
o B
•H
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0 iH C
20) Ol
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4-1 M-l (1,
CO -H
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45.










.0034







.0026

.0060
.0049
.0000

^j
c
01
W) 6
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•rl -rl
rH 3
T3 CT
P Ol
0)
43 *^l

10 >-,
i-H M
cfl 01
•H G
M -H
0) 43
•M (J
td cd
a 6
46.


















.0020

.0020
.0014
.0000
M
Ol
c
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43
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cd
e

00 -U
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47.










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.0001





.0022

.0055
.0040
.0000

4J
C
cu
a
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>^ "H
l-i 3
4J Q*
CD Ol
3
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(3
•H ^
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•-I 0)
cd c
•H -H
0 43
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48.










.0051







.0034

.0085
.0045
.0000

4-1
C
01
e
O.
&-j *rH
M 3
u cr
CO 01
3
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C
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^
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M -rl
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C O
01 cd
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49.










.0062

.0001





.0046

.0109
.0035
.0000

-------
                                           TABLE VI-4.  -  PRICE  EFFECTS  OF  THE COSTS OF  EMISSION  CONTROL  (continued)
 I
CO

















1 -
2 -
3 -
4 -
5 -
6 -
7 -
8 -
9 -
10 -
11 -
12 -
13 -
14 -
15 -
16 -
17 -
18 -
19 -
20 -
TOTAL INCREASE IN PRICE LEVEL
CONTRIBUTION TO GNP
IMPACT ON IMPLICIT PRICE DEFLATOR FOR GNP

••a
• i
X -H 4-1 CO •
M I M C 3 CO
4J M 4-1 CD 13 3
co C3 co 6 C 4J
O. 3co H ft ft. -H ed
O TJ 0) (J "O -H VJ
•° m c G w , El "3 5 ~ °?
co 4J t— 1 »H xJCTroca* ™ 0>
O J3 O 0> O d. .-1 O
0)3 0)O -H cS -H n) o fi
C T3 Old rlOGM *C 03
•HO -H S 4J -H O 4J i— 1 0) -rl
J3M > OCO-HOCBcOi— 1
(J FM M 0)CQ4JCU-H3a.
td 0} i-H -H 3 «H M O fti
S cn w B j3 a) 4-1 w rt
50. 51. 52. 53.










.0054 .0060







.0005 .0016 .0009

.0005 .0016 .0063 .0060
.0002 .0031 .0046 .0056
.0000 .0000 .0000 .0000
CO
O -H
1) • r— 1
•H ;>> a.
0) M ft.
0) 3
ca C co
3 -H
O ,13 ^3
0) o
d n) 4_)
n) E C
i— 1 0)
•H <~t 6
q\ nj p.
0 0 -H
CO -H 3
•H i-i cr
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tH C
O 0)
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01 ft
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a*
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4-1
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55.










.0035

.0000



.0005

.0011

.0051
.0413
.0002









<#
4-1 CO
U-l 4-1
CD w
V^ CO
O Pu
•H
"^
56.


















.0006

.0006
.0156
.0000

-------
                                       TABLE VI-4.  - PRICE EFFECTS  OF THE  COSTS OF  EMISSION CONTROL  (continued)
s




















1 -
2 -
3 -
4 -
5 -
6 -
7 -
8 -
9 -
10 -
11 -
12 -
13 -
14 -
15 -
16 -
17 -
18 -
19 -
20 -
TOTAL INCREASE IN PRICE LEVEL
CONTRIBUTION TO GNP
IMPACT ON IMPLICIT PRICE DEFLATOR FOR GNP
CO
CU
•H
CJ r-t
•H p,
E O™
-H 0 3
CO -H CO

4J d, 13 CO 00
i .c to e 3 c
CO p. M 10 O i-l
C o 60  -H
O CU 4-1
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0) U
4J -H
CO >
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0)
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CO
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to
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M n)
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cu -a
r-t a
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62.
















.0124


.0003
.0127
.0212
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i— i
•H
CO
4-1
CU
p^
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CU ctj
«H >J
CO &H
CO
CU
1— 1
o

63.


.0000












.0000
.0003



.0003
.1500
.0000

-------
                                        TABLE VI-4.  - PRICE EFFECTS OF THE COSTS OF EMISSION CONTROL  (continued)
I
OJ
oo




















1 -
2 -
3 -
4 -
5 -
6 -
7 -
8 -
9 -
10 -
11 -
12 -
13 -
14 -
15 -
16 -
17 -
18 -
19 -
20 -
TOTAL INCREASE IN PRICE LEVEL
CONTRIBUTION TO GNP
IMPACT ON IMPLICIT PRICE DEFLATOR FOR GNP



r-i co cu co M
t>0 CO CD rH CU -i-l
c a  O > CU 0)
T3 }-i V-4 fa J-l PS CJ
CD OCUCUOi-lCU -H
4J i-H P, (0 4J 
c3 CU cfl 3 rt i-l M
O 4JrH idMtOfXCO 'H CU
CUC ton) •••HCUlO J3C/2
On) W 4-1 COIOCO-UMCU O
CM B .-H!l>P.a.C B "3
(03 iHCU  0) M
CU •—) CU O
g rt cj
0) O -H
CO -H >
3 T3 M
g CU CU
<2 g C/3
69. 70.
















