26453-3
An Industry Approach for the Regulation of
Toxic Pollutants
Prepared for
Toxics Integration Project
U.S. Environmental Protection Agency
Prepared by
Putnam, Hayes & Bartlett, Inc.
SO Church Street
Cambridge, MA 02138
IS August 1981
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26453
TABLE OF CONTENTS
Chapter 1
EXECUTIVE SUMMARY
Introduction ...................
Sununary of Approach ................ *
Summary of Results ..... ........... °
Overview of This Report .............. 10
Chapter 2 .
DESCRIPTION OF APPROACH 1J-
Introduction ^
Characteristics of the Problem J-*
Production and Pollution Analysis. 13
Exposure Analysis ^
Health Effect Analysis • "
Integration of Production, Pollution,
Exposure and Health Analyses 28
Cumulative Economic Impacts 32
Chapter 3
FORM, INTERPRETATION AND USE OF RESULTS
Introduction
Cost-Effectiveness Analysis. . . .
Cumulative Economic Impact Analysis
Major Limitations of the Approach
Sensitivity Analysis
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TABLE OF CONTENTS
Chapter 4
INDUSTRY APPLICATIONS 50
Introduction 50
Chlorinated Organic Solvents Industry 51
Copper Smelting Industry 89
APPENDICES (Separate Volume)
Appendix A
MATHEMATICAL PROGRAMMING FORMULATION A-l
Introduction • • • • A-l
Objective Function A-4
Material Balance Constraints A-7
Factor Input Constraints - A-7
Capacity Constraints A-8
Operating Constraints. . A-a .
Pollution Control Constraints A-10
Health Effect Constraints A-12
Model Operation A-14
Model Results A-14
Appendix 8
EXPOSURE ASSESSMENT B-l
Air Pollution Modeling B-l
Analysis of Human Exposure Through
Drinking Water and Fish Consumption B-7
Ground Water Contamination From
Hazardous Waste B-12
Appendix C
PROCEDURES FOR ESTIMATING HEALTH RISK - C-l
Toxics Integration Program Scoring of
Selected Pollutants for Relative Risk
Prepared by Clement Associates,Inc. C-3
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TABLE OF CONTENTS
Appendix D
ALTERNATIVE WEIGHTING SYSTEMS
FOR EIGHT HEALTH EFFECTS D-l
Methods for Assigning Weights
to Health Effects in Integrated
Risk-Reduction Models'
Prepared by Milton C. Weinstein D-2
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ACKNOWLEDGEMENTS
In carrying out this effort, Putnam, Hayes & Bartlett,
Inc. (PHB) received guidance and assistance from many En-
vironmental Protection Agency (EPA) staff. Overall super-
vision of the effort was provided by EPA's Project Officers:
Bob Fuhrman, Fred Talcott and Jim Titus. Toxics Integration
Project members who contributed included Dan Beardsley, Kathy
McMillan, Mike Gruber, Jim Falco, Mike Alford and Walt
Kovalick. In addition to these individuals, a number of
EPA staff members made major contributions of time, data
and ideas to the effort. These people include:
Bob April
Arnie Edelman
Paul Farenthold
Dave Graham
Francine Jacoff
Arnie Kuzmak
Fred Leutner
Alec McBride
Bob McGaughy
Dave Patrick
George Provenzano
Roy Rathbun
Mike Slimak
Pat Williams
Office of Water Enforcement
Office of Pesticides and Toxic
Substances
Office of Water Regulations and
Standards
Office of Research and Development
Office of Solid Waste
Office of Drinking Water
Office of Water Regulations and
Standards
Office of Water Regulations and
Standards
Office of Research and Development
Office of Air Quality Planning and
Standards
Office of Research and Development
Office of Air, Noise and Radiation
Enforcement
Office of Water Regulations and
Standards
Office of Water Regulations and
Standards
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Putnam, Hayes & Bartlett, Inc.'s work on this project
was carried out under the overall direction of Mike Huguenin,
with project management provided by John Butler, Sharon
Chown and Robert Golden. PHB staff contributing to the
effort included Kerry Diehl, Chuck Elliott, Bill Jackson,
Kate Mulroney, MaryAnn Pocock, Ken Pott, Maureen Ratigan,
and Howard Seidler. Report production and general support
were provided in admirable fashion by Kath Fitzgerald,
Mary Ann Buescher, Carol Newman, and Barby Prothro.
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EXECUTIVE SUMMARY CHAPTER 1
INTRODUCTION
In January 1981 the U.S. Environmental - Protection
Agency (EPA) embarked on a set of activities to develop an
overall Agency strategy for toxic pollutant control. As
cited in EPA's work plan for this effort, these activities
include:
1. Design of operational mechanisms to coordinate
regulation, data gathering, analysis of toxic
substances, and analysis of nonregulatory control
approaches.
2. Design and testing of prototype geographic, chem-
ical-by-cheraical, and industry-wide approaches to
toxic pollutant problems.
3. Identification of legislative changes needed to
effectively integrate toxics control.
4. Organizational changes needed to implement the
Agency's integrated toxics strategy.
5. Resource allocation recommendations for FY 82 and
FY 83.
Putnam, Hayes and Bartlett, Inc. (PHB) was engaged by EPA
to develop and test a prototype industry-wide approach to
toxic pollutant control in support of Task 2 above.
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EPA's intent in developing an industry approach is to
develop methods that allow identification of the most cost-
effective options to minimize tvealth and environmental
risks associated with industrial discharges. The specific
objectives of the approach are to
"characterize the nature and magnitude of the pollution
problems specific to industry, identify available in-
formation on exposure and risk from the pollutants,
assess the combined environmental and economic impacts
of various levels of regulation, and attempt to draw
conclusions on the need for priority-setting among
environmental media and pollutants."
It is important to note the emphasis on developing pri-
orities for regulation. What is desired is a tool to
assist EPA in deciding upon basic regulatory approaches
for a given industry, using consistent estimates of pollu-
tion levels, costs and the relative risks posed by such
pollution. Detailed technical or economic analysis of the
type required to support specific regulations is not the
intended output of the industry approach.
' " In order to develop the industry approach, PHB designed
a general methodology and applied this methodology to the
chlorinated organic solvents and the copper smelting indus-
tries. The intent of this work was to develop and test
the methodology and to gain initial insights into the indus-
tries considered.
Each of these industries has several characteristics
which led to its inclusion in the study. In the case of
chlorinated organic solvents, the industry is the source of
large amounts of toxic pollutants, is relatively complex,
and is well known to many EPA staff. In the case of copper
smelting, the industry is the source of a different type of
toxic pollutant (metals versus organic chemicals), presents
different types of exposure problems, and is of interest
to EPA due to the upcoming amendments to the Clean Air Act
and general financial pressure on the industry.
The remainder of this chapter provides a summary of the
industry approach and summarizes the results of the chlorin-
ated organic solvent and copper smelting case studies. Fi-
nally, the organization of the remainder of this report is
outlined.
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SUMMARY OF APPROACH
The analysis of industrial discharges of toxic pollu-
tants and the associated human exposure and health effects
can be separated into four elements as diagrammed below.
Figure 1
PROBLEM COMPONENTS
Production
Pollution
Exposure
Health Effects
Production activities in any industrial sector create prod-
ucts for sale, employment opportunities, and profits; and
determine the underlying economic strength and value added
by that sector tb the overall economy. As a by-product of
these activities, however, the sector will generate pollu-
tion. Pollution may consist of a large variety of sub-
stances that are released into the air, surface water and
ground water. The discharge of pollutants will result in
exposure of human populations. Such exposure may generate
adverse health effects depending on both the degree of
toxicity of the pollutant and the extent of human exposure.
In analyzing the overall problem, one first must under-
stand the basic economics and production characteristics of
the industry of interest. Next, one must estimate the
physical quantity and composition of pollutants that are
generated by the industry, and understand how the flow of
pollutants can be reduced. Pollutant reduction can occur
by installation of pollution control equipment, changes in
raw materials or manufacturing processes, curtailment of
production, and other control strategies. Each of these
possible control approaches will impose costs on the indus-
try and will result in reduction in the release of pollut-
ants. Considered together, this information allows the
analyst to estimate the feasibility and cost of limiting
the physical discharges of specific pollutants from specific
sources in production facilities.
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In order to determine the extent to which specific
pollutants should be limited, one must consider both the
costs of control and the ultimate' damage that occurs as "a
result of such pollution. If human health effects are the
damage of concern, the analyst must understand the various
exposure pathways through which pollutants move and estimate
the actual dosage received by human populations. Next, the
analyst must estimate how changes in dosage levels due to
industrial pollution control will reduce health effects
given the level of background pollution, the attributes
of the population exposed and other factors. Finally,
the analyst must prioritize reduction of different health
effects in some way. Considered together, all of this
information allows estimation of the human health effects
resulting from the alternative levels of pollution from an
industry.
Many of the analyses described above have been carried
out individually before. The great strength of the current
effort is that all analyses are carried out simultaneously,
using consistent assumptions and conditions. This inte-
grated approach ensures that: •
• All pollutants that are important contributors of
health damage are considered,
• All feasible control options are explored and as-
sessed,
• Intermedia tradeoffs (especially due to control
equipment) are made after explicit consideration,
and
- • The relative importance of reduction in different
health effects is evaluated.
In order to develop the approach outlined above, PHB
has designed a methodology which utilizes to the maximum
extent possible existing EPA data and understanding. In
the production and pollution areas, EPA has a good under-
standing of the major manufacturing processes in most in-
dustries and the pollution quantities emitted by these
processes. The exact composition of the pollutants, how-
ever, is often uncertain. Further, SPA usually has devel-
oped cost and removal efficiency estimates for one or
more methods of pollution control for each specific source
of pollution.
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In the exposure area, EPA has developed a variety of
analytic methods that can be used to predict the concentra-
tion of various pollutants around a discharge point. These
models are best developed for air pollution, are less devel-
oped for water pollution and are only in very preliminary
stages for ground water pollution.
Finally, EPA and others outside the Agency have examined
many pollutants and their associated health effects to under-
stand the relationship between dosage of a given pollutant
and incidence of a specific health effect. Although this
work is incomplete, at PHB's request Clement Associates,
Inc. developed a method to evaluate the relative risk of
incidence of different health effects from exposure to dif-
ferent pollutants.
' The current state of both theoretical knowledge and
available data concerning several of these analytic steps
is insufficient to allow precise estimation of the costs
and health benefits of alternative toxic control regulations;.
Thus, the approach presented in this report is not sufficient
to support specific regulations. However, the approach 12
useful to evaluate pollution abatement strategies. In
addition, the .approach. identifies the most important gaps
in basic understanding-and data availability. ;
Although the limitations in the approach are largely
determined by the availability and quality of data for any
industry-being examined, one general limitation will apply
for all industries considered. Current toxicological know-
ledge prevents estimation of absolute incidence of health
effects other than cancer. This fact in turn prevents
development of an industry approach which predicts absolute
levels of health effects which could then be used to calcu-
late the "benefit" of toxic pollutant control. Thus, the
approach outlined herein is not a true cost-benefit ap-
proach, but instead indicates the most cost-effective means
to achieve alternate levels of relative health risk reduc-
tion.
Finally, the current effort focused on human health
effects and has not considered other environmental effects.
The decision to focus on health effects was made due to
time and resource limitations and is not meant to imply
that other effects of industrial pollution are unimportant.
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The analysis carried out for the chlorinated organic solvent
and copper smelting industries included discharge estimates
for conventional as well as toxic pollutants. Further
consideration of environmental effects could be added to
these analyses. *
SUMMARY OF RESULTS
The overall results of PHB's work indicate that the
industry approach provides useful results for formulation
of industry-wide approaches to toxic pollutant control.
In addition, the method highlights areas of particularly
severe uncertainty due to data limitations and therefore as-
sists the planning of future research efforts. The sec-
tions below review the initial insights developed for the
chlorinated solvents and copper smelting industries and
then summarize the general results of PHB's work. Detailed
results for the industry case studies are provided in the
"briefing packages included under separate cover.
It is important to restate that one cannot reasonably
generalize about the value of specific existing regulations
based on the work to date, except in terms of human health.
Even then, such generalizations may be unwarranted and
should be avoided. SPA has not yet thoroughly reviewed
either the data or the methodology used in these studies.
Thus, all results summarized below and in the briefing
packages are preliminary and are not an appropriate basis
for current policy decisions.
Results for Chlorinated Organics Industry
The chlorinated organic solvents industry is a segment
of the organic chemicals industry. Although the solvent
segment is an important part of the larger industry, the
results for this segment cannot be generalized to the over-
all industry. However, the chlorinated solvent segment
itself has been of major interest to EPA over the past
several years.
The results of PHB's study indicate that major percen-
tage reductions in health risk can be achieved at relatively
modest cost in this industry. However, it appears that the
absolute levels of health risk due to uncontrolled industry
operations are minor and thus additional risk reduction
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would be extremely expensive on a per unit basis and thus
unwarranted. If further reduction in health risk is deemed
desirable-,--additional control on a mix of air emission, -haz--
ardous waste, and then water effluent sources would be most
cost-effective.
Regulatory decision makers are often concerned with
individual risk levels as well as aggregate risk levels.
Maximum individual risk levels for one health effect (cancer)
have been estimated for one large chlorinated solvent plant
(accounting for about 10.2 percent of industry production)
in a densely populated area.* At uncontrolled pollution
levels, approximately 100 people around this plant would
have an annual individual cancer risk in the range of 10"4
to 10~5.** If such levels of individual risk are of
concern, additional•work should be done to estimate indi-
vidual risk levels for the entire industry.
Current controls in place in the chlorinated organic
solvents industry do not appear to be a cost-effective
means to protect human health. These controls have been
aimed primarily at reduction of conventional water pollut-
ants such as BOD. The benefits of conventional pollutant
reduction may justify the expenditures made for these
controls, but equal -expenditures on a different set of
control options could have provided a percentage health
risk reduction of over 80 percent. The implied tradeoff
between conventional and toxic pollutant control should
receive further attention.
In carrying out this analysis, PHB found that air emis-
sions from water pollution control equipment and from
surface waters are a major source of toxic air pollution
and health risk. This occurs because many of the pollutants
generated by the chlorinated solvents segment are highly
volatile. In some cases, the addition of certain water
pollution control equipment may actually increase slightly
the health risk generated by these plants. However, there
* Only cancer risks were estimated as GAG unit risk factors
for cancer are the only generally accepted incidence
measure.
** Approximately 4500 people would have an annual cancer
risk in the range of 10~5 to 10~6.
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appear to be methods (steam stripping, for example) to
alleviate this problem and provide cost-effective risk
reduction. Until further analysis of this " issue" is per-
formed, it may be advisable to exercise caution in mandat-
ing further control of water effluent in the chlorinated
solvents industry.
The overall organic chemicals industry and the chlor-
inated solvents segment appear to be in relatively good
financial health. The modest cost of health risk reduction
creates very little financial strain on the industry. In
addition, small increases in product prices would allow
almost full recovery of costs and leave industry profits
near their baseline level.
Results for Copper Smelting Industry
The copper smelting industry is a large source of both
conventional and toxic air pollutants. Large amounts of
sulfur dioxide (S02) and particulates are emitted, as well
as toxic raetals such as arsenic and lead. Current controls
at many of the smelters are not adequate to meet air quality
standards. Control levels required to bring the smelters
into compliance are costly and may be difficult to achieve
given the industry's current financial condition.
At the time of publication of this report, work on the
copper smelting case study was not finished.* However, pre-
liminary results indicate that a significant reduction in
health risk can be achieved at relatively low cost by con-
trolling fugitive emissions of S02 and particulates. In
general, current controls in place in the industry have
focused on stack emissions and are not a cost-effective
means of reducing human health risk.
In most cases, the additional- controls currer.tly man-
dated for smelters focus on stack emissions. Thus, these
mandated controls are not a cost-effective means for reduc-
ing human health risk. However, the environmental benefits
(for example, visibility improvement, reduced crop damage)
derived from both the mandated and in-place controls may
justify the cost of these controls.
* The case study will be completed by late August.
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There are a few smelters which are located far from
population centers. For these smelters, stack controls of-
fer more cost-effective protection to human- health than, do—
fugitive controls. However, additional analysis would be
required to determine whether the absolute level of health
risk in these cases warrants either stack or fugitive con-
trols.
Overall Conclusions and Priorities
for Additional Work
The industry approach has proven useful in the chlo-
rinated organic solvent and copper smelter applications.
In both industries valuable insights have been gained for
a number of important issues, including:
• The most cost-effective means to achieve reduc-
tion in health risk from industrial pollution,
• The effectiveness of current controls in achiev-
ing such risk reduction,
• The relative merit of a variety of additional con-
trol strategies,
• The implications of different health effect pri-
orities,
• Current and potential tradeoffs between toxic and
conventional pollution control,
• The cross media impacts of different control ac-
tions , and
• The overall financial and economic impact of al-
ternative control strategies on each industry.
The cost and time required to develop the approach and
achieve these insights have been reasonable given the scope
and importance of the problem.
The analyses of both industries has been limited by
several key data problems. In order to further improve the
industry approach, additional research should proceed in
several areas:
• Research on health effect incidence for a variety
of pollutants should be accelerated.
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• Environmental effects should be added to the In-
dus try._..approach .
• Ground water models should be further developed.
• Existing water quality models should be combined
with population data and automated to ease access.
• Cross-media effects, especially due to volatili-
zation of pollutants from water control equipment,
should be thoroughly analyzed.
OVERVIEW OF THIS REPORT
The remaining chapters of this report describe the
industry approach and case studies in more detail, and are
organized as follows:
Chapter 2 describes the approach to industry-wide as-
sessment in detail;
Chapter 3 reviews the type of results derived using
the approach, explains their interpretation,
and discusses the limitations of the ap-
proach and methods of sensitivity analysis;
Chapter 4 summarizes the results from applying the
method to the chlorinated organic solvent
and copper smelter cases;
The appendices are provided under separate cover and
include the following topics:
Appendix A describes the formulation of the problem
using mathematical programming techniques;
Appendix B provides more detail on the methods used to
predict human exposure;
Appendix C provides more detail about the methods used
to predict relative risk of health effects;
Appendix D provides more detail on the methods devel-
oped to prioritize different health effects.
