United States
Environmental Protection
Agency
Office of Air Quality
Planning and Standards
Research Triangle Park NC 27711
EPA-450 5-80-001
Jum> 1979
Air
The Economic Impact
of Vapor Control
Regulations on the
Bulk Storage Industry
-------
EPA-450/5-80-001
The Economic Impact
of Vapor Control
Regulations on the
Bulk Storage Industry
by
Richard J. McCarthy
Arthur D. Little, Inc.
37 Acorn Park
Cambridge, Massachusetts 02140
l I'A 1'inji" i othi "i iiiomdbl lull-
Prepared for
U.S. ENVIRONMENTAL PROTECTION AGENCY
Office of Air, Noise, and Radiation
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
June 1979
-------
This report is issued by the Environmental Protection Agency to report
technical data of interest to a limited number of readers. Copies are
available free of charge to Federal employees, current contractors and
grantees, and nonprofit organizations - in limited quantities - from the
Library Services Office (MD-33) , U.S. Environmental Protection Agency,
Research Triangle Park, North Carolina 27711; or for a nominal fee,
from the National Technical Information Service, 5285 Port Royal Road,
Springfield, Virginia 22161.
This report was furnished to the Environmental Protection Agency by
Arthur D. Little, Inc., 37 Acorn Park, Cambridge, Massachusetts 02140.
The contents of this report are reproduced herein as received from
Arthur D. Little, Inc. The opinions, findings, and conclusions expressed
are those of the author and not necessarily those of the Environmental
Protection Agency. Mention of company or product names is not to be
considered as an endorsement by the Environmental Protection Agency.
Publication No. EPA-450/5-80-001
11
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TABLE OF CONTENTS
PAGE
LIST OF TABLES iii
LIST OF FIGURES vii
I. EXECUTIVE SUMMARY I.I
A. Introduction ; I.I
B. Market Audit ; 1.2
C. Control Strategies 1.10
D. Closure Analysis , 1.16
E. Employment and Cost Impacts 1.23
II. MARKET AUDIT OF BULK TERMINALS II.1
A. Introduction II.1
B. Audit Summary II.5
C. Bulk Terminal Trends 11.15
III. MARKET AUDIT OF BULK PLANTS III.l
A. Introduction III.l
B. Audit Summary III.3
C. Bulk Plant Trends III.10
IV. VAPOR CONTROL STRATEGIES AND SYSTEM COSTS IV.1
A. Introduction IV. 1
B. Vapor Control Options IV.1
C. Vapor Control System Costs IV.13
V. BULK STORAGE MODELS V.I
A. Introduction V.I
B. Bulk Storage Models V.2
C. Cost Pass Through Assumptions V.8
VI. BULK TERMINAL IMPACTS VI. 1
A. Introduction VI.1
B. Bulk Terminal Population Subject to Vapor Control VI.1
C. Closure Analysis VI.3
D. Terminal Impacts VI. 19
E. Tank Trailer Costs VI.22
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TABLE OF CONTENTS
(continued)
PAGE
VII. BULK PLANT IMPACTS VII.1
A. Introduction VII.1
B. Bulk Plant Population Subject to Vapor Control VII.I
C. Closure Analysis VII.4
D. Bulk Plant Impacts VII.20
APPENDIX A A.I
APPENDIX B B.I
APPENDIX C C.I-
APPENDIX D D.I
APPENDIX E , E.I
APPENDIX F F.I
APPENDIX G G.I
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LIST OF TABLES
TABLE NO. PAGE
I.I 1978 BULK TERMINAL POPULATION 1.4
1.2 GASOLINE TERMINAL DISTRIBUTION BY SIZE AND
OWNERSHIP 1.5
1.3 1978 BULK PLANT POPULATION 1.8
1.4 GASOLINE BULK PLANT DISTRIBUTION BY SIZE AND
OWNERSHIP 1.9
1.5 VAPOR CONTROL OPTIONS AT GASOLINE BULK STORAGE
FACILITIES 1.14
1.6 COMPETITIVE PASS THROUGH ASSUMPTIONS 1.18
1.7 BULK PLANT CLOSURES BECAUSE OF INACCESSIBILITY
OF CAPITAL 1.20
1.8 BULK PLANT CLOSURES BECAUSE OF INSUFFICIENT
PROFITABILITY 1.22
1.9 CLOSURE IMPACT OF THE PROPOSED VAPOR CONTROL
OPTIONS '. 1.24