.0016



— .0016
.0100 .0619
— .0001

-------
                                           TABLE VI-4. - PRICE EFFECTS OF THE COSTS OF EMISSION CONTROL (continued)
<3
H


VD
r- • 	 - " '
i -
2 -
3 -
4 -
5 -
6 -
7 -
8 -
9 -
10 -
11 -
12 -
13 -
14 -
15 -
16 -
17 -
18 -
19 -
20 -
TOTAL INCREASE IN PRICE LEVEL
CONTRIBUTION TO GNP
IMPACT ON IMPLICIT PRICE DEFLATOR FOR GNP
u
 VI 0(0
Op. O -U 0>
OH iJ C W
01 <0 -rt
iH J-l c3 S M
CS C CO,
M W 0) M >J
0) 4J tt) 4)
01 4J O C
PCI WOW
71. 72.
.0034
.0008 .0003
TOTAL
.0008 .0037
.0022 .0015
.0000 .0000 0014

-------
  TABLE VI-5. - ESTIMATED IMPACT OF THE COSTS OF EMISSION CONTROL
                          ON THE PRICE LEVEL
              Industry
Estimated Increase in the
      Price Level*	
Agriculture, Forestry and Fisheries
Mining
Construction
Manufacturing
Transportation, Communication,
  Electric, Gas and Sanitary Services
Wholesale and Retail Trade
Finance, Insurance and Real Estate
Services
Government Enterprises
         0.0000
         0.0000
         0.0006
         0.0004

         0.0003
         0.0000
         0.0000
         0.0001
         0.0000
                                   Total
         0.0014 or 0.14%
  Implicit price deflator for GNP.
             TABLE  VI-6.  -  DISTRIBUTION OF CONSTRUCTION  COST


On-Site Labor
Materials
Land
Overhead and Profit
Financing
Percent of Cost
1949
33
36
11
15
5
1969
18
38
21
13
10
     Source:  U.  S.  Department  of Labor, Monthly Labor Review. Vol.  93,
             No.  7  (July  1970), p.  27.
                                  VI-40

-------
             TABLE VI-7. - ACTUAL AND PROJECTED CONSTRUCTION ACTIVITY
                               (Billions  of Dollars)
                              Actual

                          Current Dollars
                     1960   1965    1967   1969
               Projected
                           Constant
      Current Dollars   (1967 Dollars)
      1975     1980     1975     1980
 GNP                 503.7  684.9  793.9   932.4
 Total Value of
   New Construction   33.9   72.3   76.2   90.9
   1,366.6  1,920.1  1,105.7  1,384.3
     138.5    199.3    107.4    131.5
Source:  U. S. Department of Commerce, Construction Review, Vol. 15, No. 7  (July 1969),
        p. 13.
                           TABLE
                                       T. AUTOMOBILE OWNERSHIP
                     1950
                     1955
                     1960
                     1964
                     1965
                     1966
                     1967
                     1968
                                     Percent of Families Owning
                                       Two or More Automobiles
 7
10
15
22
24
25
25
26
                     Source:  The University of Michigan, Survey
                              Research Center, Ann Arbor, Michigan;
                              "Survey of Consumer Finances."
                                       VI-41

-------
TABLE VI-9. - TRUCK AND BUS CHASSIS FACTORY SALES
                 (in thousands of units)
Gross Vehicle
Weight
6000 Ibs. & less
6001 to 10,000 Ibs.
10,001 to 14,000 Ibs.
14,001 to 16,000 Ibs.
16,001 to 19,500 Ibs.
19,501 to 26,000 Ibs.
26,001 to 33,000 Ibs.
Over 33,000 Ibs.
Total
*
Estimated.
1961
647
180
11
30
139
65
29
32
1,133

Source: Census of
1962
678
213
9
27
142
93
35
43
1,240

1963
836
247
6
28
145
110
32
59
1,463

Manufactures
1964
920
250
6
24
142
104
30
64
1,540

1965
1,058
294
5
26
144
110
40
75
1,752

and Automobile
1966
1,020
297
7
21
125
124
44
91
1,729

1967
900
290
5
16
88
124
38
78
1,539

1968
1,136
386
5
17
79
141
42
90
1,896

*
1969-
1,085
404
18
25
78
143
47
100
1,900

Manufacturers
  Association.
    TABLE VI-10. - PROJECTION OF MOTOR VEHICLE SALES