The detailed results for the industry case studies are in-
cluded in two briefing packages provided under separate
cover.
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DESCRIPTION OF APPROACH CHAPTER 2
INTRODUCTION
In order to develop a useful industry approach to
toxic pollutant control, three types of . problems must be
overcome. First/ there is t'remendous diversity both within
and across industries and their associated pollution, ex-
posure and health problems. Second, the industrial proc-
esses, exposure pathways and health effects of interest
are highly complex phenomena. Finally, there is considerable
uncertainty in the existing knowledge concerning many aspects
of these phenomena. Each of these problems must be addressed
in order to develop an industry approachr
This chapter explains how the problems of diversity,
complexity and uncertainty were addressed in this analysis.
The industry approach is then described in detail. Further
information about the approach is provided in the appendices.
The material in this chapter is organized as follows:
• Characteristics of the Problem,
• Production and Pollution Analysis,
• Exposure Analysis,
• Health Effect Analysis,
• Integration of Production, Pollution, Exposure and
Health Analyses, and
• Estimation of Cumulative Economic Impacts.
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CHARACTERISTICS OF THE PROBLEM
DiversTty"
Industrial facilities and associated toxic pollutant
problems are extremely diverse. Facilities themselves range
from relatively simple operations with straightforward pol-
lutant generation (copper smelters, for example) to complex
plants comprised of many interconnecting production proc-
esses with a large variety of pollutants (chemical plants).
In addition to the diversity of production equipment and
characteristic pollutants, facilities are situated in many
different areas and thus the exposure routes and populations
exposed to toxic pollutants vary widely. The approach
developed must be able to accoraodate all of this diversity.
The industry approach developed is therefore very
flexible. It can be used to analyze highly complex indus-
tries by relying on generalized plant configurations and
industry average data or very simple industries using
plant-specific data. In the chlorinated solvents case
study, three generalized plant configurations and industry
average data were used. In contrast, each actual copper
smelter was analyzed using as much plant-specific data as
possible.*
Complexity
All of the phenomena underlying toxic pollution from
industrial facilities are complex as well as diverse. The
mechanisms through which industrial processes create and
emit pollutants are relatively straightforward. However,
the means by which pollutants are transported through the
air, through bodies of water and through the ground are
quite complicated and difficult to analyze accurately.
Further, the mechanisms by which specific pollutants cause
undesirable health effects are both complicated and poorly
* It was possible to analyze each copper smelter since
there are only 13 plants owned by 5 firms, with at most
4 production processes, and significant information on
costs and emissions was available on a plant-specific
basis. The chlorinated solvents industry is comprised
of 31 plants owned by 8 firms; the production facilities
include as many as 11 production processes.
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understood. All of these complexities raust be included in
the approach at a level of detail sufficient to yield
useful results while keeping the analysis feasibl-e.-
As described in greater detail below, PHB used EPA's
models of the dispersion of pollutants through air, surface
water and ground water. For health effects, Clement Asso-
ciates, Inc. developed measures of the relative toxicity of
each pollutant for different health effects. In both the
exposure and health analyses, the complexity of the problem
was reduced to manageable levels by utilizing reasonable
approximations of these complex phenomena.
Uncertainty
The state of current knowledge about industrial toxic
pollutant problems is incomplete, and there is considerable
uncertainty associated with all the data required to carry
out the analysis. The uncertainty in the available data
increases substantially as one moves from the production
and pollution aspects of the problem to the exposure and
health aspects. Thus, the industry approach must utilize
available data while at the same time evaluating the uncer-
tainty in the results.
In order to assess the reliability of the results, a
sensitivity analysis was carried out. This sensitivity
analysis was designed to determine the factors most critical
to the results and to establish the likely range of results.
Also, in the case study of chlorinated solvents, it was
necessary to perform sensitivity analysis to assess the
effect of generalization on the results.
PRODUCTION AND POLLUTION ANALYSIS
This section reviews the first two major elements
of the industry approach — the production and pollution
analysis. The following pages describe the conceptual
framework and provide an example. Finally, the sources of
data for this analysis are reviewed.
The analysis of production and pollution is based on a
detailed simulation of the operations of facilities in the
industry of interest. Each facility is analyzed as a com-
bination of production processes which are connected by
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material and cost flows. In addition, each process is char-
acterized by the pollutants which it generates and by the
control"options which may be—undertaken.- -Pollution- control
options available to the overall facility, such as combined
water treatment plants or secure landfills, are considered
as well. The overall intent is to understand all possible
modes of plant operation and associated pollution genera-
tion and profitability in sufficient depth to predict the
behavior of plant operators when faced with regulations
and other changes in conditions.
The approach to production and pollution analysis is
based on the following concepts.
* Process; A process is a combination of capital
equipment which is characterized by its input and
output of economic resources. Economic resources
include feedstocks, labor, energy, product, and
so forth. A process can be diagrammed as shown
in Figure 2-1.
• Manufacturing Costs: Manufacturing costs are the
costs of the economic resources directly consumed
at each process to produce a product. For the
purpose of this study we distinguish between
variable costs, which increase as the level of
production increases and are therefore attribut-
able to units of production, and fixed costs
which are incurred independent of production lev-
els and which are not attributable to units of
production except by allocation. The fixed costs
can be avoided, however, by shutting down the
process*
Facilities in any industry are comprised of one or more
processes. Since each process is characterized by specific
material and cost relationships, the economics of any plant
can be built up from a knowledge of which processes are in
use and the capacities of these processes. This informa-
tion, along with data on the unit cost of required economic
inputs (labor, energy and so forth) and the volume and price
of products sold from a given facility allow calculation of
revenues and manufacturing costs for the plant.
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Figure 2-1
A- MANUFACTURING PROCESS
Material Inputs-
Energy Inputs—
Labor Inputs
Process
_^_ Major
Products
-w By-Products
.Pollutants
Recoverable Wastes and Energy
Each process is also characterized by generation of
pollutants in a ratio that is fixed with production. Thus,
analysis of how the plant will operate based on manufac-
turing economics also determines the level of pollution
generated by the plant. In addition, possible pollution
reduction steps based on use of alternative processes, raw
materials changes, produ«ct mix changes and the addition of
pollution control equipment can be examined.
The control equipment available to reduce pollution at
a plant may serve a process, several processes or the entire
plant. However/ all options are characterized by a cost
and a removal efficiency for individual pollutants. Know-
ledge of these characteristics allows the analyst to calcu-
late the least costly way of achieving various levels of
pollution reduction.
A simple example will illustrate the concepts described
above. Exhibit 2-1 presents a diagram of a copper smelter
analyzed during this effort. As seen in this diagram, there
are three key processes: reverberatory furnace, converter
and anode furnace. The inputs and the resulting products
and pollutants are shown for each process. For example,
2316 tons of copper concentrate/ 258 tons of flux, 268 tons
of air, 1506 tons of recycled slag, labor and energy are
combined to produce 2055 tons of copper matte, 1695 tons of
slag and 596 tons of pollutants from the reverberatory
furnace.
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Exhibit 2-1
COPPER SMELTER PROCESS FLOW
(Tons per Day)
O\
I
FUGITIVES FLUCQAS
(24.5) (571.7)
FUOIIIVES FLUE UAS
(2-U) QlW.l)
COtlCEmnATES
(I09S.4)
Source: U.S. Bureau of Mines.
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Once the pollutant flows are defined, the options
available for controlling each pollutant can be determined.
Exhibit 2-2 illustrates the current pollution-controls-orr-a-
typical smelter. As can be seen in this exhibit, the
current controls consist of an electrostatic precipitator
on the reverberatory furnace and converter, and a scrubber
and acid plant for the converter gases.
To control the sulfur dioxide from the converter, most
sraelters remove the particulates from the gas with an elec-
trostatic precipitator, scrub the gas, and then convert the
scrubber fluid to sulfuric acid in an acid plant. The acid
is then sold, neutralized or used in the plant's mining
operations. Fugitives, which are not currently controlled
at most smelters, can be controlled by hoods and ventilation
systems which collect the emissions and emit them into a
stack or into one of the process control systems. In ad-
dition, some smelters currently control pollution by cur-
tailing operations when air quality is poor.
To summarize, the production and pollution analysis pro-
ceeds by developing a process flow for actual or typical
plants in the industry of interest. Data are gathered des-
cribing the material flows, costs, and pollutants generated
at each process and the; pollution control, options available
both at the process and plant levels. In addition, estimates
are made of the likely demand and price levels for products
and the unit costs of the required economic inputs. All of
this information is analyzed to determine pollution levels
and the associated costs and plant cash flow for a wide
range of plant operating conditions. Thus, a schedule of
pollution levels and associated costs to the plant can be
developed.
In general, this analysis is carried out for a partic-
ular year of interest and is based on annual costs and
pollution levels. , This requires that capital expenditures
be converted to an annualized capital charge. The annual-
ization is carried out to equate the present value of the
annualized costs after-tax to the present value of all cash
flows over time resulting from the capital expenditure, in-
cluding the initial expenditure and all tax consequences.
This annualization method assures that the single period
analysis will result in the same control strategies as a
multiyear cash flow analysis.
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Exhibit 2-2
TYPICAL COPPER SMELTER CURRENT POLLUTION CONTROLS^
Acid Plant
Tail Gas
Flue Gas
Scrubber
Electrostatic
Precipitator
Electrostatic
Precipitator
Fugitives
Flue Gas
Fugitives
Reverberatory
Furnace
Matte
Flue Gas
Converter
Acid
Plant
Blister
Copper
Sulfuric
*• Acid
Anode
Furnace
Anodes
Slag
to
Dump
Source: PHB Analysis.
-18-
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Exhibit 2-3 outlines the sources of data used in the
production and pollution analysis for the chlorinated sol-
vents and copper smelting studies. Extensive work was nec-
essary to convert the available data on pollution and
pollution control costs into a consistent format useful for
this analysis. The accuracy of*these data is discussed
in Chapter 3.
EXPOSURE ANALYSIS
Exposure Routes
Once the possible levels of pollution from a plant and
the associated costs are analyzed, the next challenge is to
appropriately estimate population exposure. In this effort
population exposure has been estimated for a number of dif-
ferent routes of exposure.
Exhibit 2-4 diagrams typical exposure routes encoun-
tered in the analysis of chlorinated solvent plants and
will be used to illustrate the exposure analysis undertaken
in this study. These plants discharge air pollutants,
water pollutants and hazardous wastes. These waste streams
often pass through pollution control equipment before release
to the environment.
In applying pollution control equipment, some pollution
is transferred from one medium to another. Application of
water pollution control generates wastewater treatment
sludges and fugitive air emissions. Hazardous waste incin-
eration, which is in common use at these plants due to
profitable chlorine recovery, generates air pollution and
residual waste which must be landfilled.
Human exposure to air pollution is associated with
emissions from process stacks, storage tanks, hazardous
waste incinerators and fugitive sources. As the hazardous
waste incinerators at these plants are throught to have
99.999 percent destruction efficiencies, air emissions from
these sources are negligible. Air quality models are used
to estimate ambient concentrations and population exposure
for the remaining sources.
Exposure to water pollutants is assessed in several
ways. As Exhibit 2-4 indicates, pollutants may be discharged
into surface waters or may be removed and end up in the
-19-
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Exhibit 2-3
SOURCES-OP DATA
Major Element
Production Analysis
Manufacturing Costs
and Process Flows
• Chlorinated Solvents
• Copper Smelters
Data Sources
EPA-OWRS
Stanford Research Institute
Chem Systems, Inc.
Data Resources, Inc.
Bureau of Mines
PEDCo Environmental, Inc.
Pollution Analysis
Pollution and Pollution
Control Costs
• Chlorinated Solvents
1. Air
2. Water
3. Hazardous Waste
• Copper Smelters
1. Air
2. Water
3. Solid Waste
• EPA-OAQPS
• Hydroscience, Inc.
• EPA-OWRS
• Catalytic, Inc.
• Chem Systems, Inc.
• SCS Engineers, Inc,
• EPA-OAQPS
• PEDCo Environmental, Inc.
• Pacific Environmental
Services, Inc.
• None
• PEDCo Environmental, Inc.
-20-
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Exhibit 2-4
TYPICAL '-EXPOSURE" ROUTES
FROM CHLORINATED SOLVENT PLANTS
Air
Emissions
Air
Emissions
Air
Treatment
4
Po
Air
Pollution
Fugitive Air
Emissions
Hazardous
Was
Water
Pollution
Water Pollution
Treatment
Lagoon and
Landfill
Sludge
Leaching to
Ground Water
Drinking
Water
Intakes
Consumption of
Contaminated
Fish
Source: PHB Analysis,
-21-
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sludge or in the air. For chlorinated solvent plants, the
amount of pollution that is found in the sludge is very
small in comparison to the amount discharged into the water
or into the air. Many of the water pollutants are highly
volatile and are transferred into the air as a result of
water treatment processes or volatilization from surfa'ce
waters. These emissions are added to the fugitive air
emissions from the plant, and population exposure is calcu-
lated using air pollution models.
Exposure to the pollutants which are not volatile and
remain in the water is assessed in two ways. First, pol-
lutant concentrations and population exposure are estimated
for each drinking water supply downstream of the plant.
Second, accumulation in the food chain can also result in
additional population exposure. Consumption of contamin-
ated fish is the only food examined in this analysis since
adequate data are not available for other foods. Water pol-
lution is not analyzed in the copper smelter study because
most smelters have zero discharge. Smelters located in the
desert often recycle all water for economic reasons.
The disposal of hazardous waste in sanitary landfills
and lagoons can result in contaminaion of ground water.
Exposure will result from drinking water supplies drawn from
contaminated wells. This exposure route is examined in a
rudimentary manner because little is known about movement
of contaminants in ground water.
In the chlorinated solvent analysis PHB examined all
major routes of exposure. However, in the copper smelter
case study two exposure routes have not been examined. An
adequate model for predicting the movement of metals in
ground water is not available and consequently this exposure
route was not analyzed. Local health officials believe
ingestion of dust which contains trace quantities of heavy
metals is a principal source of exposure to children. This
source of exposure was also not examined due to a lack of
readily available data.
-22-
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Exposure Analysis Methods
As described -above-, the -principal-- exposure --routes
examined are:
• Air exposure,
• Contamination of surface water and subsequent
drinking water exposure,
• Exposure through fish consumption, and
• Ground water exposure.
Ambient concentrations and population exposure for each
route are estimated by employing several mathematical models
which are briefly discussed below and are described more
fully in Appendix B. EPA models were used whenever avail-
able. Monitoring data were used to provide estimates of
background concentrations in air and water.
Air Exposure
For the chlorinated solvents industry, SPA's Human
Exposure Model (HEM) was used to calculate annual average
concentrations and the population exposed to various con-
centration levels. For copper smelters, EPA's Industrial
Source Complex Model (ISCM) was used to derive annual
average ambient air concentrations. The output of this
model was then transferred to the HEM to calculate the
population exposed to various concentration levels.
The HEM was developed specifically to model organic
chemical plants and is designed to determine the population
exposed to various levels of pollutants. The ISCM was
used for the copper smelter study since the HEM was not
designed to model sources with tall stacks such as those
found at smelters. The ISCM is used to assess the air
quality impact of emissions from a wide variety of indus-
trial sources.
Surface Drinking Water Exposure
Exposure from surface drinking water has been deter-
mined by identifying all drinking water intakes downstream
of each plant together with the number of people served by
-23-
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these intakes. Incremental chemical concentrations at the
drinking water intakes have been evaluated using a mathe-
matical model which- reflects both the characteristics _o.f
the waterway (such as flow and velocity) and the volatili-
zation rates of individual chemical pollutants. Further,
it was assumed that the concentration in the drinking water
was equal to the concentration at the drinking water intake,
and hence no additional volatilization or chemical trans-
formation would occur as the drinking water undergoes
chlorine disinfection and transportation to consumers.
•
Exposure Through Fish Consumption
Exposure from contaminated fish has been determined by
estimating the amount of fish caught for human consumption
downstream of each plant. The average daily intake of fish
has been assumed to be 6.5 grams per person, consistent
with the assumptions used in the Water Quality Criteria
Documents. The source of information on quantities of
fish caught for human consumption in various geographical
areas is the Department of Commerce publication entitled
Fishery Statistics of the United States, 1976.
Ground Water Exposure
The mathematical model which calculates the level of
ground water contamination resulting from landfill of haz-
ardous waste is based on; a method devised by EPA.* The
ground water model takes into account migration and degrada-
tion of the pollutant. Exposure is estimated by accounting
for the number of people who drink ground water in the
vicinity of each plant. This model is the most uncertain
of the exposure models used in this study. Research is
currently being done by EPA to gain a better understanding
of the movement of contaminants through ground water. Appen-
dix B provides a more detailed description of the formulas
used in the model and discusses the limitations of this
approach.
Falco et al., "A Screening Procedure for Assessing the
Transport and Degradation of Solid Waste Constituents in
Subsurface and Surface Water," to be published in Pro-
ceedings of the Society of Environmental Toxicology and
Chemistrv.
-24-
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HEALTH EFFECT ANALYSIS
Health Effect Incidence
. Once the number of people exposed to various levels
of pollution is estimated, the next step is to determine
the health effects that would result from that exposure.
Ideally, one would like to know the portion of the people
exposed to a given level of pollution who would experience
certain health effects. For example, one would like to know
that 2 percent of the people breathing concentrations of
sulfur dioxide in excess of 300 ug/m^ would develop respira-
tory problems. Unfortunately, the available information on
the health effects at low dose levels does not permit the
derivation of such an incidence measure. To compare the
effects of different exposure levels, this effort has
developed a scoring system which measures the relative risk
of certain health effects from certain pollutants.*
The pollutants of concern have been evaluated for the
following eight health effects:
• Carcinogenicity,
• Teratogenicity,
• Reproductive Toxicity,
• Mutagenicity,
• Hepatotoxicity,
• Renal Toxicity,
• Neurobehavioral Toxicity, and
• Toxic effects on other organ systems such as
respiratory effects.