1.10 EMPLOYMENT IMPACT OF THE PROPOSED VAPOR CONTROL
OPTIONS 1.25
1.11 TOTAL COST OF THE PROPOSED VAPOR CONTROL OPTIONS.. 1.26
II.1 1978 BULK TERMINAL POPULATION II.7
11.2 1978 REGIONAL PRODUCT SUPPLY/DEMAND BALANCE 11.9
11.3 1978 REGIONAL GASOLINE SUPPLY/DEMAND BALANCE 11.10
II.4 BULK TERMINAL STORAGE DISTRIBUTION 11.12
II.5 BULK TERMINAL THROUGHPUT DISTRIBUTION 11.13
II.6 1978 BULK TERMINAL OWNERSHIP 11.14
II.7 GASOLINE TERMINAL DISTRIBUTION BY SIZE AND
OWNERSHIP 11.16
II.8 1978 BULK TERMINAL EMPLOYMENT 11.17
11.9 A COMPARISON OF RECENT FORECASTS OF U.S. GASOLINE
CONSUMPTION 11.18
III.l 1978 BULK PLANT POPULATION.... III.5
III.2 NON-GASOLINE BULK PLANT DISTRIBUTION BY REGION
AND OWNERSHIP III.6
III.3 BULK PLANT STORAGE DISTRIBUTION III.8
III.4 BULK PLANT THROUGHPUT DISTRIBUTION III.9
m
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LIST OF TABLES
(continued)
TABLE NO. PAGE
III.5 1978 BULK PLANT OWNERSHIP III.11
III.6 GASOLINE BULK PLANT DISTRIBUTION BY SIZE AND
OWNERSHIP III.12
II1.7 1978 BULK PLANT EMPLOYMENT II1.13
III.8 MARKET RATIONALIZATION OF GASOLINE BULK PLANTS,
1978-1983 III.16
IV.1 BASE CASE EMISSIONS AT BULK STORAGE FACILITIES... IV.5
IV.2 NATIONAL BENZENE EMISSIONS UNDER VAPOR CONTROL
OPTIONS IV. 9
IV.3 VAPOR CONTROL OPTIONS AT GASOLINE BULK STORAGE
FACILITIES IV. 12
IV.4 ESTIMATED 1978 CONTROL COSTS FOR PRIMARY VAPOR
CONTROL SYSTEMS AT MODEL TERMINALS IV. 14
IV.5 ESTIMATED 1978 CONTROL COSTS FOR STAND-BY VAPOR
CONTROL SYSTEM AT MODEL TERMINALS IV.16
IV.6 ESTIMATED 1978 COST OF VAPOR CONTROL IN GASOLINE
TANK TRAILERS....... IV.18
IV.7 ESTIMATED 1978 COSTS TO INSTALL A VAPOR BALANCE
SYSTEM AT BULK PLANTS FOR INCOMING TRUCK
TRANSPORTS IV .20
IV.8 ESTIMATED 1978 COSTS TO INSTALL A VAPOR BALANCE
SYSTEM AT BULK PLANTS FOR INCOMING AND
OUTGOING TRUCKS IV.21
IV.9 ESTIMATED 1978 COSTS TO INSTALL A SINGLE PRIMARY
VAPOR REFRIGERATION SYSTEM AT BULK PLANTS... IV.22
IV.10 ESTIMATED 1978 COSTS TO INSTALL A PRIMARY VAPOR
INCINERATION SYSTEM AT BULK PLANTS IV .23
IV.11 ESTIMATED 1978 COSTS TO INSTALL A PRIMARY
REFRIGERATION AND A STAND-BY INCINERATION
SYSTEM AT BULK PLANTS IV .24
IV.12 ESTIMATED 1978 COSTS TO INSTALL A PRIMARY
INCINERATION AND A STAND-BY INCINERATION
SYSTEM AT BULK PLANTS IV.25
V.I LARGE MARINE TERMINAL PROTOTYPE........... V.3
V.2 ESTIMATED INVESTMENT PROFILE OF LARGE MARINE
TERMINAL PROTOTYPE. V .4
IV
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LIST OF TABLES
(continued)
TABLE NO. PAGE
V.3 ESTIMATED 1978 NET INVESTMENT OF BULK STORAGE
PROTOTYPES V .5
V.4 ESTIMATED 1978 OPERATING EXPENSES OF LARGE
MARINE TERMINAL PROTOTYPE V.6
V.5 ESTIMATED 1978 OPERATING EXPENSE OF BULK STORAGE
PROTOTYPES V .7
V.6 REQUIRED 1978 TARIFF (PRE-VAPOR CONTROL) OF
LARGE MARINE TERMINAL PROTOTYPE V.9
V.7 REQUIRED TARIFF OF BULK STORAGE PROTOTYPES TO
COVER ESTIMATED 1978 COSTS V.10
V.8 EXAMPLE OF COMPETITIVE ECONOMICS OF TWO BULK
STORAGE FACILITIES V.ll
VI.1 PETROLEUM BULK TERMINALS HAVING NO GASOLINE
THROUGHPUT VI. 2
VI.2 PETROLEUM BULK TERMINALS SUBJECT TO THE
PROPOSED VAPOR CONTROL OPTIONS VI .4
VI.3 DISTRIBUTION OF GASOLINE TERMINALS SUBJECT TO
THE PROPOSED VAPOR CONTROL OPTIONS VI .6
VI.4 ESTIMATED 1978 VAPOR CONTROL CAPITAL REQUIREMENTS
OF BULK TERMINALS VI .8
VI. 5 BORROWING CRITERIA USED IN ANALYSIS VI .10
VI.6 TERM DEBT AS A PERCENT OF AFTER-TAX CASH FLOW AT
BULK TERMINALS VI.13
VI.7 CHANGE IN DAILY GASOLINE BREAKEVEN THROUGHPUT AT
BULK TERMINALS BECAUSE OF VAPOR CONTROL
COSTS VI .1 6
VI.8 BULK TERMINALS ROI AND GASOLINE TARIFF IMPACTS VI.18
VI.9 BULK TERMINAL CLOSURES BECAUSE OF VAPOR CONTROL