GNP (billions of 1967 dollars)
Gross Auto Product
(billions of 1967 dollars)
Gross Auto Product as a
(Percent of GNP)
1975
$1,105.7

$44.2

4%
1980
$1,384.3

$55.4

4%
                   VI-42

-------
          2,000
M
      a
      UJ
a     1,500
      I- 2
                                                                                               TOTAL
                                                                                               PRIVATE
                                                                                            (LEFT
                                                                                            SCALE)
           1,000
      Z
      o
      o


      ui
        o
        X
500
                                                                                         PUBLIC

                                                                                       (RIGHT
                                                                                       SCALE)
                                                               SOURCE: U.S. DEPT. OFCOMMERCE
                                                                        60



                                                                        50



                                                                        40



                                                                        30



                                                                        20



                                                                        0
              I960
                 1961
1962
                            1963
1964
1965

YEAR
1966
1967
1968
1969
                                                                                                     1970
                                        Fig. VI-1.  New Construction Units Started

-------
L±J

O
<


Q_
°-  3
Z  _l
o  o
I	  f"*^
r^
O  u.


I—  en

z  o

8  3

UJ  —
U.
O

UJ
     $100,000
       90,000 -
       80,000
       70,000 -
        60,000 -
        50,000 -
        40,000 -
        30,000 -
        20,000 -
        10,000-
                                              TOTAL
                                              PRIVATE
                                                 PUBLIC
                                 SOURCE: u.s. DEPT OF
                                        COMMERCE
                                                          J	I
             1950      1955      I960     1965     1970     1975    I960

                                       YEAR
                Fig. VI-2. Value of New Construction
                               VI-44

-------
<
I—I
I

Ol
3
uj 8.00%r
o:
o
co
O
l-
z
UJ

z
o
o

z
o


UJ


cc


(/>
UJ
QC
UJ
    7.00
    6.00
    5.00
    4.00
              SOURCE: FEDERAL HOME
                     LOAN BANK
      I960
1962
                                             1964     1966      1968

                                                 YEAR
1970
               Fig. VI-3.  Interest Rates

-------
  100,000
  90,000
a) 90,000
Q
o  70,000

   60,000
UJ
CO


2 50,000
   40,000
   30,000
       i960
                                   ACTUAL
                                   PROJECTED
                                                           /TOTAL
                                                         //HOUSE-
                                                     X.'  HOLDS
                    SOURCE: u.s. DEPT OF
                            COMMERCE
1955
I960
1965

YEAR
1970
1975
1980
                          Fig. VI-4. U. S. Households
                                 VI-46

-------
I
-P-
       150
                                                                                          STRUCTURES
                                                                                                 GNP
                                                            SOURCE: u.s. DEPT OF
                                                                    COMMERCE
                  1952
1954
1956
1958
I960

YEAR
1962
1964
1966
1968
1970
                                   Fig. VI-5.  Implicit Price Deflators (1958=100)

-------
     $7.00
      6.00
b  5.00
^L
(E
UJ

1
      4.00
v  5
i-  o
oo  I
   I  3.00


   UJ
   o
   <

   £  2.00
      1.00
                                                                                          PLUMBERS
                                                                                            BRICKLAYERS
                                                                                            ELECTRICIANS
                                                                                            CARPENTERS
                                                                                            PLASTERERS

                                                                                            PAINTERS
                                                                                               BUILDING
                                                                                               LABORERS
                                                         SOURCE :U.S.DEPT OF
                                                                 COMMERCE
        1959
              I960
1961
1962
1963
                                                  1964

                                                  YEAR
                                                        1965
                                          1966
                                          1967
                                           1968
1969
                               Fig. VI-6.  Average Wage Race for Selected Building Trades

-------
I
-p-
            8
         CO
         gj
         <
         CO


            5
u_

u  4
_j

I
o
LL)
         O


         O
                                                               PASSENGER CARS
                                                     SOURCE; AMERICAN AUTOMOBILE
                                                             ASSOCIATION
                                                                         TRUCKS
                                                                         a BUSES
                                    I	I
                                     J	I	I	I	1
             50  I    234   56789 60  I

                                              YEAR
                                                 2345678
                             Fig. Vl-7.  Motor Vehicle Factory Sales-Units

-------
V)
Q
in
O
 I
V)
UJ
C/)
$19,
 18
 17
 16
 15
 14
 13
 12
 II
                                                     PASSENGER CARS
QC   10
o
h-
o
UJ
_j
X
o
UJ
>
a:
o
  9
  8
  7
  6
  5
  4
  3
  2
                                              SOURCE: AMERICAN AUTOMOBILE
                                                      ASSOCIATION
                                                        TRUCKS & BUSES
     50  51  52  53 54 55  56 57  58  59  60  61   62 63  64  65 66  67 68
                                    YEAR
                            Fig. VI-8.  Motor Vehicle  Factory Sales-Value