The relative risk measures (scores) for each pollutant are
based on the use of mathematical models for low dose extra-
polation. Clement Associates have assumed a linear dose
* Clement Associates, Inc. developed the risk scores for
this study. Their approach is described in Appendix C.
-25-
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response relationship.* Thus, one of the following curves
was derived for each health effect and each pollutant.
Figure 2-2
RELATIVE PROBABILITY OF HEALTH EFFECT INCIDENCE
Proba- 1
bility
Proba- 1
bility
Dose
Dose
Wo Threshold
Threshold
The scoring system developed uses very crude models
to estimate -incidence. The use of these linear models has
not gained acceptance for effects other than cancer. Thus,
in absence of a better understanding of dose-response rela-
tionships it cannot be claimed that the scores are an ab-
solute measure of risk.
The relative risk measures do allow tradeoffs to be
made across pollutants and across health effects. For
example, the same score for renal toxicity for both arsenic
and lead implies that a person is equally likely to get
the effect front either substance. The same score for
arsenic on renal toxicity and neurobehavioral toxicity
implies that a person is equally likely to develop either
health effect. However, in neither case can the absolute
number of cases of renal toxicity or neurobehavioral tox-
icity be determined.
Where data are not available to score a specific health
effect and a particular pollutant, a score of zero has been
assigned. This practice gives higher weight to pollutants
which have been subject to toxicological studies. In other
cases, a score of zero was assigned because either data
indicated zero risk or the quality of the data was too poor
to estimate risks with any confidence.
* A dose-response relationship quantifies the increased
risk of contracting an effect as a function of the
dose of the pollutant received.
-26-
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It is important to recognize that the uncertainty asso-
ciated with Clement's dose-response estimates is quite large.
The approach used for estimating cancer risks is generally
accepted, however, the estimates may be high or low by an
order of magnitude.. The risk estimates for other healtjh
effects may well be less certain than those for cancer.
Health Effect Prioritization
Once population exposure and relative risk measures
have been calculated, the relative incidence levels of each
health effect can be determined. As the eight health
effects may have different consequences and. imply different
control strategies, decision makers need to make tradeoffs
among them. . Since there is no unique and objective means
of prioritizing the health effects, several sets of weights
have been developed to assist decision makers explore the
consequences of specific tradeoffs. This section reviews
the development of alternative weights.*
The following methodology was employed to develop
several sets of weights. First, the eight" health effects
of concern were classified into broad health categories
for which data are collected by the National Center for
Health Statistics. Second, data were collected on the con-
sequences of each of these health categories.** Alternative
sets of weights were then developed based on data for the
following consequences:
• Loss of life expectancy per case,
• Direct cost of treatment per case,
• Lost compensation per case,
* The derivation of these weights is described in detail
in Appendix D and is based on work performed by Dr.
Milton Weinstein of the Harvard School of Public Health.
** Much of the data on treatment costs and lost compensation
are found in B. S. Cooper and D. P. Rice, "The Economic
Cost of Illness Revisited," Social Security Bulletin 39
(1976): 21-36.
-27-
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Quality of life lost per case, and
Loss of quality-adjusted life expectancy per
case.*
Exhibit 2-5 indicates the ordering of the broad disease
categories along the five consequences described above.
Exhibit 2-6 lists the three sets of weights used in the
analysis. The weights in Exhibit 2-6 are derived by map-
ping the weights in Exhibit 2-5 into the eight specific
health effects of concern. The number in parenthesis in
the first column in Exhibit 2-6 corresponds to the appro-
priate disease category from which the weight is derived.
For example, neurological disorder corresponds to the
broad category of diseases of the nervous system. Thus,
the quality of life lost weight for neurological disorders
corresonds to the quality of life lost weight for diseases
of the nervous system. The weights in both exhibits have
been normalized to sum to one. EPA selected the quality of
life weights for use as baseline weights in this analysis.
Chapter 4 discusses the results of the analysis using each
set of weights.
The discussion above briefly describes the procedures
used to estimate relative risk of health effects given_the
human exposure estimates developed earlier. In addition,
a method of prioritizing health effects through assigned
weights has been outlined. When combined with the procedures
described earlier, this information allows the analyst to
evaluate alternative pollution reduction strategies in terms
of cost and associated reduction in relative health risk.
INTEGRATION OF PRODUCTION, POLLUTION,
EXPOSURE AND HEALTH ANALYSES
The sections above have described the four major
elements of the industry approach: production, pollution,
exposure and health analyses. Although these elements have
been described separately, the great strength of the approach
is that all are considered together. As described in
* These weights, while very subjective, are an attempt to
capture not only the years of life lost but the number
of years spent in the diseased state.
-28-
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VO
I
Exhibit 2-5
PRELIMINARY INDEX OF DISEASE CONSEQUENCES
Years of Treatment Economic Quality-of-Life Quality-Adjusted
Basic
1.
2.
3.
4.
5.
6.
7.
Disease Categories Life
Neoplasms .
Congenital Anomalies
Diseases of Nervous
System
Diseases of
Genitourinary System
Diseases of Digestive . .
System
Diseases of Respiratory
System
Complications of
Pregnancy & Childbirth
1.
Lost
50
34
07
03
04
03
0
00
Costs
.24
.07
• .32
.18
.09
.06
.04
1.00
. Costs*
.37
.15
.25
.09
.07
.06
.01
1.00
Lost
.13
.28
.21
.08
.12
.16
.01
1.00
Life Expectancy
.39
.32
.11
.04
.06
.07
0
1.00
* This category includes treatment costs and lost compensation due to morbidity and mortality.
Source: Plin Analysis.
-------
Exhibit 2-6
ALTERNATIVE WEIGHTS FOR EIGHT HEALTH EFFECTS
Average of Years
of Life Lost and Quality-of-Life
Health Effect*
Cancer (1)
Mutagenicity (2)
Teratogenicity (2)
» Neurological Disorder (3)
LA>
o
1 Reproductive Toxicity ((2) t (7)) i 2
Kidney Disease (4)
Hepatotoxicity (5)
Other (6)
Economic Costs
.3i
.17
.17
.13
.09
.05
.04
.03
1.00
Lost
.09
.20
.20
.15
.10
.06
.09
.12
1.00
Equal
.125
.125
.125
.125
.125
.125
.125
.125
1.00
Numbers in parentheses correspond to disease categories in Exhibit 2-5,
Source: PHD Analysis.
-------
Chapter 1, this allows consistent assumptions to be used
throughput the analysis and insures that all relevant
issues ~are""included.
In order to carry out the approach, the analyst must
first study the industry of interest to ascertain typical
production configurations/ regions of operation, and likely
toxic pollutant problems. The analyst then decides whether
to work with actual or typical plants and exposure routes.
This decision is based on time and resource constraints,
data availability and other factors. Specific plants to be
analyzed are then configured.
Once plants are configured, the analyst carries out
the production and pollution elements. This requires devel-
opment of the material flows, manufacturing costs, pollutant
levels and pollution control options. Using these data,
the analyst determines all of the .possible levels of pollu-
tion and the associated costs to the plant. In so doing,
it is assumed that plant operators will seek to maximize
the net present value of the cash flow generated by the
plant. Thus, for any mandated ilevel of pollution reduction
the plant will select that combination of control options
which meets the pollution requirement while having the
least possible effect on cash flow. Again, control options
can include installation of control equipment, changes in
raw materials or product mix, and partial or complete
process shutdowns.
The next step in the approach is to determine the human
exposure that will result from these pollution levels. As
described in this chapter/ a variety of mathematical models
are used to convert pollutant quantities to concentrations
in the media and region of interest. These estimates of
concentration are combined with population data to deter-
mine the number of people exposed to different concentra-
tions. When generalized plants and regions are used, the
exposure analysis is based on typical values for input data
such as source characteristics, meteorology, population
density and so forth.
Finally, the likely health effects arising from the
predicted exposure levels are developed, and health effects
are combined into overall metric using the health weighting
schemes described. These health effects can be traced to
the specific level of pollution and associated costs incur-
red. Thus, reduction in health risk can be related directly
back to the costs incurred for pollution control by the
industrial plant.
-31-
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When the industry approach is applied to particularly
complex industries, mathematical programming can be used to
automate the required calculations. By using math program-
ming, all of the material, cash, and pollutant flows can
be traced. The model simulates the operating decisions
made to maximize the value of the plant's cash flows.
Constraints on the quantities of pollutants emitted or on
the relative health risk levels arising from the pollutants
emitted can be applied. The model will then choose the
most cost-effective combination of pollution control options
to meet these constraints.
The advantage of a mathematical program, in addition
to automating the calculations, is that is ensures that the
analysis simultaneously accounts for costs and risks. It
also forces the analyst to consider pollution control
options, such as process shutdowns and raw material substi-
tution, which are often not considered.
The chlorinated organic solvents industry is suffi-
ciently complex that PHB developed a math programming formu-
lation to assist the case study of this industry. ; Appendix
A includes a description of math programming and the; detailed
equations that were used in the chlorinated organics case
study. It was not necessary to develop a math program to
analyze the copper smelting industry.
CUMULATIVE ECONOMIC IMPACTS
The industry approach considers the cost of environ-
mental control options at the plant level. In evaluating
environmental policies, analysts must also consider other
measures of impact such as changes in employment, price
levels and firm and industry profitability. Likely employ-
ment changes will be apparent if partial or complete plant
shutdowns are selected as a control option or if overall
plant cash flow is insufficient to allow continued opera-
tions. Estimation of profitability and price impacts re-
quire further analysis.
Profitability
The plant focus of the industry approach requires
that cash flow be the primary cost metric since management
will try to maximize the cash flow which results from plant
-32-
-------
operations. Thus, management will select those activities
and control options which maximize the cash flow from the
plant while meeting -whatever--regulatory and economic . con-_
straints are in force.*
In order to estimate profitability, an income statement
must be derived from the cash -flows. Individual plant in-
come statements can then be aggregated to firm or industry
statements. The cash flow estimates can be converted to
an income statement in the following manner.
• Delete annualized pollution control capital costs
from the cash flows to arrive at the plant's
gross margin.
* Subtract the depreciation charges and interest
charges resulting from the invested capital in
production and pollution control equipment from
the plant's cash flow. This step requires that
an estimate be made of the age and book value of
invested capital (including working capital) re-
quired by the plant and the capital structure
which supports this investment.
• Subtract the plant's share of corporate selling,
general and administrative expenses- and other
corporate overhead expenses,
• Estimate taxes based on the typical or actual cor-
porate tax situation experienced in the industry.
* Average annual cash flow is used in the first four steps
of the approach. This cash flow equals revenues less
operating costs, annualized pollution control capital
costs, and pollution control operating and maintenance
costs. The pollution control capital costs are annual-
ized in a manner which equates the present value of the
annualized costs after-tax to the present value of the
capital costs less subsequent tax effects (depreciation
tax shield and investment tax credit). This annualization
assures that the single period analysis will result in
the same control strategies as a multiyear cash flow
analysis.
-33-
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The resulting income statement provides an estimate of the
plant's after-tax profit. The use of this income statement
is further discussed in Chapter 3.
Price
All of the analysis described thus far has assumed
constant prices for the products of the plant under consi-
deration. However, as producers incur costs to reduce
pollution they are likely to increase prices to some extent
in order to recover some of these costs. The extent to
which such price increases benefit the producer is deter-
mined by the price elasticity for each product. Price
elasticity measures the likely reduction in demand brought
about by increases in price.
Actual price elasticity figures are difficult to esti-
mate and are available for few industrial products. When
estimates are available, the.approach can be carried out
through several iterations to allow price levels to stabilize
based on the selection • of control options and resulting
costs.* When no estimates are available, constant prices
are assumed in order to be conservative in overestimating
rather than underestimating cost impact.
In considering economic impacts in the absence of
price elasticity data, it is useful to calculate the maximum
price increase that might be needed. The price increase
required to maintain profitability can be calculated by
deriving the additional revenue needed to arrive at the
same level of profit. The additional revenue needed will
be t
AREV * A prof it
(l-Tax)
Where: AREV » increase in revenue required
AProfit = decline in profits experienced
Tax - corporate income tax rate
In addition, if price elasticity information is available,
the decline in demand which results from any given price
increase can be calculated.
Changes in product prices may in turn change the selection
of control options, thus making several iterations neces-
sary.
-34-
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FORM, INTERPRETATION AND USE OF RESULTS CHAPTER 3
INTRODUCTION
The industry approach described in Chapters 1 and 2 can
be used in several ways for economic and policy analysis.
The approach can be modified as needed in specific applica-
tions, and thus may produce different kinds of results.
There are two uses of general interest:
• Cost-effectiveness analysis, and
' • Analysis of cumulative economic impacts.
Cost-effectiveness analysis consists- of the simultan-
eous consideration ofenvironmental damage (limited in the
work to date to human health risk) and cost. One of the
major outputs of the industry approach is a "cost-effective-
ness curve" for an actual or typical industry plant. Cumu-
lative economic impact analysis is based on the consider-
ation of all environmental regulations and control options,
and the resulting impact on industry profitability, employ-
ment, and other economic variables.
The purpose of this chapter is to explain the use of
the industry approach in performing each of these types
of analysis, review the major limitations of the approach
and discuss methods of sensitivity analysis. The remainder
of the chapter is organized in the following sections:
-------
• Cost-Effectiveness Analysis,
• Cumulative Economic Impact Analysis,
• Major Limitations of the Approach, and
• Sensitivity Analysis.
COST-EFFECTIVENESS ANALYSIS
Cost-effectiveness analysis considers the cost and
effectiveness of an alternative in meeting a specified
goal. Alternatives that are most cost-effective will pro-
duce the greatest progress toward the goal per unit of cost
incurred. In carrying out such analysis, it is important
to understand the definitions of cost and effectiveness
being employed.
Definition of Cost and Effectiveness
In the industry approach, PHB has defined the cost of
an environmental control option to equal the sum of:
• The net decrease in a plant's gross margin (re-
venue less manufacturing costs) caused by imple-
mentation of the option, and
• The net increase annualized capital charges in-
curred due to capital expenditures required by
the option.
Gross margin reduction includes additional operating and
maintenance charges for control equipment, and the cost
impact of changes in production operations, raw materials
and other alterations in manufacturing which occur to
reduce pollution. Annualized capital charges are computed
to equal the annual equivalent of the cash flows resulting
from a capital expenditure including the original expendi-
ture, tax consequences and the required return to debt and
equity financing.
PHB has defined the effectiveness of a given environ-
mental control option, for present purposes, to be the per-
centage reduction in health risk. Percentage reduction
can be considered for each of the eight health effects or
for a "total" health effect which reflects a weighting of
-36-
-------
the eight. Again, it is important to note that health
risk reduction is a relative reduction as compared to
the uncontrolled case. Absolute incidence levels are not
estimated due to the limitations of currently available
toxicological data.
The Cost-Effectiveness Curve
Exhibit 3-1 presents a typical cost-effectiveness curve
that results from the industry approach. The curve shows
the cost of achieving, through a combination of pollution
control options, a given level of health risk reduction.
Note that cost increases relatively slowly up until the
80 percent risk reduction point and increases dramatically
thereafter. This is a typical result which reflects the
initial ease with which pollutant levels can be reduced
from uncontrolled levels, the increasing difficulty due
to declining efficiency thereafter and the rapid increase
in cost which occurs as the last amounts are controlled.
In this last segment of the curve, control usually takes
the form of partial or complete plant shutdowns.
The cost-effectiveness curve describes the optimal
control strategy for each level of risk reduction because
the most cost-effective combination of control options is
employed at; each point of the curve. The origin _ in Ex-
hibit 3-1 represents the uncontrolled case in which the
plant is allowed to operate without any limitation on
pollution levels or health risk. At point A of the _curve
"(10 percent'-risk reduction over the uncontrolled condition)
there might- be a mix of control options for the major
polluting processes. At point B (80 percent risk reduction)
full control of all processes might be in place. At point
C (90 percent risk reduction) some processes may have been
shut down, thus resulting in a steeper increase in cost.
Because different pollutants give rise to different health
effects, the cost-effectiveness curve for different health
effects might have varying shapes and sequences of treat-
ment options. For example, the curve for cancer would
reflect the selection of the control options which limit
carcinogenic emissions. Other options might be selected
for other health effects which are caused by different
pollutants.
Although both the chlorinated organics and copper
smelting industries have some control equipment in place,
the development of cost-effectiveness curves carried out to
-37-
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Exhibit 3-1
A TYPICAL COST-EFFECTIVENESS CURVE
Cost
(000 $)
10%
50% 80% 90% 100%
Health Risk Reduction (%)
-38-
-------
.date has proceeded as if no equipment were presently in-
stalled. This approach has been taken because the control
cost estimates available to PH3_are stated based on new
installation rather than on incremental improvements to
equipment already in place. The result of this approach
is that the order of control option selection is that
which would occur if the plant were beginning with no
equipment rather than modifying its existing equipment.*
It is useful to compare the cost-effectiveness of al-
ternative regulatory policies against the cost-effectiveness
curve. For example, a policy which mandates an overall
reduction in the emissions of a given pollutant from all
sources within a plant will have a certain cost and result
in some reduction in health risk. This policy can be anal-
yzed and a point plotted as in Exhibit 3-1, point D. Note
that the risk reduction level achieved is 50 percent and
that a more cost—effective position on the curve would
achieve the same risk reduction at a significant savings
in cost. Point D represents a policy alternative that
is far less cost-effective than the maximum cost-effective-
nes's represented by the curve. Point E, however, is an
alternative that is quite close to the curve. Any policy
alternative can be compared to the cost-effectiveness curve
in this way. Because the curve represents the most cost-
effective way to achieve a level of risk reduction, the
most cost-effective policy can at best be on the curve,
and not below it. Many alternatives will be above the
curve.
CUMULATIVE ECONOMIC IMPACT ANALYSIS
Cumulative economic impact is often considered by
analyzing:
• profitability and capital availability,
• Likely price increases and inflation impacts, and
• Employment changes and plant shutdowns.