ECONOMICS VI .20
VI.10 VAPOR CONTROL EMPLOYMENT AND COST IMPACTS AT
BULK TERMINALS VI .21
VI.11 COST OF VAPOR CONTROL AT BULK TERMINALS VI.23
VI.12 CAPITAL COST OF THE PROPOSED VAPOR CONTROL OPTIONS
AS A PERCENT OF THE PETROLEUM INDUSTRY'S
1977 ENVIRONMENTAL EXPENDITURES VI.24
VI.13 ESTIMATED 1978 GASOLINE TRAILER POPULATION VI.26
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LIST OF TABLES
(continued)
TABLE NO. PAGE
VI.14 TOTAL COST OF INSTALLING VAPOR CONTROL EQUIPMENT
ON THE GASOLINE TANK TRAILER FLEET VI.27
VII.I PETROLEUM BULK PLANTS SUBJECT TO THE PROPOSED
VAPOR CONTROL OPTIONS VI1.2
VII.2 DISTRIBUTION OF GASOLINE BULK PLANTS SUBJECT
TO THE PROPOSED VAPOR CONTROL OPTIONS VII .5
VII.3 ESTIMATED 1978 VAPOR CONTROL CAPITAL REQUIREMENT
OF BULK PLANTS VI1.7
VII.4 TERM DEBT AS A PERCENT OF AFTER-TAX CASH FLOW
AT BULK PLANTS VI1.9
VI1.5 BULK PLANT CLOSURES BECAUSE OF INACCESSIBILITY
OF CAPITAL VII.11
VII.6 CHANGE IN DAILY GASOLINE BREAKEVEN THROUGHPUT
AT BULK PLANTS BECAUSE OF VAPOR CONTROL
COSTS VII. 13
VI1.7 BULK PLANT ROI AND GASOLINE TARIFF IMPACTS... VI1.14
VII.8 BULK PLANT CLOSURES BECAUSE OF INSUFFICIENT
PROFITABILITY VII.16
VII.9 BULK PLANT CLOSURES BECAUSE OF VAPOR CONTROL
ECONOMICS RESULTING FROM THE NOJC COST
SCENARIO VII .17
VII.10 BULK PLANT CLOSURES BECAUSE OF VAPOR CONTROL
ECONOMICS RESULTING FROM THE HOUSTON-
GALVESTON COST SCENARIO VII.18
VI1.11 BULK PLANT CLOSURES BECAUSE OF VAPOR CONTROL
ECONOMICS RESULTING FROM THE COLORADO
APCD COST SCENARIO VI1.19
VII.12 EMPLOYMENT IMPACT AT BULK PLANTS BECAUSE OF '
VAPOR CONTROL ECONOMICS. VI1.21
VI1.13 TOTAL COST OF VAPOR CONTROL AT BULK PLANTS VI1.22
VII.14 COST OF VAPOR CONTROL AT BULK PLANTS RESULTING
FROM THE NOJC COST SCENARIO VI1.23
VI1.15 COST OF VAPOR CONTROL AT BULK PLANTS RESULTING
FROM THE HOUSTON-GALVESTON COST SCENARIO VI1.24
VII.16 COST OF VAPOR CONTROL AT BULK PLANTS RESULTING
FROM THE COLORADO APCD COST SCENARIO VII.25
VI
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LIST OF FIGURES
FIGURE NO. PAGE
I.I ESTIMATED 1983 BULK TERMINAL POPULATION BEFORE
VAPOR CONTROL IMPACTS 1.7
1.2 ESTIMATED 1983 BULK PLANT POPULATION BEFORE VAPOR
CONTROL IMPACTS 1.11
II. I GASOLINE DISTRIBUTION NETWORK II.2
II.2 GASOLINE TRANSPORTATION COSTS GULF COAST TO NEW
YORK SPOT TANKER RATES VS. COLONIAL PIPELINE. II.3
II.3 PETROLEUM ADMINISTRATION FOR DEFENSE DISTRICTS.... II.8
II.4 ESTIMATED 1983 BULK TERMINAL POPULATION BEFORE
VAPOR CONTROL IMPACTS 11.20
III.l GASOLINE DISTRIBUTION NETWORK III.2
III.2 ESTIMATED 1983 BULK PLANT POPULATION BEFORE VAPOR
CONTROL IMPACTS , III.15
IV.1 GASOLINE DISTRIBUTION NETWORK IV.2
IV.2 GASOLINE TANK TRUCK LOADING METHODS IV.3
IV.3 VAPOR BALANCED TO TRUCK TRANSPORT DURING STORAGE
TANK LOADING IV.8
IV.4 VAPOR BALANCE SYSTEMS AT BULK STORAGE PLANTS IV.10
VI.1 DISTRIBUTION OF BULK TERMINALS SUBJECT TO
VAPOR CONTROL VI.5
VI.2 AFTER-TAX CASH FLOW AS A DETERMINANT FOR SECURING
A COMMERCIAL LOAN FOR VAPOR CONTROL EQUIPMENT VI.12
VI.3 BREAKEVEN ANALYSIS OF THE MARINE TERMINAL
POPULATION VI. 17
VII.I DISTRIBUTION OF BULK PLANTS SUBJECT TO
VAPOR CONTROL VII.3
VII
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I. EXECUTIVE SUMMARY
A. INTRODUCTION
The U.S. Environmental Protection Agency (EPA) is considering
regulations which would control total benzene emissions on a national
basis. A significant portion of these benzene emissions is contained
in the gasoline vapors released during the normal gasoline transfer
operations of petroleum bulk terminals and bulk plants. Possible