-------
        9O
        80
        70
                                            PASSENGER CARS
      I
     en
        60
50
                              SOURCE: AMERICAN  AUTOMOBILE
                                      ASSOCIATION
I
Ul
      o
      UJ
      _j

      I
40
        30
      o
20
                                              TRUCKS a BUSES
         10
              55  56  57 58  59 60  61  62 63  64 65  66 67  68

                                 YEAR


                              Fig. VI-9. Motor Vehicle Registrations

-------
<
M

Ui
to
     Q

     Q-<
              6.0
          HO.

          8g5.o
          Q-t  4.0
               2.0
     LU
     a.
6.0


5.0


4.0


3.0


2.0


 1.0
                I960
                                                                                       GROSS
                                                                                       AUTO
                                                                                       PRODUCT
                                                                                                 PERSONAL
                                                                                                 CONSUMPTION
                                                                                                 EXPENDITURES
                                                                                                 ON AUTOS
           1952
1954
1956
1958
I960
YEAR
1962
1964
1966
1968
1970
                             Fig. VI-10.  Relationship of Motor Vehicle Production to GNP and Personal Incoine

-------
       1.4
                                                                    AUTOMOBILE
                                                                    PER HOUSE-
                                                                    HOLD
       1.2
M
I
Oi
o
CC
UJ
Q.
O

<
Q

O

UJ
CO

O

CC
UJ
a.

o
UJ
cc
UJ
K-
co

o
UJ
CC

CO
UJ
.J
CO
o
        1.0
        .8
                   DATA SOURCES: AUTOMOBILE REGISTRATIONS -AUTOMOBILE
                                MANUFACTURERS ASSOCIATION HOUSEHOLDS
                                AND POPULATION-U.S. DEPT OF COMMERCE
         .6
                                                                                     •AUTOMOBILE
                                                                                     PER CAPITA
                                                     j_
                                                     _L
         1950
1952
                     1954
1956
1958
 I960

YEAR
1962
1964
1966
1968
1970
                               Fig. VI-11.  Automobiles Per Household and Per Capita

-------
<
M
I

4>-
          120


          no
        CO
        UJ
        _J
        CO
        o
  100
   90
<  80

UJ

f  70
X

Q  60
***  *n
o  so
E
o.
   40
UJ
z
15
CO
8  20
    10-
    1950
                                                                                    PRICE INDEX
                                                                                    NEW AUTOS
                                                   SOURCE: u.s. DEPT OF
                                                           COMMERCE
                                                  _L
                     1952
                     1954
1956
1958
I960
YEAR
1962
1964
1966
1968
1970
                          Fig. VI-12.  Consumer Price Index for New Automobiles

-------
APPENDIX 2E



  Bibliography

-------
                            Appendix VII

                            Bibliography


Adams, Richard L.  "Application  of  Baghouses  to Electric Furnace Fume Control,"
      Journal of the Air Pollution  Control  Association.   Vol.  14,  No.  8
      (August 1964), pp. 299-302.

Air and Water Conservation  Expenditures of  the  Petroleum Industries  in the
      U.S.  New York:  Crossley,  S-D Surveys, Inc., August 1968.

Air Pollution and  the Regulated  Electric Power  and Natural Gas Industries.
      Federal Power Commission.   Washington,  D.  C.:  U.S. Government Printing
      Office, 1968.

Air/Water Pollution Report.   Silver Spring, Maryland:  Business Publishers,
      Inc., May 25, 1970.

Allsman, Paul, U.S. Bureau  of Mines,  Arlington,  Virginia.  Private communication.

Alpiser, F. M.  Private communication.

"Aluminum Profile  of An Industry,"   Metals Week.  (July 15, 1968).

American Bureau of Metal Statistics 1967 Yearbook.  New York:  American
      Bureau of Metal Statistics, 1968.

American Bureau of Metal Statistics 1968 Yearbook.  New York:  American Bureau
      of Metal Statistics,  1969.

American Iron and  Steel Institute,  Annual Statistical Report, 1967.  New York:
      American Iron and Steel Institute, 1967.

American Petroleum Institute, New York, June  1969.  Private communication.

Annual Report, International  Paper  Co.,  1966.  New York:  International Paper
      Co.,  1967.

Atmospheric Emissions from  Petroleum Refineries.  PHS Publication No. 763.
      Washington,  D. C.:  U.S. Department of  Health, Education, and  Welfare, 1960.

Automotive  Facts and Figures. 1968.   Detroit, Michigan:  Automobile
      Manufacturers Association,  1969.