* It would be possible to develop engineering cost esti-
mates for retrofit improvements to equipment in place,
The cost-effectiveness analysis could then consider mod-
ifications to plant's existing equipment.
-39-
-------
These impacts are analyzed foe specific regulations or
groups of regulations rather than for all points on the cost-
effectiveness curve, _and often are considered for a period
of years rather than a single year. Further, the analysis
is frequently carried out at the firm or industry level
rather than at the plant level. Thus, #results from plant
analyses must be aggregated.
Profitability and capital availability can be analyzed
through direct reference to income statements developed
from the industry approach. Such income statements, cal-
culated for each period of interest, will show profitability
of the plant, firm or industry directly. Capital availabil-
ity is closely linked to profitability since profits provide
a major portion of internally generated capital and allow
firms access to the capital markets for both debt and equity
funds. Thus, significant reductions in profitability will
adversely impact a firm's ability to raise capital through
both internal and external sources.
Price increases and resulting inflation impacts are
perhaps the most difficult impacts to analyze. Both the
cost-effectiveness analysis and the profitability analysis
rely on estimates of product prices. However, if these
analyses indicate major costs or reductions in profit, new
assumptions may need to be made about product price and
quantity and the analysis carried out a second time. In
short, the price elasticity for products must be considered.
The final cost-effectiveness curves and income statements
derived from the approach will be based on assumptions about
price elasticity and prices. These assumptions play a major
part in determining profitability impacts and employment
impacts and plant shutdowns.
Once likely price behavior is determined, the overall
impact on inflation can be estimated by calculating the
increase in various price indices (Producer Price Index,
GUP Price Deflator) due to the increase in product prices.
Such an approach ignores the effects of these price in-
creases on other commodities in the economy (the multiplier
effect); these secondary effects can be examined if desired.
Finally, employment changes and plant shutdowns can be
analyzed by comparing the cash flow generated from plant
operations less required reinvestment in the plant with the
plant's salvage value and the potential earnings on the
firm's capital in other uses. When analyzing an industry,
-40-
-------
marginal plants can often be identified for further analysis
based on s.ize, age, outmoded technology and so forth. Em-
ployment losses will result both from the shutdown^ of mar-
ginal plants and from the partial shutdowns that "occur' at
other plants.
MAJOR LIMITATIONS OF THE APPROACH
The major limitations of the industry approach are re-
lated to the problems of diversity, complexity and uncer-
tainty. As described in Chapter 2, PHB has attempted to
generalize and simplify in order to meet the first two
problems, and has carried out sensitivity analysis in the
actual cases analyzed in order to estimate the range of
uncertainty in the results due to these steps as well as
the uncertainty in the input data. The major limitations
are discussed below.
Diversity and Generalization
The diversity of industrial facilities, exposure routes
and health effects has been mitigated in the actual case
studies by carrying out the analysis on a set of typical
plants or exposure routes where necessary, and considering
only eight health effects. As discussed previously, the
consideration of health effects only clearly limits the
present ability of the approach to find optimum strategies
for reducing environmental effects. However, these addi-
tional effects can be added to the approach as data become
available and interests dictate.
The need to generalize industrial facilities and
exposure routes, is the first basic source of limitations
and depends almost completely on the characteristics of
the specific industry. For example, the application of the
approach to the chlorinated organic solvents industry —
a highly complex process industry — requires extensive
generalization of plant configurations and exposure routes.
On the other hand, the copper smelting case requires
little generalization of plant configurations due to a
relatively small number of fairly simple plants of interest.
Nevertheless the copper smelter study did require some
generalization of exposure routes.
-41-
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Complexity and Simplification
The simplifications.... required are the second ba_sic_
source of limitations. The simplified industrial facilities
and pollution control options considered are not thought
by PHB to be major limitations in the approach. However,
the simplifications required to allow analysis of exposure
routes and health effects are more serious. Each of these
is discussed below.
The mechanisms through which human populations are
exposed to industrial discharges of pollution are highly
complex, and current understanding of them is not complete.
To analyze these routes, PHB utilized a number of air qual-
ity, water quality and ground water models available to
EPA or developed for this effort with SPA staff. These
models vary considerably in their accuracy.* For example,
air quality models are generally the best developed and
most accurate, and exceed water quality models in perform-
ance. Both air and water quality models far exceed the
current capabilities of ground water models. Although the
limitations of air and water quality models limit the
accuracy of the results, PHB believes that these models
yield results appropriate to the objectives of this effort.
However, the ground water models used are sufficiently im-
precise to require extreme caution when evaluating the
hazardous waste aspects of the analysis.
The "other major complexity that has been simplified
in the industry approach concerns the incidence of health
effects. As explained previously, the industry approach
does not predict absolute incidence or changes in incidence
of health effects, due to the uncertainty in toxicological
data. Should improved data become available, the industry
approach would allow calculation of the cost per case
avoided. This cost could then be compared to estimates
of the benefit of such avoidance in order to determine the
level of reduction in health risk which can be justified
on a cost-benefit basis. At the present time, however,
such analysis cannot be carried out and thus the overall
level of risk reduction desired must be based on Agency
judgment. Given the selection of this level, however, the
industry approach indicates the most cost-effective way
to meet the health risk reduction goal.
* See Appendix B for a further discussion of this issue.
-42-
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Data Uncertainty
The final source of limitations in the approach is the
level of uncertainty in the required input data and the re-
sulting uncertainty in the results. The level of uncertainty
in the data is largely a function of the industry of interest,
and general limitations based on this uncertainty are hard
to develop. In both of the case studies, estimates of the
uncertainty have been developed using methods described
below. In addition, estimates of the uncertainty in the
relative risk scores for different health effects have been
developed and are reported below.
SENSITIVITY ANALYSIS
The industry approach has combined the available produc-
tion and pollution data with the available exposure and
health data to allow the identification of the most cost-
effective methods to minimize health risks. In so doing,
data of varying accuracy are combined to arrive at a cost-
effective strategy for reducing risk. This discussion of
sensitivity analysis reviews the potential sources and
magnitude of uncertainty, and outlines the approach used
to measure the sensitivity of the results to these uncer-
tainties.
Sources of Error
Exhibit 3-2 identifies the models and data used in
each component of the problem. For each, an assessment
was made of accuracy. As shown in Exhibit 3-2, process
flow data, manufacturing and pollution control costs, and
emission factors are all regarded as accurate to ±30 to
35 percent. This is the standard error found in engineer-
ing studies which are done without detailed laboratory
work or field visits.
The models used in the exposure area are less accurate.
The air models, while regarded as the most advanced and
thoroughly tested, are reliable to only ^150 to 500 percent.
The water models are thought to be less accurate, but are
assumed to have errors of j^SOO percent. Finally, the
ground water exposure model is a very crude representa-
tion of a phenomena which is not well understood. As such
the actual exposure could be an order of magnitude higher
or lower than estimated.
-43-
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Exhibit 3-2
ACCURACY OF MODELS AND DATA
Problem
Component
Models and
Data Used
Accuracy of
Models and Data
Production Analysis • Process Flows
• Manufacturing
Cost Data
30 to 35%
Pollution Analysis
• Emission Factors
• Pollution Control
Equipment Costs
+ 30 to 35%
Exposure 'Analysis
Models and Data Meas-
uring Dispersion of
Pollutants:
• Air
• Water
• Hazardous Waste
* 150% to 500%
* 500%
Order of Magnitude
Health Effects
Toxicity Scores Order of Magnitude
Weighting of
Health Effects
No Correct Answer;
Matter of Judgment
-44-
-------
The data employed in the health effects area are also
uncertain. The available toxicology information is incom-
plete and, in some, cases, contradictory. Clement Associates
has stated that an order of magnitude error is inherent
in the health effect scores. In the analysis, these scores
are weighted to achieve a single health risk. The weighting
of the scores is highly subjective and no "unique" weighting
scheme exists.*
Sensitivity Analysis Method
In carrying out sensitivity analysis the* distribution
about the results could be derived by analyzing many com-
binations of data. One method of doing this is to: 1)
determine the distribution about each of the parameters
in the analysis, 2) randomly select a point estimate from
each distribution, and 3) derive the cost-effective control
strategy given these point estimates. Steps 2 and 3 would
be repeated many times resulting in a distribution of cost-
effective control strategies. This "Monte Carlo"_ simula-
tion is expensive and time consuming in practice and,
therefore, has not, been employed in this study.
To gain insight into the likely uncertainty of the
results of the chlorinated.' solvent and copper smelting
cases, extreme values have been selected for several impor-
tant parameters and the analysis has. been carried out
using'these values. If the results of the analysis are
insensitive to these changes, then the analyst gains confi-
dence in the results obtained. The extreme values tested
are described below, and results of these sensitivity
analyses are summarized in Chapter 4 and the industry
briefing packages. Two extreme value analyses were per-
formed :
1. Alternative exposure measures were tested.
2. Health effects regarded as highly uncertain were
eliminated.
The weights are not regarded as a source of error. Al-
ternative weighting schemes were discussed in Chapter 2,
and the effect of these alternatives is described in
Chapter 4.
-45-
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Alternative Exposure Measures
As shown in Exhibit 3-2, the exposure measures are not
as reliable as the production"and pollution data. In order
to determine whether differences in exposure levels would
result in different cost-effective control strategies, the
following alternative levels of exposure were used in the
chlorinated solvents model.*
• Air exposure was reduced 50 percent.
• Water exposure was doubled.
• Hazardous waste exposure was increased tenfold.
These alternative exposure levels were chosen since air
exposure has the greatest impact on risk. Increasing air
exposure would add further support to the current results.
The aim in this analysis is to determine whether increased
risk in the water and hazardous waste area would change the
cost-effective pollution control strategy. The results of
these alternative levels of exposure are given in.Chapter 4.
Alternative Health Effects
As stated above, the health effect scores for pollutants
are highly uncertain. Clement Associates estimated the level
of uncertainty associated with each measure of relative risk
by assigning each score a value of 1 to 4, with 1 represent-
ing the least amount of uncertainty and 4 the greatest amount
of uncertainty. The uncertainty levels are defined in Table
3-1. Of Clement's 109 relative risk measures, only 12.8
percent were assigned a level of uncertainty of 1 and 16.5
percent were assigned an uncertainty level of 2. The bulk
of the risk measures (58.7 percent) were assigned an uncer-
tainty level of 3; the remaining 11.0 percent were assigned
a level of 4. Exhibit 3-3 provides Clement's estimated
level of uncertainty for each relative risk measure.
This analysis was not performed on the copper smelting
industry since exposure to water pollutants and hazard-
ous waste was not included in that study.
-46-
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Figure 3-1
DEFINITION OF UNCERTAINTY LEVELS
Level of Uncertainty Criteria
1 Adequate human epidemiological
data.
2 Several adequate animal studies
with quantitative dose-response
data.
3 Only one adequate animal study;
poor dose-response data.
4 Gross assumptions were made.
To determine the cost-effective strategy which would
result if only the more certain health effects were con-
sidered, all pollutant/health effect combinations with a
level of uncertainty of 3 or .4 were eliminated from the
analysis. Again, the results of this analysis are provided
in Chapter 4.
Generalization
One further sensitivity analysis was carried out in
addition to the extreme value analyses described above.
When generalized plant configurations or exposure routes
are used, uncertainty can be created by the act of gener-
alizing. In the case study of the chlorinated solvents
industry one generalized plant was used to represent seven
actual plants on the Mississippi River. To analyze the
accuracy of this generalization, each of the seven plants
was analyzed individually and the results were added.
The sum of the seven plants was compared to the generalized
plant to determine the validity of the generalization.
The results of this analysis are reviewed in Chapter 4.
-47-
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Exhibit 3-3
ESTIMATED LEVEL OF CERTAINTY FOR HEALTH SCORES
(1 = Highest Certainty, 4 = Lowest Certainty)
1 . • •
Arauulc
bfll*VI>U
II IK {2-ttihylliexyl) i>litl>Hlata
n-ltuiyl cUliifitlu mill
•uf~lliityl clilurldd
itillllllllllll ,
C.irlioii 1 u» rnclilor Jilc
(IliliU'uittrin
2-i:i,iui,,,.i,L.iioi
1 «:I,KM,,I.,W
00
I lll-M-biilyl |i|iili.il.1ltt
t , l-Diuliloroxl luiim
i,4-l)l.:MJro|.lK:iH.|
lLl-l»lt:lll..r..|ir.i|.unu
1:1 !,«,.«
l.lliyl Uiluil.le
Kt.liy leuu
Ktliyluiiu dlclilm Ide
Kluorenu
lluxarli 1 in olioiu.'m:
IU::
-------
Exhibit 3-3
(Continued)
ESTIMATED LEVEL OF CERTAINTY FOR HEALTH SCORES
(1 « Highest Certainty, 4 = Lowest Certainty)
I
*>.
VO
I
" ^ t fi —I m
He i It y 1 til lie (*
htiitocliloruiictit y tune
Nlckul
Sul fur tl Ion lilc
T*ii i;u**Mot;i»utliy leita
Trmit* /c J tf-itlcli 1 oi o«t Ity 1 uiiti
1 I I- 1 1 It MiHuelhaiui
1 1 2-Tr iclilnruulhuiie
Tr Ichloruui liylcitc
Vinyl CMurUlx
Vinyl l
-------
INDUSTRY APPLICATIONS CHAPTER 4
INTRODUCTION
The industry approach.to toxic pollutant control des-
cribed in Chapters 1, 2 and 3 has been applied to the chlo-.
rinated organic solvents and copper smelting industries..
The chlorinated solvents industry is a segment of the organ~
ic chemicals industry and produces a number of chemicals;
that are used in other major sectors of the industry (plas-
tics, silicones, fluorocarbons) as well as used directly
for their solvent properties. In addition, the chlorinated
solvents industry represents a complex process industry
with a variety of plant locations and associated exposure
routes. The chlorinated solvents industry is in relatively
good financial health.
The copper smelting industry is a segment of the copper
raining, smelting and refining industry, and produces anode
and "fire-refined copper. The copper smelting industry _ is
less diverse and complex than the chemicals industry with
respect to production facilities and exposure routes, but
nevertheless poses some interesting and difficult environ-
mental problems. Further, the industry is experiencing
financial difficulties.
The detailed results of PHB's analysis of these two in-
dustries are presented in briefings which are included_under
separate cover. This chapter presents a short description
of each of these industries and a summary of the results
for each case study. In the material to follow, the chlorin-
ated organic solvents case study is discussed first, followed
by the copper smelting case study.
-------
CHLORINATED ORGANIC SOLVENTS INDUSTRY
This section of- Chapter-4 summarizes the results of
PHB's application of the industry approach to the chlorin-
ated organic solvents industry. The section is organized
as follows:
• Description of Industry,
• Pollution Problems of Concern,
• Cost-effective Control Strategies,
• Alternative Policies Examined
• Cumulative Economic Impacts, and
• Se-nsitivity of Results.
Description of Industry
The chlorinated organics case study focuses on the
production of a group of chloromethanes and chloroethanes.
Most of the processes used to produce these products .in-
volve chlorination reactions. Exhibit 4-1 shows the proc-
esses and products included in the study. Ethylene dichlo-
ride (EDC) is the major chloroethane and is largely consumed
in the manufacture of vinyl chloride. Vinyl chloride
is consumed, in turn, in production of polyvinyl chloride
and other plastic resins. Other chloroethanes are used
primarily as solvents. Vinylidene chloride, a high value
chloroethane derived from EDC, is polymerized to produce
plastic materials such as Saran.
Chloromethanes have somewhat different uses. Methylene
chloride is used in paint removers and degreasing agents.
Methyl chloride is used in the production of silicone
resins and rubbers. Two other chloromethanes, chloroform
and carbon tetrachloride, are used primarily to produce
fluorocarbon refrigerants and propellants. Some chloroform
is also used to produce fluorocarbon plastics.
Exhibit 4-2 diagrams the processes and major material
flows included in the industry. Production of chlorinated
organic compounds occurs at several different types of
manufacturing facilities which can be differentiated based
-51-
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Exhibit 4-1
PROCESSES AND PRODUCTS INCLUDED IN
CHLORINATED ORGANIC SEGMENT STUDY"
Process
1. Chlorination of Methane
Hydrochlorination of
Methanol/Chlorination of
Methyl Chloride
Chlorination of Hydrocarbons
4. Chlorination of EDC I
5. Direct Chlorination of
Ethylene
6. Oxychlorination of Ethylene
7. Pyrolysis of EDC
8. Chlorination of Vinyl
Chloride
9. Chlorinaticn of EDC II
10. Dehydrochlorination of
1,1,2 Trichloroethane
11. Hydrochlorination of
Vinylidene Chloride
Products
Carbon Tetrachloride
Chloroform
Methylene Chloride
Methyl Chloride
Carbon Tetrachloride
Chloroform
Methylene Chloride
Tetrachloroethylene
Carbon Tetrachloride
Tetrachloroethylene
Trichloroethylene
1,2 Dichloroethane
(EDC)
1,2 Dichloroe'thane
(EDC)
Vinyl Chloride
1,1,1 Trichloroethane
1,1,2 Trichloroethane
Vinylidene Chloride
1,1,1 Trichloroethane
-52-
-------
exhibit 4-2
PROCESS MATERIAL PLOWS
FOR CHLORINATED ORGANICS SEGMENT
I
ut
cs — -
Itatliana »
IICI. — 1_».
Hatlianol - »
"•a
Pruf'ana
or Propy- :«.
lene •
«*> *
Ethyl ana ^
ci.2 „
Glhyleiut .
IICI. ^
Oxyqcn/ ».
Air
Cblorlu-tlon
of
rtelhtna
r iiriiiyi i.uariuo
"»• ChlurufoiB
** i:arliou Tetrachlorld
in.
1
tlydrochlar In-t Ion
of
Hathauol
Chlorln-tlon
uf
llytlrocar-ona
MoCllV 1 tllOf lilo > . " • •-.. >I.B>^. IILil*
II ^ *.•••«• ••••*•«•• » Methyl CD* cm
a
or Ida
[ ' «,,„,»• C,,,or,(,a ' i.SS'mr^l.*!..
h IM*1
rhlorln-tlou
Ulroct
Clilorlnatlou
l>l<:liloru
Oiiyclilorliianlnn
of
Ethyl ana
of
i • fnc i
|
EOC^
»"y«olyalB vl Cliluilnat
• of • • • • . — ». at
.. . IICI.