strategies for controlling benzene in the bulk storage industry in-
clude the on-site collection and disposal of gasoline vapors and the
collection and transportation of these vapors to a common or central
point within the gasoline marketing network for ultimate disposal.
This study represents only one approach to the benzene problem.
The EPA has requested Arthur D. Little, Inc. (ADL) to assess the
economic impacts of several vapor control' strategies which would
reduce the benzene emissions of the bulk storage industry. Specifically,
Arthur D. Little has been asked to:
Identify and characterize the bulk storage industry
Determine the number of facility closures expected
to occur because of the proposed vapor control
regulations
t Estimate the employment levels displaced by these
closures, and
t Calculate the national cost of installing and
operating vapor control systems in the remaining
bulk storage population.
In this chapter, we will present an overview of the methodological
approach used in performing this analysis and a summary of our results.
1.1
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B. MARKET AUDIT
Because no comprehensive data base exists on the bulk storage
industry, a detailed market audit of all bulk terminals and bulk
plants was conducted. The purpose of this task was to profile the
physical (e.g. number, size and location) and operational (e.g. product
mix, gasoline throughput and employment) characteristics of the industry.
Additionally, the competitive environment within which these facilities
operate and all significant industry trends were identified. Arthur
D. Little compiled the data necessary to conduct this audit from
government, industry and trade association reports, industry and trade
association interviews, and in-house sources. The principal findings
of the market audit follow.
1. Historical Market Environment
The conditions which induced the petroleum companies to over-
build their marketing networks in the 1950's and early 1960's
disappeared by the end of the 1960's. The integrated oil companies
began to view their marketing and/or refining operations as separate
profit centers to be judged on "stand alone" economics. Marketing
activities, including bulk storage operations, could no longer be
subsidized by upstream profits and were now expected to recover all
operating expenses as well as to provide an acceptable return on
capital. "Stand alone" economics caused gasoline marketers, both
majors and independents, to review their marketing strengths and to
re-evaluate their overall corporate marketing strategies. Many of
the integrated petroleum companies shifted their marketing philosophy
from volume maximization to profit maximization. Investment in new
marketing facilities declined and older, marginal terminals, bulk
plants and service stations were sold, consolidated or closed as
market conditions rendered them uneconomic. Through this "market
rationalization" process, some companies scaled down their marketing
activities or withdrew entirely from selected areas where they had
over-extended their supply or marketing capabilities. The trend of
1.2
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"market rationalization," which was well underway by the early 1970's,
was accelerated by the market conditions resulting from the OAPEC
Embargo of 1973-1974.
2. Bulk Terminals
In 1978, there were an estimated 1,751 petroleum bulk terminals
in the U.S. (Table I.I). This figure represents a decline of 9% from
2
the 1,925 terminals identified by the Department of Commerce in 1972.