Azbe, Victor J.  "Let's Step  Up  Rotary  Kiln Performance,"  Rock Products.
      Vol.  72, No. 7 (July  1969), pp. 79-82.

Bauman, H.  S.  Fundamentals of Cost Engineering  in the Chemical Industry.
      New York:  Reinhold Book Corp., 1964.
                                  VII-1

-------
Baylies, Zoe N. , American Gas Association.  Private communication.

"A Bear Market  for SCL Technology,"  Environmental Science and  Technology.
      Vol. 4, No. 6  (June 1970), pp. 474-475.

Beck, Bennie II.  "The Limestone and Lime Industries of Texas,  Part II,"
      Texas Business Review.  Vol. 42, No. 6  (June 1968), pp. 165-172.

Black, R. J., et al.  "The National Solid Wastes Survey."  Paper presented  at
      the American Public Works Association, Miami, Florida, October 24,  1968.

Bland, H., Aeroglide Corporation.  Private communication.

Blosser, R. 0.  and H. B. Cooper.  "Trends in Atmospheric Particulate Matter
      Reduction in the Kraft Industry,"  Tappi.  Vol. 51, No. 5 (May 1968),
      pp. 73A-77A.

Borenstein, Murray.  "Air Pollution Control for the Iron and Steel Making
      Processes,"  Industrial Heating.   (September 1967), pp. 1646-1648.

Boynton, R. S.  Chemistry and Technology of Lime and Limestone.  New York:
      Interscience Publishers, 1966.

Boynton, Robert S.,  Executive Director, Technical Service, National Lime
      Association, Washington, D. C.  Private communication.

Brown, H. R., et al.  Fire and Explosion Hazards in Thermal Coal-drying Plants.
      U.S. Department of the Interior, Bureau of Mines Report of Investigations
      5198.  Washington, D. C.:  U.S. Government Printing Office, February  1956.

Brubacher, Miles L., Air Resources Board, State of California.  Private
      communication.

Bulletin G-87A. Barberton, Ohio:  Babcock and Wilcox Co., 1956.

Bureau of Solid Waste Management Private Communication.

Burkhardt, D. B.  "Sulfur and Sulfuric Acid Plants:  Increasing Conversion
      Efficiency," Chemical Engineering Progress.  Vol. 64, No. 11
      (November 1968), pp. 66-70.

Campbell, W. W. and  R. W. Fullerton.  "Development of an Electric-Furnace
      Dust-Control System," Journal of the Air Pollution Control Association.
      Vol. 12,  No. 12 (December 1962), pp. 574-577.

Casberg, T., Department of Defense, Washington, D. C.  Private  communication.

"Cement Capacity in  North America," Rock Products.  Vol. 72, No. 5  (May 1969),
      pp. 49-54.

Chemical Economics Handbook.  Menlo Park, California:  Stanford Research  Insti-
      tute, December 1967.

Chicago Bridge  and Iron Company, June and August 1969.  Private communications.
                                  VII-2

-------
Collins, R. L., M. E. Fogel, D. A.  LeSourd,  and R.  E.  Paddock.   Cost to
      Industry of Compliance with National Emission Standards.   Research
      Triangle Park, N. C.:  Research Triangle Institute,  1969.

Commercial Fertilizer Yearbook, 1968—69.   Atlanta,  Georgia:   Walter W.
      Brown Publishing Company, Inc., 1969.

"Commercial Lime Plants in  the U.S.  and Canada." A map  and  list prepared
      by the National Lime  Association, Washington,  D. C., 1967.

A Comprehensive Bibliography of SAE Literature Vehicle Emissions 1955-1967.
      New York, N. Y.:  Society of  Automotive Engineers, Inc.,  [n.d.].

Control of Atmospheric Emissions in the Wood Pulping Industry.   Vol. 1
      (Final Report).  Contract CPS 22-69-18, Environmental  Engineering, Inc.,
      Gainesville, Florida  and J. E.  Sirrine Co., Greenville, S.  C.  for  the
      National Air Pollution Control Administration  (DHEW),  March 15, 1970.

Control Techniques for Fluoride Air Pollutants.  Prepared by Singmaster  and
      Breyer for U.S. Department of Health,  Education, and Welfare,  PHS,
      Consumer Protection and Environmental  Health Service,  NAPCA^ Washington,
      D. C., February 13, 1970.

The Cost of Clean Air, Second Report, The Secretary  of HEW,  March 19, 1970.

Costs and  Economic Impacts  of Air Pollution  Control.  Report to  the  National
      Air  Pollution  Control Administration.   Washington, D.  C.:   Ernst and
      Ernst, 1968.

Dement, John.  "Cost of Dolomite-Injection/Wet Scrubbing." Unpublished
      report of  the  Air Pollution Control Office, Raleigh.