KI>C ' Cliloclntttloit • 1-
' ~ ' * °' ^ ± |, o
— ^ — *«; ii Uehydro- * "j II
. 1 . c|i|nr|n- f.
1,1. J Til- y' ntlou I
cliloroeiticne » • *
Chloride
II O ____________ — .. •
iloroatliyloiMi
fatrnchlorlile
fulrachloio-
aiity I ciiii
t- roc
• -*• Vltiyl Chloi lila
un
^ 1.1,1 Trl-
cliloroelliane
If-^o- I.I.I Trl-
>lor- cliluriH:th_iie
utlon --*"
Chlufliln
-------
upon the mix of products produced. All of the plants in-
cluded in this case study are listed in Exhibit 4-3 and
are grouped based on the type of facility at which chlorin-
ated organic manufacture takes place.
Eighteen companies operate the thirty-one chlorinated
organics facilities in the United States.* The companies
and the chlorinated organics plants they own are listed in
Exhibit 4-3. Most of these companies are major chemical
producers involved in many segments of the industry. Some
of these companies also produce consumer products derived
from their own chemicals.
Geographically the facilities can be divided into four
different groups. The southern Louisiana/Mississippi River
area has seven plants, mostly ethylene complexes with chloro-
ethane facilities. Another group of plants are situated
on the Texas Gulf Coast. The third region containing these
these plants is the Ohio River Valley. This region includes
two plants on the Kanawha River and two plants on the Ohio
River. The last group of plants is scattered throughout
the country. PHB's analysis to date has considered the
Mississippi River, Texas coast and Kanawha River areas.
These areas include 15 plants which account for about 70
percent of industry production.
Pollution Problems of Concern
A total of 46 pollutants have been identified as emis-
sions from the 11 processes into the air, water and/or soil.
The pollutants arise from feedstock impurities, competing
reactions, and incomplete product recovery during produc-
tion. These pollutants are shown in Exhibit 4-4 and can
be classified into several groups, including conventionals
(4), metals (2), and a remaining assortment of organic
compounds.
In terras of physical quantity, the vast majority of
pollution from the chlorinated solvents industry occurs as
Seven of the thirty-one production facilities use unique
or outmoded production technology. The production pro-
cesses and material flows of these facilities are not
reflected in Exhibits 4-1 and 4-2. All of these facili-
ties are listed as Miscellaneous in Exhibit 4-3.
-54-
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Exhibit 4-3
CHLORINATED ORGANIC SOLVENT PLANTS
Integrated Chlorinated
Organics Plants
Company
Allied Chemical
Allied Chemical
Diamond Shamrock
Diamond Shamrock
Dow Chemical
Dow Chemical
E.I. DuPont
Ethyl Corp.
B.F. Goodrich
Houston Cheitu (PPG)
Shell Oil :
Stauffer Chemical
Stauffer Chemical
Vulcan Materials
Region
La.-Mississippi River
Ohio River
Kanawha River
Texas Gulf Coast
Texas Gulf Coas't
Sacramento Deep Water Channel
Texas Gulf Coast
La.-Mississippi River
Tennessee River
La.-Calcasieu River
La.-Mississippi River
Los Angeles Harbor
Ohio River
La.-Mississippi River
Ethylene Complexes
Dow Chemical
Dow Chemical
Shell Oil
Union Carbide
Union Carbide
Texas Gulf Coast
La.-Mississippi River
Texas Gulf Coast
La.-Mississippi River
Texas Gulf Coast
Chlorine/Caustic Plants
Vulcan Materials
KS-Cowskin Creek
Methanol/Ammonia Plants
Borden Chemical
La.-Mississippi River
-55-
-------
Exhibit 4-3
(Continued)
CHLORINATED ORGANIC SOLVENT PLANTS
Gasoline Additives Plants
Company Reg ion
E.I. DuPont Delaware River
Ethyl Corp. Texas Gulf Coast
Miscellaneous Plants
Union Carbide Kanawha River
FMC Corporation West Virginia
Hooker Chemical and Louisiana
Plastics
Stauffer Chemical Alabama
Eastman KodaJc Texas
Chemical Processors Washington
Monochem Louisiana
Upjohn Texas
-56-
-------
Exhibit 4-4
OCCURRENCE OF POLLUTANTS BY MEDIA AND PROCESS
CHLORINATED ORGANICS SEGMENT
Pcooain |l |2
Medial A H 8 A H S
x x
X X
urlile
1 riithalat*
» xxxx
lie no!
x x
X X
iicocthylena
>rophQnol
11 | < IS
A H S A H a A H S
X X . X
XXX
x
XX X XX
XXX
XXX
x • x x
1 6
A H S A
X
X
X
XX X
X
X X
X
X
X
X X
1 7
M S
X
X
X
X
X
X
X
X
I a
A H S
X
X
X
x
X
X
X I
1 V
A MS
X
X
1 "
'•
n
X
X
X
1 10
A H a
X
X
X
X
X
X
X
X
1 11
A H S
X
H
N
X
X
X
Pol jutajtt
Uenzuno
UOO
Butyl Chi'
IH-n-nuly
L'nrboit To
Cailionn
Ch lot-ill
Chloroform
2-Cliloro|
Chromium
COD
Cyanlilu
1.2 1)1 cl>
2,4 Old.
1,2 D|chloru|>cu|iAnu
I,) nlchloro|iropciia
Dimethyl fiUinr
Cthnliv
Rthyl Chloride
Klliy lent!
Klhylcnu Olchloclde
Itlu 2-i:ihylhuxyl HhthaUte
Fluoicno
lleiiach lurotieitxeno
X X
X
A - Air
H - Holm
!i - Solid WoHte (llazardonsl
-------
Exhibit; 4-4
(Continued)
OCCURRENCE OF POLLUTANTS BY MEDIA AND PROCESS
CHLORINATED ORGANICS SEGMENT
Proc««i
I'ulltitaiit Hedi*l
'III 12 t i |4 IS
• A W 8 AM 8 A H 8 A W S A H H
1 i 17 IB 1 » 1
in i
AH6 A W S A H 3 AHS A H S AH
Hiix.icliloroliiitAitianc x
IUtHAi;h liiroctlianu
Ho
llmnol
Hcthyl Clilurl'lo
Hctlixlene UilorMo
XX XX X ' X
X
X X X X X X
X » • I X X X
Mnnochloroacety lene
Nickel
I'untaclilorncthaito
I'd
Pr
l.'IIOl
opann
T.I in
1.
1,1,2 Totcauliloroetltnna
1,1,2,2 Tut luclilornetlinnu
*l*c 1 1 rtcli 1 of out ti v 1 £titt
TOC
TSS
i,
i(
1,1 rrlchloroRtliann
1 t Tt-l^lkl.ir nja t ki n.kA
Tr Ichlorelliy teiin
2,
VI
4,6 Tr Ictiluroplionol
nyl Cliloil.le
Vluy tiltiiti; Clilorldo
X X
X
X
X
X X
xx xxx
x x xx x
XX XX XX X
I X XX XX X
X
X X XX X •
x x,
i
i
X X1
X
X
x x x x xx
: X
X
X X
X
X «
t
X X
X
X 1 X
XX X X X X i
X X X X
X X X X
X X
XXX X XX »
X
X X X X X X
x i x x ; x
X X
A - Air
H - H«ti:t
S - Snllil Hauttt (llazArilounl
-------
air emissions, either directly from process and storage
operations or through volatilization of water-borne pol-
lutants from water pollution controJ equipment and surface
waters such as rivers. The industry is also responsible for
significant discharges to surface waters. The plants exam-
ined to date are sited in relatively populated areas and
thus the air emissions result in some degree of exposure
for large numbers of people. In addition, surface waters
in these areas provide a significant source of drinking
water and enjoy some amount of fish harvest, thus creating
possible exposure through these routes as well.
Exhibit 4-5 shows the control technologies considered
for each process and media (air, water or solid waste).
Treatment of air emissions requires that individual emis-
sion control systems be built for each process source.
Water discharged from all processes is combined and treated
in one treatment plant. All solid waste is also treated
in one facility. The nature of air emissions requires
that different controls be built for different air emission
sources at each process. Water-borne and solid wastes are
treated without regard to their source.
Cost-Effective Control Strategies
Three regions of the country have been studied in
detail for this case study. Together, the plants in these
regions account for over 70 percent of the chlorinated
organic solvents produced in the United States. The first
of these, the Mississippi River region, extends from Saton
Rouge to New Orleans. This region has been used as the
focus for most of the analyses. The Texas Gulf Coast region
and the Kanawha River valley have been studied to determine
the consistency of the results from region to region.
For each of these regions a cost-effectiveness curve
was developed using the mathematical programming model
(discussed"in Appendix A). In the Mississippi region
seven plants have been modeled through construction of a
"sum" plant designed to represent the combined production,
pollution and health impacts of the seven plants. By
constraining the model to reduce the total weighted health
impact of the sum plant by 30, 50, 85, 90, 95 and 99 percent
of the uncontrolled health effects a cost-effectiveness
curve was developed. All analyses assumed 1985 conditions.
-59-
-------
Exhibit 4-5
APPLICABLE TECHNOLOGIES FOR POLLUTION CONTROL
CHLORINATED SOLVENTS SEGMENT
E»laa Ion/Control Technology
Proceaai
Process Description Absorber Incinerator
1.
2.
1.
4.
• j_
O
1
6.
7.
1.
t.
10.
Chlorlnatlon of x
Methane
llydrochlorinatton x
of Methanol/
Cli lor (nation of
Methyl Chloride
Chlorlnatlon of
Hydrocarbon*
Chlorlnatlon of
KOC 2
ulruct Chlorlna- x
lion of ethylena
Oxychlorlnatlon x
of Gthylenu
Pyrolyils of BOC x
Chlorlnatlon of x
Vinyl Chloride
Chlorlnatlon of x
EOC II
Dohydrochlorlna- x
Air
Storage! Mtacel laneouai
Condenser Punitive Control
x x
X X
X
X
X X
a x
X
X X
X X
Mater
1 -Stage Actl- J -Stags Actl- Activatod' Carbon
vated Sludge vated fifudqe Treatment
XX X
XX X
XX X
X X X
XX X
XX X
xx x
XX X
XX X
XX X
Solid Haate
Otenm
S t r 1 PP 1 ng
x
x
1 X
X
X
X
X
X
X
„
Inclneral Ion
x
X
X
X
X
X
X
X
X
tlon of 1,1,2
Tr Ichloroethane
II. Mydrochlortnatlon
of Vlnylldena
Chloride
-------
Exhibit 4-6 shows the cost-effectiveness curve for the
Mississippi sura plant. This curve shows the total cost to
plants in this region of achieving the indicated reduction
in health risk from the plant's pollution. The model has
determined the least-cost pollution control strategy to
achieve each level of risk reduction. That strategy can
include the addition of pollution control equipment to
control any combination of air, water or solid waste pollut-
ants, production shifts or cutbacks, or process shutdowns.
The strategy used to achieve the indicated risk reduction
will be discussed below.
The curve is quite flat through the 90 percent risk
reduction point, after which It rises steeply. The flat
portion of* the curve corresponds to an annual cost of
pollution control including annualized capital charges of
$0.07 million for 30 percent risk reduction, 50.48 million
for 50 percent, $4.30 million for 85 percent and 514.49
million for 90 percent. The relatively low cost of achiev-
ing these risk reduction levels reflects the availability
of pollution control options which recover chemicals for
use or sale by the plant. The value of these recovered
chemicals offsets a large portion of the capital and oper-
ating costs of the control options. The cost to achieve
risk reduction levels beyond 90 percent is great because
process shutdowns and costly control options must be em-
ployed.
It should be noted that total health risk is calculated
by weighting together the relative risk of the eight health
effects with a specified set of weights. For most of the
analyses, quality of life weights were used. Two other
sets of weighting factors, economic and equal weights,
were also used for some analyses. These weighting factors
are discussed in detail in Chapter 2 and Appendix D.
In Exhibit 4-6, the cost-effectiveness curve for the
Mississippi sum plant is shown for all three sets of weights.
Note that the cost of risk reduction is virtually identical
through the 90 percent risk reduction point regardless of
the weights used. After that point, further risk reduction
is less costly to achieve if one chooses the economic
weights rather than the quality of life or equal weights.
This is due to the greater emphasis placed on carcinogenic
effects by the economic weights. Carcinogenic effects are
easier to control at risk reduction levels above 90 percent.
-61-
-------
COST OF HEALTH RISK REDUCTION
MISSISSPPI COST EFFECTIVE CONTROL CASES (1985)
Quality Of Ufa
Health Weights
Economic
Health Weights
Equal
Health WalgliU
-4-
O
I
cr»
300
•400
300
200
100
COST (mlttlonu of EOY 19B5 $)
-100
11
10
20
30
40
60
70
00
90
PERCENT REDUCTION IN HEALTH RISK
THE RESULTS SHOWN HERE ARE PRELIMINARY AND SHOULD NOT BE QUOTED.
100
-------
k reduction level achieved for each individual
,<=ct is often different from that achieved for the
sum health effect. This is a result of the dif-
, priorities the weighting factors place on each ef-
», the difficulty of controlling the pollutants that
id to each effect and the absolute magnitude of the risk
f each effect. Exhibit 4-7 shows the risk reduction level
achieved for each effect in the Mississippi sura plant when
quality of life weights are used. Note that certain effects,
like cancer and reproductive toxicity, generally have a
higher risk reduction than the weighted effect. This
reflects both the ease with which these effects can be
reduced and the fact that they account for a great propor-
tion of total risk even though their weights may be lower
than average. Other effects, however, such as rautagenicity
and teratogenicity, are reduced much less than the weighted
effect despite their high weights. This is due to the
difficulty of controlling the pollutants that cause them
and their small contribution to total risk.*
In Exhibit 4-8, the level of :risk reduction and cost
of pollution control for the current control levels achieved
at the Mississippi plants is plotted. The cost-effectiveness
curve using the quality of life weights is included for
reference. Note that the level of: risk reduction achieved
by current controls is 36 percent- if calculated using the
economic weights and 28 percent if derived using the other
weights. The current control points are above the cost-
effectiveness curve, indicating that the same level of
risk reduction could have been achieved for approximately
$18 million less per year. Alternatively, if this addi-
tional 518 million had been spent to reduce health risk
then the curve indicates that a 90 percent reduction in
health risk could have been achieved.
The primary cause of the higher cost of current controls
is the installation and use of more costly water treatment
systems than is necessary to achieve the present level of
health risk reduction. This system does achieve a higher
level of conventional pollutant control (such as BOD, COD,
TSS, etc.) than would be achieved by strategies primarily
* In the uncontrolled case, the relative risk score for
cancer accounts for 43 percent of the total weighted
health score while mutagenicity and teratogenicity ac-
count for less than 1 percent.
-63-
-------
I
01
Exhibit 4-7
INDIVIDUAL HEALTH EFFECT RISK REDUCTIONS
VS.
TOTAL WEIGHTED HEALTH EFFECT REDUCTION
QUALITY OF LIFE WEIGHTS
MISSISSIPPI SUM PLANT
Weighted Risk
Reduction (I)
Individual Health Effect
Risk Reduction
Cancer
Mutagenicity
Teratogenicity
Reproductive Toxicity
llepato Toxicity
Renal Toxicity
Other Effects*
Neurological Toxicity**
0
0
0
0
0
0
0
0
0
30
34.2
0
0
71.6
37.3
46.5
5.1
0
50
47.7
0
0
81.7
64.7
87.1
28.2
0
85
91.6
f
18.9
48.0
98.2
84.4
88.0
71.0
0
90
96.9
82.5
75.9
98.2
96.5
94.5
75.2
0
95
98.8
94.1
99.9
99.9
99.9
99.4
85.5
0
99
99.4
99.9
78.0
99.9
99.8
99.4
97.9
0
* Principally respiratory effects.
** No neurological effects are currently expected from chlorinated solvent plant
pollutants.
-------
lixli tl>l t i — o
COST OK HEALTH HISK REDUCTION
MISSISSPPI COST EFFECTIVE CONTROL CASES (1005)
Quality Of Ufa
Houlth Weights
Currant Control
Quality Weights
Current Control
Economic Weights
Currunt Control
Equal Walghta
O
ui
l
500
40Q
300
200
10O
COST (millions of EQY 1965 |)
-100
10
20
a
30
HO
l ,1.0. U.I.I I I til I I.LI IX. I, J HU.1J III !•> I MU 1IJ
50 BO 70 BO 90
100
PERCENT KEOUCTIGN IN HEALTH RISK
THE RESULTS SHOWN HERE AKE PRELIMINARY AMD SHOULD MOT OE QUOTED.
-------
aimed at reducing health risks. Thus, if the reduction of
environmental effects were included in the analysis the
current control case may be a cost-effective strategy.
Exhibit 4-9 is a process-by-process listing of the
control options employed at each level of risk reduction
and at the current level of control. Processes with NA (not
applicable) are not present in the Mississippi region.
Note that even at the "zero" risk reduction point certain
control options are in place. This is due to the profita-
bility of these options that results when the value of the
chemicals recovered exceeds the annual operating and .capi-
tal costs. Thus the "zero" risk reduction level reflects
some risk reduction over a totally uncontrolled plant.
The "zero" level does, however, represent the level of
health risk which would arise from a plant not subject to
environmental regulation.
Current air pollution controls reflect process, storage
and fugitive emissions control for processes 5, 6 and 7.
Current water pollution control consists of a single acti-
vated sludge water treatment system. Other controls listed
as currently in place are* those identified as profitable
in the "zero" risk reduction case.