Approximately 55% of these facilities are marine terminals receiving
petroleum product by tanker or barge, while the remaining 45% are
pipeline terminals. Of the 1978 bulk terminal population, an estimated
1,511 terminals or 86% store gasoline. While the total number of bulk
terminals declined between 1972 and 1978, total product storage increased
approximately 30% from 593 million barrels to 771 million barrels.
Total gasoline storage capacity in 1978 was estimated to be 296 million
barrels or 38% of total product storage.
Almost three-quarters, or 72%, of the gasoline bulk terminals in
3
the U.S. are owned by the major and semi-major oil companies (Table
1.2). Independents, including regional refiners, marketers/wholesalers,
4 5
jobbers and bulk liquid warehousers, own the remaining 28%. Majors
own a proportionately greater number of the larger terminals than do
the independents. While majors on average own approximately 72% of
the gasoline terminals, they own over 84% of the terminals having a total
This figure does not include crude or LPG terminals which were excluded
?from consideration in this study.
^Bureau of Census, 1972 Census of Wholesale Trade.
The largest 22 gasoline marketers based on total assets, hereafter
referred to as simply majors. For a listing of the individual companies
.comprising these two groups, see Appendix B.
A jobber is a petroleum distributor who purchases refined product from
a refiner or terminal operator for the purpose of reselling to retail
outlets, commercial and agricultural accounts, or through his own
cretail outlets.
Bulk liquid warehousers only store petroleum products at their terminals
for a fee and do not market the product themselves.
1.3
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TABLE I.I
1978 BULK TERMINAL POPULATION
PADD
I '
II
5
I'll
IV
V
Total
Source:
« i i r»i-T*r»/M r-i i»j -rrn
HIT MAI f-
: MLL rt i KUUC.UIYI i tro'imMLo
Number Percent
of of Total Storage
Terminals Total Capacity
745
429
276
39
262
1,751
Bureau
Petrol e
Liquid
Thousand
Barrels
43% 403,633
24% 158,219
16% 126,223
2% 7,238
15% 75,403
100% 770,716
of Census, 1972 Census
urn News, Factbook (197
Terminals and Storage
Percent
of
Total
Number
of
Terminals
- TFRMINAI S
Percent
of
Total
Thousand
Cu. Meters
64,172
25,155
20,068
1,151
11,988
, 52% '
21%
16%
1%
10%
122,534 100%
of Wholesale Trade;
2-1978); Independent
Facilities; Industry
657
343
234
39
238
1,511
U.S. Army Corps
Liquid Terminals
contacts; Arthur
43%
23%
15%
3%
16%
100%
of Engineers
Association
D. Little,
STORING GASOLINE
Gasoline Storage
Capacity
Thousand Thousand
Barrels Cu. Meters
149,792 23,815
62,115 9,875
51,753 8,228
4,240 674
28,408 4,517
296,308 47,109
, Port Series; National
, 1978 Directory - Bulk
Inc.
Percent
of
Total
51%
21%
17%
1%
10%
100%
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TABLE 1.2
Total Storage
Capacity
Thousand Thousand
Barrels Cu. Meters
< 200 < 30
200-600 30-95
600-1,000 95-160
> 1,000 >160
GASOLINE TERMINAL DISTRIBUTION
BY SIZE AND OWNERSHIP
PERCENT OF TERMINALS STORING GASOLINE
Majors and Percent Total Number of
Semi-Majors Independents of Total Terminals Storing Gasol ine
30% 21% 50% - 764
25% -3% 28% 423
10% ' 3% 13% 192
7% 2% 9% 132
Percent Total
72%
28%
100%
Total Number of
Gasoline Terminals 1,086
425
1,511
Source: Bureau of Census, 1972 Census of Wholesale Trade; U.S. Army Corps of Engineers, Port Series;
National Petroleum News, Factbook (1972-1978); Independent Liquid Terminals Association, 1978
Directory - Bulk Liquid Terminals and Storage Facilities; Industry contacts; Arthur D. Little, Inc.
-------
storage capacity greater than 200,000 barrels, but only 59% of the
gasoline terminals having less than 200,000 barrels of total storage.
A shift in ownership from majors to independents is expected to
continue, particularly regarding the smaller terminals, as some majors
either reduce their marketing activities or withdraw entirely from
selected regions as part of a market rationalization process.
"Stand alone"economics and the market rationalization of petroleum
companies are expected to continue exerting closure pressure on margin-
ally profitable facilities. Although most closures and consolidations
in the bulk terminal industry have already occurred, approximately 20
small marine terminals, or 3% of the terminals having an average daily
gasoline throughput less than 200,000 gallons, are expected to close
or to consolidate their operations between 1978 and 1983 (Figure I.I).