Danielson, J.  A.  (ed.).   Air Pollution Engineering Manual.   Publich  Health
      Service  Publication No. 999-AP-40.   Cincinnati, Ohio:  U.S. Department
      of Health, Education, and Welfare,  1967.

Directory  of American Iron  and Steel Works of the United States  and  Canada,
      1967.  New York:  American Iron and Steel Institute, April  1967.

"Directory of  Brick  and Tile Manufacturers in the American Structural Clay
      Products Industry,  1970."  Structural  Clay Products Institute, McLean,
      Virginia,  January 1970.

Directory  of Chemical Producers.  Menlo Park, California:  Stanford  Research
      Institute, 1969.

Directory  of Iron  and Steel Plants, 1969. Pittsburgh, Pennsylvania:  Steel
      Publications,  Inc., 1969.

Duorev  R. L.  Compilation of Air Pollutant Emission  Factors.  Public Health
      Service  Publication No. 999-Ap-4Z.   Durham, N. C.: U.S. Department of
      Health,  Education,  and Welfare, National Center for Air Pollution
      Control, 1968.


                                  VI I-3

-------
Economic Aspects of Control of Air Quality in the Integrated Iron and  Steel
      Industry, Draft of Final Report to NAPCA.  Battelle Memorial  Institute,
      Columbus, Ohio, March 31, 1969.

"Economic Indicators,"  Chemical Engineering.  Vol. 77, No. 18  (August  24,  1970),

The Economics of Residual Fuel Oil Desulfurization.  Prepared by the Bechtel
      Corporation.  Cincinnati:  U.S. Department of Health, Education,  and
      Welfare, Division of Air Pollution, (PHS), 1967.

Edmisten, N. G. and F. L. Bunyard.  "A Systematic Procedure for Determining
      the Cost of Controlling Particulate Emissions from Industrial Sources."
      Presented at the annual meeting of the Air Pollution Control Associa-
      tion, New York, June 1969.

Elements of Solid Waste Management, Training Manual.  EGA, Washington,  D. C.:
      PHS, March 1969.

"Eleventh Annual Market Analysis on Electric Heating,"  Electric Heat and
      Aircondit ioning.  (Reprinted from the March-April 1967 issue), pp. 2-6.

Elliott, A. C. and A. J. Lafreniere.  "The Collection of Metallurgical  Fumes
      from an Oxygen Lanced Open Hearth Furnace,"  Journal of the Air Pollution
      Control Association.  Vol. 14, No. 10 (October 1964), pp. 401-405.

Ellis, David H., West Virginia Air Pollution Control Commission, Charleston,
      West Virginia, July 11, 1969.  Private communication.

Faught, D. William, Chief of Fibers and Grainin Section, Economics Research
      Service, U.S.D.A.  Private communication.

"Federal Power Commission Survey of Fuels Consumed by Electric Utilities in
      1967" (mimeographed).  Compiled by the Federal Power Commission,
      Washington, D. C.

Ferguson, F. A., K. T. Semrou, and D. R. Monti.  "S0? from Smelters: By-
      Product Markets a Powerful Lure."  Environmental Science and Technology.
      Vol. 4, No. 7  (July 1970), pp. 562-568.

"Finding Money in Sulfite-Pulp Spent Liquor,"  Chemical Engineering.  Vol.  72
      (August 16, 1967), pp. 74-76.

Finney, C. S., W. C. De Sieghardt, and H. E. Harris.  "Coke Making in the
      United States—Past, Present, and Future,"  The Canadian Mining and
      Me t allurgi cal Bulletin.  Vol. 60 (September 1967), pp. 1032-1040.

Fogel, M. .E.,  D.  R.  Johnston,  R.  L. Collins, D.  A.  LeSourd, R.  W.  Gerstle,
      E.  L.  Hill.   Comprehensive Economic Cost Study of Air Pollution Control
      Cost for Selected Industries and Selected Regions.  Research Triangle
      Park, N. C.:  Research Triangle Institute, February 1970.
"Foundries Fail on Clean Air Laws,"  Business Week.  (August 29, 1970), p.  48.

Friedrich, H.  E.   "Air Pollution Control Practices and Criteria for Hot-Mix
      Asphalt Paving Batch Plants."  Presented at 62nd Annual Meeting of the
      Air Pollution Control Association, New York, June 22-26, 1969.

The Fuel of Fifty Cities.   Report to the National Air Pollution Control
      Administration.  Washington, D. C.:  Ernst and Ernst, November 1968.

                                   VII-4

-------
Fullerton, R. W.   "Impingement  Baffles to Reduce Emissions from Coke
      Quenching,"   Journal of the Air Pollution Control Association.
      Vol. 17, No.  12  (December 1967), pp. 807-809.