In moving from lower to higher risk reduction levels,
it is possible to discern a pattern in the sequence of
control options selected. At the 30 and SO percent risk
reduction levels more stringent air pollution controls in
the form of gas absorbers, storage tank condensers and air
pollutant incinerators are added. To achieve an 85 percent
risk reduction, further air control, treatment of some
process water effluent with a single activated sludge
water treatment system equipped with steam strippers,* and
the secure landfilling of the residual waste from hazardous
waste incineration are used. Op to the 85 percent reduction
level the cost of control is limited by the recovery credits
which offset most of the operating costs of the air and
waste treatment options. This causes the cost-effectiveness
curve to be relatively flat up to this point.
Steam strippers reduce the quantity of priority pollut-
ants in the discharge water and remove pollutants that
would have become air pollutants through volatilization
at the activated sludge unit.
-66-
-------
CONTROL STRATEGIES SELECTED FOR
COST-EFFECTIVE RISK REDUCTION1
MISSISSIPPI SUM PLANT
1. £lil urination of
Methane
2. Uydrocliluriitatlou
of Mathnnal/
Clilorluatlon of
lluthyl Chlorlda
J. Cltlorlnatlon of
_ Hydrocarbon*
*. Clilarliintltiii of
cue i
S. I'lrect L'hlor Inatlaii
of Ctliylcne
6. O«ychl urination
»f Elhyleiie
1. rydklyula ol
MtC
a. Cliltn liiatlon of
Vinyl Oil or Ida
9. Chlurlnatlon of
EUC II
10. UehydrocMorlnatlon
of 1,1.2 Trlcliloco-
c 1 ha »e
11. llydrochlurtiultlan
ut Vinyl Idunc
I'MurlJc
0
HA
Abaorber
Wa*te Incln.
•
Waate Jiicln.
Shutdown
Air Incln.
Ha at* Incla.
Uaatu loclit.
Air Incla.
Uaete Inciii.
Haale Inclu.
MA
Shutdown i
l
30
NA
Abaorboc
Wuuld Iiicln.
Want* Inuln.
Sliutiluwu
Air loclit.
Uattu Incla.
Atr Incln.
Waaie Inclo.
Air Incln.
Uama Incln.
Secure It
WuBlo Incla.
NA
Sliutdown
SO
NA
Almorber
Wiiata Inclu.
Condenser 111
Waulo lucln.
ShutJuwn
Air Incln.
CoiKjaimer III
Wadl« Incln.
Air Incln.
Waale Incln.
Air Inclu.
Uaute lac In.
Secure l.t
Haate Incla. •
HA
Air Incln.
Sliut^laun
•IIEAI.1II tFFECT R
Si
NA
Abaarber
Conilenaar 111
Act. SL/SS
Wnolc Incln.
Cecuro LF
SliutJuun
' Shutilown
Air Incln.
CoittUnaer III
Uantc Incln.
Air lucln.
Act. i!l./S3
Uuala Incln.
Air liicln.
Hauto Incln.
Secure I.F
Waste Incln.
Secura I.P
tu
Air Incln.
SliutJuwa
FSK HtllUCriOH (X
90
HA
Abaorber
Condenaur III
Fugitive CTI..
Act. SL/S3
Maate Incln.
Secura l.t
Sliutduun
Shutdown
Air Incln.
Ctmdeituer 111
Uaate Incln.
Air Incln.
Act. SL/3S
Mnate Inclu.
Air Incln.
Act. SI./SS
Uaale Inuln.
Secure I.F
Act. si./sa
Uuate lucln.
Sectire I.F
HA
Air Inciii.
Sliutdown
k
9)
HA
Shutdown
Shutdown
Sliutdoun
Air Inclu.
Cuinlunacr III
Fugltlvo
Wnate Inclu.
CMlbock
Shutdown
Air lucln.
Act. si./sa
iiecute I.F
Curluick
AU Inclu.
Act. St/SS
Waacc locln.
Secure tr
NA
Air Incln.
Act. SI/SS
Shutdown
99
MA
Aliaotber
C
-------
Risk reduction levels of 90, 95 and 99 percent require
a combination of fugitive air pollutant controls and more
extensive water treatment* in addition to process shut-
downs and production cutbacks. The use of these options
significantly increases the costs of control. These costs
now include the decrease in margin attributable to lost
sales and the sale of less profitable products. Because
market and price responses to the intended shutdowns and
production shifts are not included in the analysis, the
actual events likely to occur at a risk reduction level
greater than 90 percent are difficult to predict reliably.
Nevertheless, it is clear that major market and industry
impacts can be expected at these extreme risk reduction
levels.
Exhibits 4-10 and 4-11 present the control options
selected when the economic and equal weights are used.
Although minor differences appear in the sequence of options
selected, such as the earlier use of air control and the
delayed use of water treatment, the overall patterns are
quite similar.
In Exhibit 4-12, the cost-effectiveness curves for
iMississippi, Texas and Kanawha sum plants are compared.
Note that despite differences among the process configura-
tions and sizes of the plants in these regions, the cost-
effectiveness curves in percentage form are quite similar.
In Exhibits 4-13 and 4-14, the Texas results are
presented in detail. Because the Texas sura plant is larger
than the Mississippi plant and includes greater pollutant
loads, absolute control costs are higher, equaling $600
million at the 99 percent risk reduction level. The control
options employed are similar to the Mississippi results.
Exhibits 4-15 and 4-16 contain the results for Kanawha
which indicate far less absolute cost of control due to the
presence of only one chlorinated organics process in the
region. The control strategy at the 99 percent risk
reduction level is more severe than in the two preceding
cases in that a total plant shutdown is the most cost-
effective strategy at that point.
* More extensive in terras of more effluent from additional
processes being treated in a larger treatment facility.
-68-
-------
Exlltt>it 4 — 10
CONTROL STRATEGIES SELECTED FOR
COST-EFFECTIVE RISK REDUCTION1
MISSISSIPPI SUM PLANT
vo
I
|,M,M>-SS - - IIKAI.TII KFFfCT RISK HEUUI.TIUN (X)
1U_ 0 1Q ju jj go
|. Mil urluol lun ul
2. HydrochlorliMtloii
u( Mulhiuiot/
Oilorlnotlon ol
llcthyl Chlurldo
). Chlurlnotlon of
4. t'hlorluat lun uf
KIlC 1
5. Direct Chlurlnatlon
uf Cthylcuu
(,. Onychlur Inatlon
uf Kthylenu
). Pyrolyuls uf
0. Chloi'JnatJiMi of
Vinyl Chloride
9. L'hlorliiallon of
KliC ||
IU. Itthydroclilurlnetlon
uf 1.1.1 Trlchluro-
11. ll/drochlar Inntlon
uf Vlnylldcuc
HA'
Abaorber
Waata Incin.
*
Uaata Incln.
Shutdown
Air Incln.
Waate Incln.
Uaate Incln.
Air Incln.
Waate Incln.
Wattle Incln.
HA
Shutdown
NA
Absorber
Waulu Incln.
Maata Incln.
Shutdown
Air Incln.
Waste Incln.
Air Incln.
Waate Incln.
Air Incln.
Waala lucln.
Secure IF
Waale Incln.
IIA
Shutdown
NA
Abuorber
l
-------
X I? J. !».
CONTROL STRATEGIES SELECTED FOR
COST-EFFECTIVE RISK REDUCTION1
MISSISSIPPI SUM PLANT
o
I
10
5u
Hi
I:T HICK iitmiciioii
90
95
Ci.rrc/nt
1. Cli lot Inatlon u(
Iliithana
2. llydrochlorlnntlun
of Hotlninol/
Chlorlnatlon of
llulbyl Chloride
1. Chlot Inatlon of
llydrocurlioiitt
4. (.'lil or Inallciii of
MIC 1
5. Wired Chlor Inallmi
of Ltliylciie
6. Uxychlorluat loll
of Klhylenu
7. 1'yrulynlu uf
me
U. rblurliiallon of
Vinyl Clilorldu
9. Uilorlnatlnn o(
I-IIC II
10. Oehydruchlor Illation
of 1.1,2 Trlchloro-
etlianu
II. llyilior.hlorliijitton
of Vliiyll.luiui
Chloride
HA
Abuorher
Huala Incln.
Wane Incln.
Shutdown
Air Incln.
MnJIu 1 111; In.
llaaia Incln.
Air Incln.
Ujuta Inr.ln.
Ua*la Incln.
HA
Shutdown
HA
Abaorbar
WuMltt Inclu.
Witatn Incln.
Shutdown
Air Incln.
Uaiite Incln.
Uauta Incln.
Air Incln.
Uuate 1 nc In.
Unate Incln.
HA
Shutdown
HA
Abuortier
Unutu Incln.
Cundcnuor III
Uuata Inclu.
Shntdowii
Air Incln.
Uaate Incln.
Air Incln.
Waijle Incln.
Air Incln.
Unuto Incln.
Sucure I.F
Unit* Incln.
HA
Air Incln.
Shutdown
IIA
Ali*orli«r
Condmiaor III
Unite Incln.
tjecuru Lf
iihiildown
Shutdown
Air Incln.
Condenaar HI
Unutc Incln.
Air Incln.
Act. SL/S3
Waatc Incln.
Air Incln.
Wane Incln.
iicculu l.f
Waatci Incln.
Secuiu I-F
»
IIA
Air Incln.
Shutilown
IIA
Abaurber
Condcnttur 111
Act. S1./S3
Haute Incln.
Secnru l.f
Miuliluun
Shulduwn
Air Incln.
Cm.Jcj.aer 111
Alt' Incln.
Condcnuur 111
Act. SI./SS
Wuute Incln.
Air Incln.
Act. SI./SS
Wuute Incln.
.Stci.ru IK
Act. SI./SS
W.iato Incln.
Suctira I.I-
IIA
Air Incln.
Act. SI./SS
Shutdown
HA
Abaurbur
CundcnKttr III
Act. SI./SS
Ujtale Incln.
Secure ).f
Shutdown
Shutdown
Air Incln.
Coiiiliiiiuur HI
Fugitive
Mania Incln.
Air Incin.
Condenuer III
ruuitlve CTL.
Act. SUSS
Uuate Incln.
Cutback
Air Incln.
Act. SI./SS
Sucuru l.f
Cutback -
Air Incln.
Act. SI./SS
Haule Incln.
Secure If
HA
Air Incln.
Act. SI./SS
Shutdown
HA
Shutdown
Shutdown
Shutdown
Air Incln.
Coiidenaer HI
Fugitive CTI,.
Uaate Incln.
Shutdown
Shutdown
Shutdown
IIA
Shutdown
Shutdown
HA
Abnurbei
Act. St
Hjito Incln.
ACL. SL
Uaate Incln.
Shutdown
Air Incln.
Cuiiiloiiaur III
Fnultlve Cll..
Act. SI.
W.ialc Incln.
Air Incln.
Cundunaiir HI
Kualtlwo Cll.,
Act. SI.
Wunlii Incln.
Air Incln.
Fug!tJvft ItTI..
Act. SI. '
W.i ali: Incln.
Act. SI.
Unatu Incln.
HA
Act. SI.
Shutdown
1.
U 'c<|uul' health effect weighting acltanui.
Hotel Ai.y w.i.tu not Inclnaruted or ««cu(« landflllcd lu aent to a «unllai-y landfill.
-------
COST Of HEALTH RISK REDUCTION
SUM PLANT COMPARISONS
Mlaalaalppl Sum
Plonk Coat Curvo
'Kanawhq Sum
Plant Cotat Curva
Texoa Sum Plant
Coal Curvo
100
flQ
80
70
60
COST ( parcont of uncontrolled groaa margini )
30
10
-10
11111
I 1 I 1 I I 1 1 I I I 1 I I A i 1 1 i 1
10
20
30
60
70
80
90
100
PERCENT HEDUCTION IN HEALTH R|SK
THE RESULTS SHOWN HERE ARE PRELIMINARY AND SHOULD NOT BE QUOTED
-------
Exhibit 4-13
COST OF HEALTH RISK REDUCTION
TEXAS COST EFFECTIVE CONTROL CASES (1985)
Quality Of Ufa
Health Weights
6OO
BOO
400
300
2OO
too
COST (millions of EOY 1985 $)
-f-
'' "i hi i n i
10
20
50
CO
70
l-LLl
BO
00
100
PERCENT REDUCTION IN HEALTH RISK
THE RESULTS SHOWN HERE ARE PRELIMINARY AND SHOULD NOT BE. QUOTED.
-------
Exhibit 4-14
*
CONTROL STRATEGIES SELECTED FOR
COST-EFFECTIVE RISK REDUCTION1
TEXAS SUM PLANT
mictss
-IIKAl.TII tffeCT DISK ((EDUCTION (I)
US 90
95
Current
COBtrain
1. Oil urination of
Hetliano
1. llydi-ochlorinatloii
of llellianol/
Ch lot iiiatlan at
Metliyt Chloride
J. Chlorlnattaii of
llydTocnrbcme
4. Clt lor Illation »t
EOC t
i. Direct Culorliiatlou
of ethyUiiu
6. Uxychlor liialloii
ut Cthylena
1. I'yrolyale of
tbC
S. Chloitiiatlon of
Vinyl Clilotldo
9. Cl.lorlnutlt.il of
KUC 11
10. Uuliydruclilnrlnat Ian
of 1.1.2 Trlclitoro-
iitliaite
11. llydruclilurliiatluii
ut Vluy Ilitunu
Cliladda
Abaaruer
Uaate Inclii.
HA
Uaate Incln.
Shutdown
Air Incln.
Uaata Incln.
Air Incin.
Waate Incln.
Waate Incin.
Uaata Incln.
Uaat« Incln.
HA
Abaorlier
Condenser I"
Uaute Cue In.
HA
SliulJuwn
Siiulilown
Air Inclii.
Uattta Incln.
AU Incln.
Uaate Incln.
Air Incln.
Waata Incln.
Wuttte Incln.
Waato Incln.
Air Incln.
HA
Atiaurltar
Aonilcnaar III
Waata Incin.
HA
Uaat* litcln.
SlniCJuun
Air Inciii.
Uoate Incln.
Air Incln.
Act. SC/S3
Uaata Incln.
Air Incln.
Haita Incln.
Sccura I.P
Haata Incin.
Wntt« Incln.
Air Incln.
HA
Al'nurlicr
Coiulcnicr 111
Act. SI./S3
Haslc Incln.
Secure I.F
HA
Sliutduwii
SliuLdiiwn
Air Incia.
Con4cnaer III
fugitive CTL.
Wuule Incln.
Coudenacr III
Air Incln.
Act, SL/SS
Wadte Incln.
Air Incln.
Act. SL/S3
Waata Incln.
Secure LF
Ac.t. SU/SH
H»at« Incln.
Sccura I.F
AU lucln.
Cundcnaer III
F»Hltlvc CTL.
Act. SI./5S
Mail to Incln.
Air Incln.
Act. SI./SS
HA
Shutdown
MA
Shutdown
Shutdown
Air Incln.
Condcnaer III
Fugitive CTL..
Uaate Incln.
Air Incln.
Condenaar 111
Act. SL/SS
Uadte Incln.
Air Incln.
Act. SU/SS
Wauto Incln.
Secum U
Act. SI./SS
Uaate Incln.
Secure LF
Air liicln,
Condeuser III
r'ugUIve CTI..
Act. SL/SS
Uaoto Incln.
Air Incln.
Act. SI./SS
HA
SluitduwM
HA
Shutdown
Coitdenaor II
Act. SI./SS
Air Incin.
Coudenner III
Fugitive CTL.
Uaate laclii.
CM t back
Shutdown
Air Incln.
Act. SL/SS
Uuuto lucln.
Secure LF
Cutback
Air lucln.
Act. SL/SS
Haste 1 lie In.
Secure I.F
Incraaae
Shutdown
Air Inr.ln.
Act. SI./SS
HA
Slii^tduHii
HA
Shutdown
Shutdown
Air Incin.
Condenser III
Fugitive CTL.
Uaata Incln.
CtitUack
Shutdown
Shutdown
Air Incln.
Act. SL/SS
Uaate Incln.
Secure If
Increase
Air Incin.
Coadooaer 111
Fugitive CTL.
Act. Inc in.
Act. SI./SS
("Cfeaae
HA
Act. SL
HA
Act. SL
Uaate Incln.
Shutdown
Alt luu-lu.
Contlcnver HI
Fugitive CTL.
Act. SL
Uaate Inctn.
Air luciu.
Condeneor 111
Fugitive CTL.
Act. SL
Uastu Incln.
Air Incln.
Fugitive CTL.
Act. SI,
Uaata Incln.
Act. SL
Waste Inclu.
Act. SL
Act. SL
IIA
lining 'i|uiillty af Ufa* li^nllli effect welglitlng Bcliciuo.
(l.j|<:; Any Wdulu itol lutiliiuiutud >>r t-ucuru luiidflll«id ia aant ta n uuullnrf liiudl'lll.
-------
exhibit '4_j.5
COST OP HEALTH RISK REDUCTION
KANAWHA COST EFFECTIVE CONTROL CASES (1985)
Quality Of Llfo
Health Weights
60
50
COST (millions of EOY 1985 $}
4-
30
20
10
-10
I I I I 1 1 I I I 1 I 1 I I I I 1 I I I 1 I I I I I
10
20
30
60
70
60
too
PERCENT REDUCTION IN HEALTH RISK
THE RESULTS SHOWN HERE ARE PRELIMINARY AND SHOULD NOT DE QUOTED.
-------
Exhibit 4-16
CONTROL STRATEGIES SELECTED FOR
COST-EFFECTIVE RISK REDUCTION1
KANAWHA SUM PLANT
I'KDCKSS
Ul
l
10
SO
-HEALTH m-ecr BISK REDUCTION ID
as 'jo 95
99
(Jain* 'quality of Ufa' health affect weighting aclutuo.
II.Uei Any wuate uot luctoerateJ or secure lanUMIluJ In aeitt ti> a aunltary landfill.
Current
1. clitorlixulun of
Hvtliuuu
2. llyilroclilor iiiatlon
of timluMiul/
C'lilorlnntloii of
llelliyl Uilurlda
J. ChlarlnaClun of
llyJrucnrliotta
4. L'hlor Inatlon of
KIM: I
J. Ulruct Clilorlnation
of ElhyUne
6. UiyclilarlnatlAn
of Ktliylciiu
7. I'yrotyala of
KDC
8. Chlarlimtioii of
Vinyl UilorMo
9. Chlorlautluii of
III. Hiihyilroclilur Inatlan
of 1,1,2 Trlchloro-
ellinnu
11. Itydroulilurliiaclon
of Vtnylldeiie
HA
Abuorber
Haate Incln.