3. Bulk Plants
In 1978, there were approximately 18,640 petroleum bulk plants in
the U.S. (Table 1.3). This figure represents a decline of 20% from
the 23,370 bulk plants reported by the Department of Commerce in 1972.
Of the total 1978 bulk plant population, 96% or 17,850 bulk plants
store gasoline. Total product storage capacity at bulk plants in
1978 was estimated at 1.8 billion gallons of which 1.1 billion gallons,
or 60%, was gasoline capacity.
Jobbers own the greatest number of gasoline bulk plants with 76%
of the estimated 1978 population (Table 1.4). Majors own approximately
20%, while the independent marketer/wholesalers own less than 5%. The
jobbers' share of the market has been increasing steadily in recent
years as the majors have pulled out of secondary storaae operations
as part of their overall marketing strategy. Jobbers tend to own a
proportionately greater number of small gasoline bulk plants, and pro-
portionately fewer large bulk plants than either the majors or the
independent marketer/wholesalers. Jobbers, who own 76% of all gasoline
bulk plants, own over 82% of the smallest bulk plants having less than
1.6
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2500
2000
1.925
1,750
1,730
1500
1000
500
1972
1978
1983
FIGURE 1.1 ESTIMATED 1983 BULK TERMINAL
POPULATION BEFORE VAPOR
CONTROL IMPACTS
1.7
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TABLE 1.3
1978 BULK PLANT POPULATION
Number of
PADD Bulk
I 3
II 8
» 1
co r
III 3
IV
*
V 1
Total 18
Plants
,510
,850
,320
990
,970
,640
ALL PETROLEUM BULK
Percent
of
Total
19%
47%
18%
5%
11%
100% 1
Total
' PI ANTC
< 1 LMM 1 O
Storage
Capacity
Thousand
Gallons
433,290
710,670
253,380
85,490
302,270
',785,100
Source: Bureau of Census, 1972 Census
Factbook, (
Thousand
Cu. Meters
1,641 ,
2,691
958
323
1,144
6,757
of Wholesal
1972-1978); Industry contacts;
Percent
of
Total
Number
- BULK PLANTS
Percent
of of
STORING G;
icni TMC
\-5ULllNt
Gasol ine Storage
Bulk Plants Total
Capacity
Thousand
24%
40%
14%
5%
17%
100%
e Trade;
Arthur D
3,190
8,540
3,320
990
1,810
17,850
18%
48%
19%
5%
10%
100% 1
National Oil Jobbers Council
. Little, Inc.
Gal
250
401
187
58
164
,062
Ions
,270
,830
,190
,490
,600
,380
; National
Thousand
Cu. Meters
947
1,521
709
221
623
4,021
Petroleum
Percer
of
Tota"
24%
38%
18%
5%
15%
100%
News ,
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TABLE 1.4
GASOLINE BULK
Total Storage
Capacity
Thousand Cubic
Gallons Meters
<40 <150
40-150 150-570
150-300 570-1,140
>300 > 1,140
Percent of Total
Total Number of
Bulk Plants Storing
Gasoline
Source: Bureau of Census
PERCEf
Majors
& Semi-
Majors
2.0
16.2
1.2
0.8
20.2
3,610
, 1972 Cens
PLANT DISTRIBUTION BY SIZE AND OWNERSHIP
IT nc Dill V Dl AMTC CTADTMP PACfM TMF
-------
40,000 gallons of storage capacity, but only 36% of the largest bulk
plants having storage greater than 300,000 gallons. By contrast, the
majors, who own 20% of the gasoline bulk plants, own over 75% of the
largest facilities, but only 18% of the smallest bulk plants.
Additional bulk plant closures are expected because of increasing
market competition and the ongoing rationalization process of petroleum
marketers which will continue to favor larger, more efficient bulk
plant operations. Many bulk plants can no longer operate profitably
because of shrinking margins caused by increasing operating costs.
Based upon industry discussions with majors,independents and jobbers,
an estimated 3,480 gasoline bulk plants are expected to close or be
consolidated over the next 5 years, thereby reducing the bulk plant popu-
lation to about 15,100 (Figure 1.2); A large portion of this decline
results from a more accelerated exodus from the bulk plant industry
on the part of the majors and independents. As much as 42% of the
majors' 1978 bulk plant population will be either sold or closed over
the next 5 years. Most of these facilities are expected to be purchased
by jobbers who will consolidate them with their existing operations.
The jobbers' share of the balk plant population is expected to increase
from 76% to 81% by 1983. The ongoing shift of bulk plant ownership
will continue to be a major consideration within the industry. All
3,480 closures are expected to be bulk plants having less then 8,000
gallons of average daily gasoline throughput.