Grekel, J. W., Palm, and J. W.  Kolmer.  "Why Recover Sulfur from H S,"
      The Oil and  Gas  Journal.   (October 28, 1968).               2

"Guide for Air Pollution Control of Hot-Mix Asphalt Plants."  Prepared  by
      Resources Research, Inc.   Falls Church, Virginia for the Asphalt
      Pavement Association, [n. d.].

Gutschick, Kenneth A., Manager, Technical Service, National Lime Association,
      Washington,  D.  C.  Private communication.

Hangebrauck,  R. P., et al. Sources of Polynuclear Hydrocarbon in the
      Atmosphere.   PHS Publication No. 999-AP-33.  Washington, D.  C.:
      U.S. Department  of Health, Education, and Welfare, 1967.

Harris,  E. R.  and F.  R. Beiser.  "Cleaning Sinter Plant Gas with Venturi
      Scrubber,"   Journal of the Air Pollution Control Association.  Vol.  15,
      No.  2  (February  1967), pp. 46-49.

Heating  Degree Day Normals, 1963.  Decennial Census of U.S. Climate, Clima-
       tography of the  U.S. No. 83.  Washington, D. C.:  U.S. Government
      Printing Office, 1968.

Heller,  Austin N.  and Donald F. Walters.  "Impact of Changing Patterns  of
       Energy Use on Community Air Quality,"  Journal of the Air Pollution
       Control Association.  Vol. 15, No. 9 (September 1965), pp.  423-428.

Herrick, Robert A., Joseph W. Olsen, and Francis A. Ray.  "Oxygen-Lanced
       Open Hearth Furnace Fume Cleaning with a Glass Fabric Baghouse,"
       Journal of the Air Pollution Control Association.  Vol. 16,  No. 1
       (January 1966),  pp. 9-11.

Hinge,  E.  M.  "Study Analyses Iron Melting Costs," Foundry. (December 1960),
       pp.  160-163.

Hongen,  Olaf A. and K. M. Watson.  Chemical Process Principles;  Part One.
       New York, N. Y.:  John Wiley and Sons, Inc., 1943.

Hot-Mix Asphalt Production and Use Facts for 1967.  Riverdale, Maryland:
       National Asphalt Pavement Association, 1968.

Houseman,  Paul, U.S. Bureau of Mines.  Private communication.

Hubbard, R.  F., Assistant General Superintendent, The Cargill Company.
       Private communication.

Hugick,  Henry J., Sales Engineer, Kennedy Van Saun Corporation, Danville,
       Pennsylvania,  Private communication.

"Industrial Process Data for Proper Selection of Air Cleaning Equipment,"
       Air Engineering.   (December 1966), pp. 25-27.
                                    VI I-5

-------
Interstate Air Pollution Study;  St. Louis, Phase II Project Report.
      Cincinnati, Ohio:  U.S. Public Health Service, May 1969.

Kaiser, E. R.  Kaiser and J. Tolciss.  "Smokeless Burning of Automobile
      Bodies,"  Journal of the Air Pollution Control Association.  Vol. 12,
      No. 2  (February 1962), p. 64-73.

Keystone Coal Buyers Manual 1967.  New York:  McGraw-Hill Co., 1968.

Kreichelt, T. E., D. A. Kemnitz, and S. T. Cuffe.  Atmospheric Emissions
      from the Manufacture of Portland Cement.  Public Health Service
      Publication No. 999-AP-17.  Cincinnati, Ohio:  U.S. Department of
      Health, Education, and Welfare,  (PHS), 1967.

Kronsider, J. G.  "Cost of Reducing S02 Emissions,"  Chemical Engineering
      Progress.  Larry Resen, editor.  Vol. 64, No. 2 (November 1968), pp.
      71-74.

Landsberg, et al.  Resources in America's Future.  Baltimore, Maryland:
      The Johns Hopkins Press, 1963.

Laster, L. National Air Pollution Control Administration, August 1969.
      Private communication.

Lawson, S. P., J. F. Moore, and J. B. Rather, Jr.  "Added Cost of Unloaded
      Gasoline,"  Hydrocarbon Processing.  Vol. 46, No. 6 (June 1967).

Lea, N. S. and E. A. Christoferson.  "Save Money by Stopping Air Pollution,"
      Chemical Engineering Progress.  Vol. 61, No. 11 (November 1965), pp.
      89-93.

Lewis, C. J. and B. B. Crocker.  "The Lime Industry's Problem of Airborne
      Dust," Journal of the Air Pollution Control Association.  Vol. 19,
      No. 1  (January 1969), pp. 31-39.

"Listing of  Cement Plants by Annual Capacities"  (mimeographed).  Prepared
      by the U.S. Bureau of Mines, Washington, D. C., October 15, 1968.

Lockwood's Directory of the Paper and Allied Trades.  New York, N. Y.:
      Lockwood Trade Journal Co., Inc., 1968.