NA
HA
HA
HA
NA
HA
HA
IIA
NA
NA
Abaorber
Condeuaer 11
Uuata Inuin.
NA
HA
HA
HA
NA
HA
HA
HA
HA
HA
Abuorber
Condenaer II
Ha at a Incln.
NA
HA
HA
HA
HA
HA
HA
HA
NA
HA
Abaurbor
CouJunaar III
Fugitive CTL.
Uaata Inclo.
Secure LF
HA
IIA
HA
NA
tIA
HA
HA
NA
NA
tIA
Abaorter
Condenser 111
Fugitive CTL.
Act. JJI./SS
Uaate Incin.
Socurc I.F
HA
HA
HA
NA
IIA
HA
HA
IIA
NA
IIA
Ahautber
ConJcnaer 111
Fugitive frri..
Act. SL/SS
Uaate IncJn.
Secure LF
Cutback
HA
IIA
HA
NA
NA
HA
HA
NA
IIA
HA
Shutdown
HA
NA
NA
HA
HA
HA
NA
NA
HA
HA
ALeorber
Act. SU
Uaate Incln.
HA
HA
NA
HA
HA
HA
NA
HA
HA
-------
Alternative Policies Examined
One of the most powerful capabilities of the industry
approach is its ability to evaluate the position of specific
regulatory alternatives relative to the cost-effectiveness
curve. In Exhibits 4-17, 4-18 and 4-19 the results of
reducing the emissions of the three most toxic pollutants
and the three major processes are presented. The emissions
of the most toxic pollutants (chloroform, ethylene dichlo-
ride and vinyl chloride) were reduced to 75, 90 and 95 per-
cent of their uncontrolled levels. The cost of this type
of control far exceeds the cost of the same level of health
risk reduction on the cost-effective curve. Also note that
an increase in the emission reduction from 90 to 95 percent
achieves only a 1 percent reduction in risk.
Control of processes 5, 6 and 7, in the form of air
incinerators, 85 percent effective condensers and the use
of an activated sludge water treatment plant is almost as
cost effective as the most efficient way to achieve 23 per-
cent risk reduction. Extensive control of these processes
(air incineration, 95 percent condensers, fugitive control,
and activated .sludge with stearn stripper water treatment)
is somewhat less: effective in that the cost of achieving
48 percent risk ^reduction exceeds the most efficient cost
by approximately; S25 million. Both types of process con-
trol are, in this case, more cost-effective than the indi-
vidual control of toxic pollutants. Note, however, that
the range of risk reduction over which these relationships
hold is narrow. For example, it is impossible for any
combination of controls for processes 5, 6 and 7 (other
than costly shutdown) to achieve greater than 60 to 70
percent risk.reduction for the entire plant.
Plotting the relative cost-effectiveness of policy
options like process or pollutant specific control permits
the analyst to identify the merits of different alternatives
and their cost relative to the lowest possible cost repre-
sented by the cost-effectiveness curve. Similar analysis
could be carried out for many policy alternatives.
Cumulative Economic Impacts
By combining the results of the plant models and stan-
dard assumptions about book value and reinvestment behavior
-76-
-------
Exhibit 4-17
COST OF HEALTH RISK REDUCTION: MISSISSIPPI
SENSITIVITY ANALYSIS: POLICY ALTERNATIVES
•vl
I
Quality Of Ufa
Health Weights
75X Reduction Of
Moat Potent Toxlca
•f
flOX Reduction Of
Moat Potent Toxlca
05* Reduction Of
Most Potent Toxlca
D
Moderate Control
Processes 5,6.
-------
Exhibit 4-18
CONTROL STRATEGIES SELECTED
FOR MOST HAZARDOUS CONSTITUENT CONTROL1
MISSISSIPPI SUM PLANT
-IIKAI.TU tmcr »ISK INDUCTION (X)
S0.42 601 61*
CO
I
1.
2.
3.
4.
5.
6.
7.
a.
9.
10.
it.
Chlorlnatloit ul
Methane
llydroclilorlimtlon
ul Mothanul/
Chlorlnatlon of
Hutliyl Chloride
Cliloi lite t Ion of
Hydrocarbon*
Chlorlnatlon at
toe i
Direct Chlurlnatlon
of ethyl ana
0*yclilor (nation
of Etliyleiia
Fyrolyala at
EtlC
Chlarlnatton of
Vinyl Chloride
Cnlorlnatlun of
EDC 11
Ucliydroctilarlnatloa
of 1,1.1 Trlchluro-
etliano
llydruchlorlnatlon
of Vlnylldeno
ChlorlJe
HA
Absorber
Uuatd loclu.
UauC* I tic In.
filiutiluuu
Alt Iiicla.
Waatd liicln.
Waut* Incin.
Air lucln.
llaate lucln.
Waat« Incla.
NA
Sliutcloun
IIA
Abaocber
Maace Incin.
Coivlenacr II
Waat* Iiiclu.
Sliutiloun
Air lucln.
Haoto incln.
t'onilcn««r 11
Air Incln
MautA Incln.
Act. SL/S3
•Ale Incln.
Haute Incln.
Secure Lf
Cutback
Vftte Incln.
HA
Slmtiluwn
HA
AbaotUcr
Uaato Incln.
Cointenaef III
CuuJcnear III
Hnute Incln.
SliutJown
Air Inclu.
Candeiiaer III
Waste Incln.
Air Incln.
Waato Incln.
CiuiJcitaer I
Act. SL/SS
SliutJ»un
Uiiale Incln.
Air lucln.
HA
Air Incln.
Sliutdowa
IIA
Abaorbcr
Conileuaer III
Act. SL/SS
Haste Incln.
Secure l.f
Shutdown
Situ t down
Air Inctn.
Condense c 111
UaaCe Incln.
Air Incln.
Act. SI./SS
Uaste Incln.
Act. SI./SS
CoiiJcnaer III
Sliutdoun '
Hoflle Incln.
Secure l.t
Air Incln.
HA
Air Incln.
Shutdown
Using 'i|uallty nf life* kcaltli effect weighting /scheme. Cheatcala controlIcJ arol EDC, VCH and
Chlorofurn.
Currea|ioC. VfM, Clituraforn calaatona In all ucilla.
Currca|ionila to a 9)1 redaction In EUC. VUI. Chlurnform enlaaloim In ell nudla.
t
I4<«t«*l Any watttfl m»t lucloufjitcj ur ueturo luiktlMl Jc*l lu aeut lu u uaiiltacy liikidfill.
-------
Exhibit: 4-19
CONTROL STRATEGIES SELECTED FOR
PROCESS-SPECIFIC CONTROL
MISSISSIPPI SUM PLANT
— IICAI.TII IWIXT nir.K UCIMH.TIOH'
1.
2.
1.
4.
5.
*'
7.
U.
a.
10.
n.
riilor Inatlon of
McUi/tnc
llytlrGclilutin&t ton of
Motliitnol/Clilor I lift t ion
of Mntliyl Cliloilriu
Cli lor Ination of
llyjrocarlionn
Cliloi tnatlon of CDC I
Direct Cltloi inat Ion
of Kthylcno
Uxyclilnrlnot Ion of
KthyK-no
I'yrolyuin of i:i)C
Clilorin.it Ion of
Cli lor 1 nation of
CDC 1 1
Duliytlioelilor InaLlon of
1,1,2 Tr Icliloroutlianu
llyilroclilor inat ion
of Vinyl !<|.>n<: Cliloi l>lo
O
HA
Ahum liof
Vlautu Incln.
Man to Incln.
filintilown
Air Incln.
ll.ii) Ln Incin.
Uaul.il Incln.
Air Incln.
Haute Incln.
Ha 11 to Incln.
HA
iilnitiloun
2|2
HA
Aliuoi Ix.T
Hiiatu Incin.
Uaulu Incln.
Hlintdoun
Air Incin.
Hautn Incln.
Coiulaniicr 1
Act. ;il.
Air Incin.
Coiuluii'iur 1
Kaatu Incln.
Act. HI.
Air Incln.
I'lA.ito Incln.
Act. SI.
Haste Incln.
HA
tiliiitilown
•III1
HA
Ali:iOfl>cr
Wa:il:i; Incin.
Conilonu&r III
Uaf.lc Incln.
tiluitdown
Air Incin.
CondoiiHui: III
rmjitivc Ct 1 .
Wjutu Incin.
Act. Jil./li!j
Air fncin.
Uiinte Incln.
(.'oiulunaor III
I'u.j 1 1 1 v« Ct 1 .
Air (ne In.
fiKjitlvu Ctl .
Aft. SL/S!!
Waatc Incin.
Honto liict ii^.
NA
Mintilown
'll:iln«j "<|>i.illly of tlfo" littallli effect wi: lijlit ln<| ncliuim;.
^(.'01.:»<:ii|»»ii.l;( I u nioiloriito cuiitiol of |>i OC.MI.'IUH 'j, (>, anil I.
'('01 i'::.|iorKl.'i |» oxli.'iin I v«' control ol |>rot:<:iiiiun '->, d, ami 7.
IKilo: Any w.i.il-! nlil inc IniM'nt >M| of 1:01:111'•: l.in
-------
it is possible to construct income statements for the plants
at each point on the cost-effectiveness curve. These income
statements can be used as the basis for assessing cumulative
economic impacts such as the magnitude of price increases
necessary to recover Ipst profits.
•Exhibits 4-20, 4-21 and 4-22 present income statements
for the cost-effectiveness curves of the Mississippi, Texas
and Kanawha sum plants. These income statements were
prepared by estimating Sales and General Administration
expenses at 6 percent of the cost of production, interest
on the debt financed portion of the plants' book value,*
and depreciation given a ten-year life for plant assets, a
five-year life for pollution control equipment and straight
line depreciation. The tax rate used was 46 percent
* *
The income statements show that at the uncontrolled
level the Mississippi and Kanawha plants are the most
profitable with a return on sales of 18.7 and 15.7 percent,
respectively, with Texas plants at 14.6 percent. Texas is
the largest area in terms of both sales and capital
investment. All three plants are able to achieve up to a
90 percent risk reduction level without a major impact on
profitability. One measure of this fact is the required
price increase each plant would have to obtain on its
products to recover the net income lost at the 85 percent
point. The Mississippi, Texas and Kanawha plants would
require a 0.3, 0.5 and 1.1 percent increase, respectively.
The increases required at the 90 percent level would be
1.1, 8.4 and 9.8 percent for these plants. It is not
possible to determine the feasibility of these increases
at this time due to the unavailability of price elasticity
data.
* It was assumed that the plant would reinvest 10 percent
of its replacement cost per year, and that 30 percent of
plant book value would be financed by debt. Interest
was based on an assumed rate of 12 percent. Inflation
was assumed to be 8.5 percent per year.
** The method used to develop these income statements did
not attempt to account for all of the complexities that
would surround shutdown of significant portions of the
plant. If permanent shutdowns occurred, the remaining
book value in these processes would be written off and
some revenue from salvage value might be realized.
-80-
-------
Exhibit 4-20
INCOME STATEMENT - FISCAL YEAR 1985
MISSISSIPPI SUM PLANT
(Figures in MM Ss)
i
CO
Sales
1.6881
Coat of Production
Pollution control
Operating Coat
Groau Margin
Other Bxponaua
SGlft
Interest
Depreciation
Total Other fcxjJcnaea
Earnings lloforu Tax
Tax
Nut Income
30
'Health Kisk deduction (I)
SO US 90 9S
9!)
1205.7 1206.2 1206.3 1160.0 1160.7 961.7 216.5
615.7 645.7 645.7 604.2 601.2 510.1 M.S.3
4.7
555.3
I
3U.7
22.0
78.2
138.9
416.4
191.5
224.9
5.
555.
38.
22.
70.
139.
416.
191.
22-1.
1
4
7
0
5
2
2
5
7
5
555
3ft
22
70
136
'4 IB
192
225
.5
.1
.3
.0
.6
.9
.2
.4
. fl
6.
550.
36.
21.
78.
136.
413.
190.
221.
4
0
3
4
9
6
4
2
2
13
541
36
22
83
141
403
inr.
_2U
.0
.5
.2
.0
. I
.3
.2
.5
ol
2
428
31
20
00
133
295
135
_m
.7
.7
.8
.9
.8
.5
.2
.8
. \
4.5
66.7
8.7
16.4
73.1
98.2
(31. 5)
0.0
(31 .5)
The results shown here are preliminary and should not be quoted,
-------
Exhibit 4-21
INCOME STATEMENT - FISCAL YEAR 1905
TEXAS SUM PLANT
(Figures in MM $s)
i
00
Saleo
Lean i
Coat of Production
Pollution Control
Operating Coat
Gross Margin
Other tixponsea
SGfcA
Interest
Depreciation
Total Other Expensed
t:arnln
-------
00
u»
I
Exhibit 4-22
INCOME STATEMENT - FISCAL YEAR 1905
KANAWIIA SUM PLANT
(Figures in MM $s)
Sales
Least
Coat of I'roductloii
Pollution Control
Opera ting Coot
(1
119
66
,
SI
4
3
10
17
34
IS
_1S
.4
•>
.1
.*
.0
.0
.0
.0
.6
.9
J
(ill
119
66
1
51
4
3
10
17
34
IS
Ifli
A
.6
.7
.3
.(,
.0
.0 •
.1
.1
.5
.9
,i
.11 ma*
85
119.
66.
2.
50.
4.
3.
10.
17.
33.
IS.
18.
IWU
7
7
2
a
0
1
4
S
3
3
0
UUliUII
90
105.
61.
2.
41.
3.
3.
10.
17.
24.
11.
11.
l*|-
4
4
6
4
7
0
5
2
2
1
1
95
51
33
t
16
2
2
10
14
l
0
_i
.7
.8
.U
.1
.0
.!>
.0
.5
.6
.0
i«
99
0.
0.
0.
0.
0.
1.
9.
11.
(11.
0.
ILL,
0
0
0
0
0
7
4
1
1)
0
1)
Gross
Otliur Expenses
SGtA
Interest
Uopiociatlon
Total Other Expenneu
£arnlnna Uafore Tnx
Tax
Net Income
*Intcinicdiat« rink reduction Icvola (leas titan 601) were not run do to ncglitjibla
impact on profitability.
The results shown here are preliminary and should not be quoted.
-------
At risk reduction levels above 90 percent major plant
impacts in the form of process shutdowns or net losses can
be seen. Dislocations of this magnitude are difficult to
predict due to the market responses which would complicate
the final outcomes.
Sensitivity Analyses
As discussed in Chapter 3, two types of sensitivity
analysis were performed on the chlorinated organics model
to determine sensitivity to error ranges in the data. The
results of these analyses are described below.
The first sensitivity analysis modified tfre exposure
element of the analysis by reducing air exposure by half,
doubling water exposure and increasing solid waste exposure
by a factor of 10. The results shown in Exhibits 4-23 and
4-24 show a cost-effectiveness curve and control strategy
through the 90 percent risk reduction level that is virtu-
ally ' identical 'for both the .sensitivity analysis and the
original analysis. Past the 90 percent point the modified
exposure analysis is more inexpensively controlled. 'The
analysis suggests that the exposure element of the analysis
can be significantly modified without substantially changing
either the cost or most effective method of risk reduction.
Exhibits 4-25 and 4-26 show the results of the second
sensitivity analysis which included only those health ef-
fects which are believed to be of high certainty. Once
again both the cost-effectiveness curve and the selected
control strategies are similar up to the 90 percent risk
reduction level for the sensitivity and the original analy-
sis. This is attributable to the fact that pollution
control equipment aimed at reducing discharges of a single
pollutant often reduces discharges of many pollutants.
Thus a strategy aimed at reducing the risks of a few health
effects can also reduce the risks of many other health
effects.
An additional sensitivity analysis was performed be-
cause the sum plants were developed by generalizing the
orocess, oroduction, pollution and exposure characteristics
of the actual plants in each of the three regions studied.
To test the quality of this generalization the results for
the Mississippi sum plant and the sum of the analyses of
-84-
-------
COST OF HEALTH UISK REDUCTIONS MISSISSIPPI
SENSITIVITY ANALYSIS: MODIFIED EXPOSURE
Coat Effective
Curvo
Modified
Exposure
i
CO
IJl
\
SOO
•400
300
200
100
COST (millions of EOY 1985 |)
.1
.inn I 111 i i 11111 L 11 LI I.LI 1111 n LIU i liiiiiiiiiliiiiiiiiiliiiin.nl LLU.I.I 11111 i M . ,. 1111 •..•..., I L ......,,
0 10 20 30 40 50 60 70 QO 00 100
PERCENT REDUCTION IN HEALTH RISK
THE RESULTS SHOWN HERE ARE PRELIMINARY AND SHOULD NOT BE QUOTED.
-------
Bxhibit 4-24
CONTROL STRATEGIES SELECTED FOR COST-EFFECTIVE
RISK REDUCTION1 - MISSISSIPPI SUM PLANT
SENSITIVITY ANALYSIS: MODIFIED2 EXPOSURE
I'ROCKSS
iiiui.Tii EFFECT RISK lU'inicruiN (x)—
50 fli SO
9S
1. Chlorlnatlnit of
Huthaiic
2, llyiirochlur liiatloii
of Hut liana I/
CMorlnatlon of
Mutliyl Chloride
3. Chlorlnatlun of
llydracarlione
4. Chlorlnatlun of
EI)C I
}. Direct Chlarinatlon
of Ethyl cue
6. Oxyclilodiiutloii
of Ethylcn*
7. ryrolyula of
EDO
0. Clilorlnut Ion of
Vlityl Uilorlda
9. Chlurluatloii of
KIU; it
10. Oehydiuclilorlnetlon
of 1.1.2 Trtchloro-
cilionn
11. llyiltoclilor {nation
of Vinyl Menu
Chlorldu
HA
AheorLcr
Uuate liicln.
Waal.li 1 nc In.