C. CONTROL STRATEGIES
The EPA is considering three control options which would reduce
the nationwide emission of benzene during normal bulk storage opera-
tions. These options address the following three major sources of
gasoline vapor in the industry:
The loading of truck transports at bulk terminals
(dispatch of product)
The filling of gasoline storage tanks at bulk plants
(receipt of product)
1.10
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25,000
20,000
15,000
10,000
5,000
23,300
18,640
15,100
1972
1978
1983
FIGURE 1.2 ESTIMATED 1983 BULK PLANT
POPULATION BEFORE VAPOR
CONTROL IMPACTS
1.11
-------
The loading of tank wagons at bulk plants
(dispatch of product)
These sources of qasoline vapor are controlled to varying degrees by
the three proposed options outlined below.
1. Option 1
Option 1 provides the least amount of benzene reduction of the
three control options. Under this option, all terminals must install
control systems to collect and dispose of gasoline vapors resulting
from truck transport loading. All truck transports loading at the
terminal would also have to install equipment to receive gasoline
vapors from customers' storage tanks and direct this vapor to the
terminal's vapor control system. These systems may either reliquify
the gasoline vapors, returning the liquid to the storage tanks, or
oxidize the collected vapors. Bulk plants would be required to use
either a top-loading or bottom-loading submerged fill method when
loading their tank wagons. Additionally, vapors displaced from the
storage tanks by the rising gasoline level during tank filling would
no longer be allowed to escape into the air. These vapors would be
captured and "balanced" (or sent) to the truck transport making the
gasoline delivery. Vapors would then accumulate in the emptying tank
compartments of the truck and be returned by the transport to the bulk
terminal for eventual collection and disposal during the transport's
next loading. Accounts serviced by bulk plants would be exempted from
vapor balancing as the tank wagons would not be equipped to handle
those vapors. However, these accounts would be required to install
submerged fill systems for their storage tanks.
2. Option 2
Option 2 is a more effective control strategy than Option 1. Bulk
terminals would be required to employ the same degree of vapor control
under this option as Option 1. However, bulk plants would now be
required to install a balance system on all tank wagons in addition
to the balance system on storage tanks required by Option 1. Tank
1.12
-------
wagons would then be modified in order to receive gasoline vapors while
filling tanks at retail outlets and to transport these vapors back to
the bulk plant. During subsequent tank wagon loading, the gasoline
vapors, which would have escaped through the hatch opening in Option 1,
would now be collected and sent to the emptying storage tank. These
vapors, which are "balanced to storage," will eventually be "balanced
to transport" during the next transport delivery and be returned to
the bulk terminal for ultimate disposal. Bulk plants would still load
their tank wagons using a submerged fill method.
3. Option 3
Option 3 provides the greatest reduction in benzene emissions of
the three control options. Again, the control requirements of bulk
terminals are exactly the same as they were in Option 1 and Option 2.
Bulk plants, however, would now be required to install vapor collec-
tion and disposal systems similar to those required at bulk terminals.
These control systems would be of a smaller scale than those at
terminals, but all vapors would be collected and disposed of on-site.
No vapors would be "balanced to transport" and returned to the bulk
terminal. All retail outlets serviced by bulk plants would be required
to install vapor balance systems. A brief summary of the base case
assumptions and the proposed vapor control regulations is presented
in Table 1.5.
4. Stand-by Systems
It is the intention of the EPA that no gasoline loading be per-
formed at bulk terminals or bulk plants if the continuous and efficient
operation of the vapor control systems cannot be assured. A bulk
storage facility would have three alternatives should its vapor control
system become temporarily inoperative:
switch to a stand-by system,
t utilize a gasoline vapor holder to collect vapors until
the control system is operational, or
0 shut down gasoline loading operations until the control
system is operational.
1.13
-------
TABLE 1.5
VAPOR CONTROL OPTIONS AT GASOLINE BULK STORAGE FACILITIES
SOURCE
BASE CASE
a
CONTROL
b
SCENARIO
OPTION 1
OPTION 2'
OPTION 3l
Termi nals
Filling Truck Transports
At The Loading Rack
Top
Submerged
Fill
Vapor
Recovery or
Incineration
Vapor
Recovery or
Incineration
Vapor
Recovery or
Incineration
Balance
to Transport
Submerged
Fill
Balance
to Transport
Balance
to Storage
Vapor
Recovery or
Incineration
Vapor
Recovery or
Incineration
Bulk Plants
Filling Gasoline
Storage Tanks Bottom Fill
Filling Tank Wagons
At The Loading Rack Splash Fill
aMost common current.industry practice.
bVapors from all gasoline stations supplied from terminals will be balanced to the truck transport.
Vapors from gasoline stations supplied from bulk plants will not be balanced to the tank wagons.
cVapors from all gasoline stations will be balanced to the supplying vehicles. Service station
tanks will be loaded via submerged fill.