Logan, J. 0., President, Universal Oil Products Co. (Testimony to Assembly
      Committee  on Transportation of the California Legislature), Los Angeles,
      California, December 4, 1969, 20 pp.

Los Angeles  County Air Pollution Control District, August 1969 and September
      15, 1969.  Private Communications.

Lund, H. F.  "Industrial Air Pollution Control Equipment Survey:  Operating
      Costs  and Procedures,"  Journal of the Air Pollution Control Associaiton.
      Vol. 19, No. 5 (May 1969), pp. 315-321.~~
                                   VII-6

-------
Mayer, Martin.  A Compilation of Air Pollutant Emission Factors for Com-
      bustion Processes,  Gasoline Evaporation, and Selected Industrial
      Processes.   Cincinnati, Ohio:   U.S.  Department of Health, Education,
      and Welfare,  (PHS), May 1965.

McCabe, L.  C.   "Aluminum Industry Has Devised Means for Solving Air Pollution
      Problems,"   Industrial and Engineering Chemists.   Vol.  4 (August 1965).

McGraw, M. ,  National Air Pollution Control Administration.  Private communi-
      cation.

Meredith,  Deward. National Air Pollution Control Administration.   Private
      communication.

Moeller, W.  and K.  Winkler,  "The Double Contact Process for  Sulfuric  Acid
      Production,"  Journal of the Air Pollution Control Association.
      Vol.  18,  No.  5 (May 1968), pp. 324-325.

Molos ,  J.  E.  "Control of Odors from a Continuous Soap  Making Process,"
      Journal of the Air Pollution Control Association.   Vol.  11,  No.  1
       (January 11, 1961), pp. 9-13;  44.

Moody *s Industrial Manual.  New York:  Moody ?s Investor Service, 1970.

Moore,  William W.  "Reduction in Ambient Air Concentration  of Fly  Ash —
      Present and Future Prospects,"  Proceedings;  The Third National
       Conference on Air Pollution.  Washington, D. C. :   U.S.  Department  of
      Health, Education, and Welfare, (PHS), 1967, pp.  170-178.

Motor Assembly Line Testing. Final Report.  Prepared by Statistics Research
      Division, Research Triangle Institute for the National  Air Pollution
       Control Administration, August 1970.

Muhich, A. J., et al.  1968 National Survey of Community Practices. Depart-
      ment of Health, Education, and Welfare, PHS, EGA, Solid Waste Program,
       1968, and Combustion Engineering Company Incinerator  Study,  1967 PHS
       Contract.

National Academy of Engineering, "Abatement of Sulfur Oxide Emissions  from
       Stationary Source."  Report of a study underway by the  Committee on
       Air Quality Management for the National Academy of Engineers in
       execution of work with the Air Pollution Control Office, Washington,
       D.  C., 1970.

National Coal Policy Conference.  Private communication.

National Electric Rate Book. 1968.  Federal Power Commission.  Washington,
- oTm  U.S. Government Printing Office, 1968.
                   Standards Study. First Draft.  U.S  Department of Health,
       Education, and Welfare, NArCA, Durham, N. C. , 1969.

 "New Lime Plant Begins Production,"  Iron and Steel Engineer.  Vol. 42, No.  12
       (December 1965), p. 162.
                                   VII- 7

-------
"1966 Installations," Fueloil and Oil Heat.  (Reprinted from the April
      1967 issue), pp. 3-11.

"1968 Oil Heating Sales Analysis,"  Fueloil & Oil Heat.  (Reprinted from
      the January and April 1969 issues), pp. 3-11.

Northcott, E.  "Dust Abatement at Bird Coal,"  Mining Congress Journal.
      (November 1967), pp. 29-34; 36.

Noyes, Robert.  Phosphoric Acid by the Wet Process - 1967.  Park Ridge,
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Ott, R. R. and R. E. Hatchard.  "Control of Fluoride Emissions at Harvey
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                                  VII-8

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                                   VII-9

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Schreter, R. E., Poe, L. G., and Kuska, E. M., Mechanical Engineering.
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                                  VII-10

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Statistics of Electric Utilities  in  the United States. 1963 Privately Owned.
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Supply  and Demand for Energy in the United States by States  and  Regions. 1960
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Systems Study for Control of  Emissions  in  the Primary  Nonferrous Smelting
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      Company,  June 1969.
                              VII-11

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 Teller,  A.  J.   "Control  of  Gaseous  Fluoride Emissions,"  Chemical Engineering
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 Tyree, Clifford D. and Karl J. Springer.  Studies of Emissions from Gasoline-
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                              VII-12

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      	.   Economic Impact of Air Pollution Control on the Secondary Non-
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                               VII-13

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                                 VII-14

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                                  VII-15

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                                   VII-16

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