Shutdown
Air Incln.
Maata Incln.
Uncto Incln.
Air Incln.
Mania Incln,
llo*te Inoin.
HA
SliutUoun
U.\
Almorkur
Uuutc liicln.
Uuat« Incln.
Sliulilnun
Air Incln.
U«etc Incln.
Waste Incln.
i
Air Incln.
Uunta Incln.
Secure l.r
Hunt a Incln.
HA
Shutdown
HA
Auuortcr
Uuuta Inc. In.
Uatt* Incln.
Shutdown
Air Incln.
Condenser III
Want* Incln.
Uaate Incln.
Air Incln.
Maatu Incln.
Secure It
Vtttlu Incln.
IIA
Sliiildown
HA
Abaorkur
Act. SL
Uaute Incln.
Secure \.f
Conildiiaar lit
Act. SL
Uauta Incln.
Shutdown
Air Incln.
Uauta Incln.
Air Incln.
Uaata Incln.
Air liicln.
Waat* Iiicin.
Secure If
Act. SI.
Haute Incln.
Secure l.f
HA
Air Incln.
Slintdutm
HA
Atiuiifttr
ConJunuar III
Fugitive CTI..
Act. Sl./ba
Uaete Incln.
Secure I.F
Shutdown
Shutdown
Air Incln.
Uaate Incln.
Air Incln.
AcL. SL/63
Muatu Incln.
Air Incln.
Uaata Incln.
Secure l.f
Act. SI./SS
Maale Incln.
Secure I.F
HA
Air Jncln.
Shutdown
IIA
Abuorber
ConJcnucr III
Act. SL/SS
Waat* Incln.
Secure LF
Shutdown
Shutdown
Air Incln.
Coiidenaer III
Maete Incln.
Air Incln.
Conduuaer HI
Act. SL/SS
Waate Incln.
Air Incln.
Waate Incln.
Secure LF
Act. SI./SS
Waate Incln.
Secure I.F
NA
Air Incln.
Shutdown
NA
Shutdown
Shutdown
Shutdown
Air Incln.
Coiidenaitr III
Fugitive CTI..
Act. SI./SS
Waute Incln.
Shutdown
Act . In.: In.
Act. SI./SS
Secure: l.f
£iit|iack
Air Incln.
Act. SL/SS
Secure I.F
NA
Air liicln.
Act. SL/SS
Shutdown
I
00
CTv
I
' Uali»j 'ijuollty of life* health effect welyhlImj achcme.
^ llelallve to standartl. ux|>neur3 In mu 11 L|>11 «d by .S for air, 2 for water and 10 fot* tiAzardoua
llotui Any wante not Inctnccnteil or aeuure lamlflllcil la aent to a aanllary Idiidflll.
-------
Exhibit 4-25
COST OF HEALTH RISK REDUCTION: MISSISSIPPI
SENSITIVITY ANALYSIS: HIGH CONFIDENCE HEALTH EFFECTS
All Health
Effects
High Confidence
Hoalth Effecta
oo
•vj
I
500
•400
300
200
100
COST (mllllona of EOY 1965 |)
-too
i i i i in i.Li.i-t LLI-II il u 11 i i i
10
20
30
-tO
i.t I 1.1 J M.I i,«J.I.UOJ
SO 60
70
60
90
100
PERCENT REDUCTION IN HEALTH RISK
THE RESULTS SHOWN HERE ARE PRELIMINARY AND SHOULD NOT BE QUOTED.
-------
Exhibit 4-26
CONTROL STRATEGIES SELECTED FOR COST-EFFECTIVE RISK REDUCTION
MISSISSIPPI SUM PLANT
SENSITIVITY ANALYSIS: HIGH CONFIDENCE HEALTH EFFECTS
I-KCCKUS
-IIIIAI.TII KFFeCT RISK REDUCTION «)-
I
00
00
I
1. Clilorlnatlon of
Mctlmnc
2. lly.liocliloi InaCloti
of Hethanol/
Chlixlnutlun of
Methyl Chloildo
3. Cli lotl lint luu uf
llyilrucarljona
4. Chliirinal Jon uf
I-DC 1
3. Direct Chlarlnallon
ol I'Uhylunu
(,. Onycliloi Imit Ion
llf Kill) luill!
/. 1 )T..I) II IS ..(
Kin:
8. Clilor in/illoii uf
Vinyl CM.. ride
!). Cli tut ln.it lull of
i:i»: 11
1U. IU-liy.linclilorJii.il Ion
ol 1,1,2 Ulchloro-
et Ji'Mit;
1 1 . llyilmcliloi ln.it Ion
ul Vinyl till-in
Chlnr Idi:
II
NA
Al»iarl>cr
Unuto 1 no in.
Wautu Inoln.
Sliutilown
Air Incln.
Wasto 1 uc In,
Uuutc 1 11 tin.
Air In-. In.
Waste IMC In.
Uattlfe liirln.
NA
SlinliK'Wil
Jll
HA
Alinofliut
UilHlU lilt III.
W/idlu Int In.
SllulU«wii
Air 1 in: In.
Uaula lutln.
Air Int. In.
UiiHlo Jiirln.
All In. In.
ifilHdl IllC 111.
Sutum I.I'
Uiiutu die In.
HA
Slitiltltiwn
50
NA
Almutbcr
Uniite Inelit.
Uunlo Incln.
SlinCiliiun
Air Incln.
Woule Incln.
Air Incln.
Uuatu Incln.
Air 1m: In.
Uaata Incln.
Suiuire l.f
Uaate Incln.
NA
Air In.: In.
Shut Joint
05
NA
/bsotbtr
Wuale Incln.
Secure LP
Vlaatc Incln.
Shutdown
Air Incln.
Condcitoei til
H.iate Iiicln.
Air Incln.
Act. SI./SS
WnuLe Incln.
All Incln.
Mauce Incln.
Sccuni I.K
Uautn Incln.
Sctutc l.f
NA
AJ. liicin.
!ilintil»wn
•JO
NA
Abaorlui
Cunilunucr 111
Ace. SL/SS
Waata Incln.
Secyre LF
CumlciiRcr 111
Hnste Incli).
Sliutilown
Air Incln.
Coiulaiincr III
Hnslc lnclii.
Air Inclu.
Cuinli-iiaor til
Ai l . Sl./Sii
U.iule Inrln.
Air Incln.
llu a Ic lin-ln.
Set tut |.F
Acr. bl./«S
Waste Incln.
Sccuru l.f
NA
Air Incln.
Shutdown
'Jj
NA
Abuurhcr
ConJeiiaer HI
Act. si./as
W.iatc Incin.
Secure l.P
Shutdown
Shut down
Air Incln.
(,'oiidciittcr III
IMS to Incln.
Air Incln.
Coiidciincr III
Act. SI./SS
Wiiate Incln.
Air 1 uc in.
Art. SI./SS
ll.iale Incln.
Secure II-'
Air Int In.
Act. SI./SS
Uiisd: Incln.
Secure IK
NA
Air Incln.
Shutdown
9'J
NA
Shutdown
,Shuld»wii
Shutdown
Air Incln.
Oii.li-nl>.-.r HI
I'll i; (I I vi: C( 1 .
MiuiKK 'nci.n, ....
Air liifln.
Condenser | | i
Fug It tvc I'l 1 .
Act. si./;:.-:
IV till t: (lit III.
r.ni. ,. k
Al< Incln.
Act. SL/SS
:M:rni't! l.K
Ciil|..n k
tihut down
HA
Shutdown
Slmtili>wn
IhilitB ''|n:illly of life' health effect wul)ilit liif, uclieii.u.
Nuiu; Any wasli- nut lncliiurntf.il or nur.iirt: I nn.lf 11 l^.l la atMit i« « snnltniry lundfill.
-------
each individual plant were compared. In Exhibit 4-27 the
sum plant's cost-effectiveness curve is compared to the sum
of the cost-effectiveness curves for each of the seven
plants. Although more sophisticated techniques for gener-
alizing exposure should be developed to increase the accu-
racy and value of generalized plant models, the curves are
very similar. This suggests that the Mississippi sura plant
generalization is an accurate representation of the seven
plants in the region.
A final sensitivity analysis was performed to examine
the maximum individual risk levels of the most exposed pop-
ulation subgroups. One of the largest chlorinated solvent
plants located in a densely populated area was chosen for
this analysis. Further, only cancer risks were estimated,
as the CAG unit risk factors are the only accepted incidence
measures. For the particular plant examined, six carcinogen
pollutants are emitted and the risks are summed to compute
the total risk to each population subgroup. The results of
this analysis indicate that at the uncontrolled level 96
people would have an annual individual cancer risk in the
range of 10~4 to 10~5. Another 4490 people would have
risks in the range of 10"5 to 10~6.
COPPER SMELTING INDUSTRY
This section summarizes the preliminary results of the
toxics integration study of the copper smelting industry
and is organized as follows:*
• Description of the industry,
• Pollution problems of concern,
-• Cost-effective control strategies,
• Alternative policies examined,
• Cumulative economic impacts, and
• Sensitivity of results.
The copper smelting industry study will be completed by
late August.
-89-
-------
lixhibit 4-27
COST OF HEALTH RISK REDUCTION
MISSISSPPI COST EFFECTIVE CONTROL CASES (1985)
Mlaalaalppi
Sum Plant
1
O
I
500
400
300
200
100
COST (millions of EOY 1985 |)
Sum of
Individual Plants
. -B—
-100 l'i i in i ml numiil mi niii 11 mini i liiii.tiiiil t ii i u.i.iilii tin 11 iluijjiiMl if 14t111.1 • 11 • i... t
0 10 20 30 40 50 60 70 00 90 100
PERCENT REDUCTION IN HEALTH RISK
THE RESULTS SHOWN HERE ARE PRELIMINARY AND SHOULD NOT BE QUOTED.
-------
Description of Industry
Copper smelting is a segment of the copper industry
which includes raining, milling, smelting and refining.
The principal product of copper smelters — anode copper
— is produced 'via a series of roasting, smelting and
converting processes (see Exhibit 4-28). These are high
temperature, energy intensive processes. As shown in Ex-
hibit 4-29, 13 plants, owned by 5 companies, produce 1.5
million metric tons per year of primary copper with a sales
value of approximately $2.8 billion (1981 data). These
plants are located for the most part in southwestern states
(Arizona, Utah, and New Mexico), close to the copper mines.
Copper smelters are the largest single sources of
sulfur dioxide (SC>2) emissions and are significant sources
of particulate emissions. Many smelters are not in compli-
ance with current regulations for these pollutants. Copper
companies can apply for extensions . in compliance deadlines
for SC>2 emissions for financial reasons by applying for
a nonferrous smelter order (NSO) under Section 119 of the
Clean Air Act. Because of the financial difficulties the
industry is currently experiencing and the significant air
emissions, EPA chose to use the industry approach to analyze
the copper smelting industry.
Copper smelters produce large amounts of solid wastes
(2.5 tons of slag per ton of copper product) as well as
substantial air emissions. Most of these solid wastes are
nonhazardous.* There is currently no model of the transport
of heavy metals to the ground water. Therefore, solid waste
has not been included in this analysis.
At most plants there are no water pollutants discharged
except during periods of net rainfall. Thus, water pollu-
tion is not a factor in this analysis.
Pollution Problems of Concern
Six major air pollutants have been considered in this
analysis — sulfur dioxide (SC>2), total suspended particu-
lates (TSP), arsenic, lead, cadmium and mercury. Air
* In fact, some experts believe that the slag can be used
to store hazardous wastes.
-91-
-------
Exhibit 4-28
COPPER SMELTER* PRODUCTION
MATERIAL BALANCE
(Tons per Day)
FUGITIVES FLUE GAS
(24.5) (5/1.7)
FUGITIVES FLUE GAS
(24.7) (972.7)
CONCENTRATES
CQISJ
I
lO
N>
I
.SLAG
((69S.4)
"SMELTER"
-REFINERY"
* This smelter does not include the roasting process which would precede
the reverberatory furnace. Nine of the thirteen smelters studied have
a roaster or rotary kiln drier.
Source: U.S. Bureau of Mines and PEDCo Environmental, Inc.
-------
emissions can result in serious health problems such as
respiratory ailments from 303 and TSP, and cancer, rauta-
genicity and neurobehavioral toxicity from toxic metals
(notably arsenic and lead).
•9
Current controls have tended to focus on stack rather
than fugitive emissions. Sulfur dioxide process emissions
are normally controlled by scrubbers and acid plants which
convert the gas to sulfuric acid. Particulate emissions
are controlled with the use of bag-house fabric filters
and electrostatic precipitators (ESP).
The fugitive emissions are currently not controlled at
most smelters. The control of these emissions would require
hoods and ventilation systems which collect the emissions
and vent them into a stack or into one of the process con-
trol systems.
Cost-Effective Strategy
A cost-effectiveness curve is being developed for each
smelter included in Exhibit 4-29. Exhibit 4-30 displays a
curve for a typical smelter and Exhibit 4-31 presents the
control options selected for each.process unit at each level
of health risk reduction. The format of these exhibits _ is
similar to those presented for the chlorinated organics
case study.
Preliminary results indicate that significant reduc-
tions in health risk can be achieved for many smelters at
relatively low cost if fugitive controls are installed.
Stack emissions account for the majority of the emissions
from an uncontrolled smelter, and are cheaper to control
on a per-pound basis than fugitive emissions. However,
because stack emissions are discharged at high levels
(normally 500 feet or more), they result in far less expo-
sure than do fugitive emissions. Thus, fugitive controls
are frequently a more cost-effective manner of reducing
health risk.
As shown in Exhibit 4-31, the use of hoods and ventila-
tion systems at the two processes can achieve a reduction
in health risk of 90 percent. Installation of a flue scrub-
ber (stack control) brings about some further reduction in
health risk at a significant cost. The most cost-effective
means of achieving further reduction in health risk is by
curtailing production.
-93-
-------
Exhibit 4-29
PRIMARY COPPER SMELTERS*
(Thousands, of Metric Tons, Copper Content)
Company
ASARCO, Inc.
Location of Plant
El Paso, Texas
Hayden, Arizona
Tacoma, Washington
Annual
Capacity
104
163
91
Inspiration
Consolidated
Copper Company
Inspiration, Arizona
136
Kennecott Copper Co,
McGill, Nevada
Hurley, New Mexico
Hayden, Arizona
Garfield, Utah
45
73
73
254
Newraont/
Magma Copper Co,
San Manuel, Arizona
182
Phelps Dodge Corp,
Douglas, Arizona
Morenci, Arizona
Ajo, Arizona
Hidalgo, New Mexico
115
161
64
127
Source: Mineral Facts and Problems, Bureau of Mines, 1980
* Excluding three small smelters with insignificant sulfu:
dioxide emissions.
-94-
-------
Exhibit 4-30 •
COST OF HEALTH RISK REDUCTION
PLANT A COST-EFFECTIVENESS CURVE (1085)
QUALITY OF LIFE CURRENT CONTROL COMPLIANCE CONTROL
HEALTH WEIGHTS
I
VO
LSI
I
30000
25000
20000
15000
10000
3000
COST (THOUSANDS OF EOY 1005$)
mrmrT
-5000
to
20
HJf.yij-'TiA>.4..1-1-1-l-l-l-l-'-V-H-1-1 j-t ^4 (-14
40 50 SO
PERCENT REDUCTION IN HEALTH RISK
THESE RESULTS ARE PRELIMINARY AND SHOULD NOT BE QUOTED.
jJaajjatxj-iXu_ua-M-u.Ljjj. 10x1x1.
70 BO 60 100
-------
Exhibit 4-31
CONTROL STRATEGIES SELECTED FOR COST-EFFECTIVE RISK REDUCTION1
PLANT A
I'KOCKSS
I. Kiivtii burnt . tn Id
tSI'
Fluu scrub
ll»t til'
Ac Itl (ilant
""("•'it r "f life" IK: a ltd olfect uelglttlii); nrhciuu.
-------
It should be noted that stack controls are important
for reducing environmental effects such as crop damage and
visibility impairment. For many smelters the secondary
(welfare-related) air quality standard requires more strin-
gent control than the primary (health-related) standard.
In addition,- the health effects considered here*are the
result of long-term exposure. Stack controls may be more
important in preventing extremely high S02 concentrations
for short periods of time and their related health conse-
quences .
In a few cases, smelters are so isolated that no one
lives within 10 or 20 miles of the plant. For these
smelters, fugitive controls bring about little or no reduc-
tion in health risk. Stack controls have a greater effect
in these cases. However, further analysis would be required
to determine whether the actual level of health risk in
these cases warrants either stack or fugitive controls.
The current control level for most of the smelters is
-far from the cost-effectiveness curve since current con-
trols have focused on stack rather than fugitive emissions.
Exhibit 4-30. illustrates the current control point for
Plant A. As can be seen in the exhibit, the current controls
achieve a 11.5 percent reduction in health risk at a cost
of $7.6 million.
Tn many cases, the additional controls required to
achieve compliance again focus on stack rather than fugitive
emissions. Thus, the compliance control point will also be
far from the cost-effectiveness curve except in those cases
where fugitive controls are being required. Exhibit 4-30
illustrates the compliance control point. Once again, very
little health improvement is achieved given the high level
of expenditures. A 17.5 percent reduction in health risk
is achieved at a cost of $13 million.
Alternative Policies
Alternative policies for toxic pollutant control at
smelters will be analyzed, and the results will be reported
in late August.
-97-
-------
Cumulative Economic Impacts
The copper smelter study will assess the financial and
economic implications of two alternative control strategies
— compliance controls and fugitive controls. The results
.of this study will be available in late August.
Sensitivity Analysis
For most smelters, the cost-effectiveness of fugitive
controls for reducing health risk outweighs the cost-effec-
tiveness of stack, controls by a factor of 50. Thus, the
costs of control, emission rates, exposure models and/or
the health effects would have to be substantially in error
in order for the resulting control strategy to change.
While the errors are thought to be significant, particularly
in the exposure and health area, the errors are not thought
to be large enough to make the results invalid. Further
sensitivity analysis is being carried out and will be
reported in late August.
-98-
------- |