Source: U.S. Environmental Protection Agency
-------
The EPA has provided Arthur D. Little with cost data for the first two
alternatives shown above. Based on estimated capital requirements, a
stand-by system was selected as the less expensive alternative that
would assure that gasoline vapors were continuously controlled. Be-
cause both the decision to shut down gasoline loading operations and
the costs incurred from such a decision would vary considerably from
one installation to another, evaluating this alternative was considered
to be outside the scope of this study. It may, however, be a viable
alternative for some facilities having very small gasoline throughputs.
5. Model Vapor Control Systems
The EPA has developed and provided to Arthur D. Little cost esti-
mates for model vapor control systems which would bring bulk terminals
and bulk plants into compliance with the above control options. One
set of costs was prepared for the various control systems which could
be installed at bulk terminals. However, for bulk plants, three sets
of costs for the possible control systems were prepared for each of the
three options. Since it was outside the scope of this study to select
a "most appropriate" set of vapor control costs for bulk plants, we
evaluated the economic impacts of each of these three cost scenarios.
The three cost scenarios in descending order of installed capital
123
costs are NOJC , Houston-Galveston , and Colorado APCD . The EPA
has assumed that all of the above systems are equally efficient in con-
trolling gasoline vapors for each one of the three control options.
Since it may also be necessary for bulk terminals and bulk plants in-
stalling vapor recovery systems to also install a stand-by unit, the
costs of primary control systems with an appropriate back-up unit were
NOJC - the most expensive control system described by McCormack and
Schuster of the California Independent Oil Marketers Association
(National Oil Jobbers Council, a jobber trade association).
2
Houston-Galveston - a top loading version of the Wiggins System.
Colorado APCD - the least expensive control system reported by the
Colorado Air Pollution Control Division (APCD).
1.15
-------
also provided.
D. CLOSURE ANALYSIS
1. Bulk Storage Models
Because it would be impossible to assess the economic impacts of
each of the proposed vapor control options for the bulk storage indus-
try on an individual basis, Arthur D. Little has developed six bulk
storage models, each representative of segments of the bulk storage
industry, to be used as illustrative analytical tools. By using these
bulk storage models in conjunction with the model vapor control systems
developed by the EPA, economic and financial parameters, e.g. profit-
ability, debt capacity, and tariff rates, were tested under base case
conditions and then for each of the proposed regulations. The
changes in these variables provided valuable insight in conducting
the economic impact analysis by indicating how and to what degree the
bulk storage industry might actually be affected by the vapor control
options.
2. Cost Pass Through Assumptions
Although 100% of the costs associated with vapor control may be
passed through to buyers, we have assumed that the incremental costs
of vapor control may be absorbed by the bulk storage models to vary-
ing degrees. The price setter or market leader of each type of
storage facility in an area was assumed to be the most efficient
facility and, presumably, the largest. This facility, because of
its unique market position, will be able to pass through the full
cost of vapor control by increasing its tariff to where it covers all of
its incremental vapor control costs and hence, does not experience any
decline in margin. A less efficient facility, however, competing with
the market leader, will be constrained to only passing through, at most,
the same unit cost as the market leader, thereby absorbing some of the
cost and causing a decrease in margin. Only the small marine terminal
and small bulk plant models are assumed to be constrained in the amount
of vapor control costs they can pass through in the form of tariff
1.16
-------
increases. The cost pass through of these facilities is assumed to be
limited to the same cost per gallon increases as the larger, more
efficient marine terminal and bulk plant models with which these
smaller facilities are assumed to be in competition. All of the
other models are assumed to be able to pass through the full cost
of vapor control. A summary of these pass through assumptions
appears in Table 1.6.
3. Facilities Subject to the Proposed Control Options
Bulk storage facilities which are not subject to this closure
analysis include bulk terminals and bulk plants which would close
anyway due to reasons other than vapor control, non-gasoline terminals
and bulk plants, and facilities which already have installed the
necessary vapor control equipment. All other facilities would be
subject to possible closure as a consequence of the vapor control
strategies outlined earlier.
4. Bulk Storage Closures
Bulk terminals and bulk plants subject to vapor control regula-
tions are assumed to close because of either of the following two
reasons:
Operators are unable to obtain the capital necessary to
install vapor control equipment, or
Storage facilities would operate below a minimum acceptable
level of profitability if vapor control equipment were
installed.
a. Availability of Capital
For this analysis, each bulk storage facility is treated as a
separate profit center in determining its ability to secure the capital
necessary to install vapor control equipment. Because an in-depth
financial examination of each and every facility was impractical as
well as infeasible, the bulk storage models developed by Arthur D.
Little will act as surrogates for the bulk terminal industry. In our
analysis, if the model's anticipated after-tax cash flow, i.e. net
1.17
-------
TABLE 1.6
COMPETITIVE PASS THROUGH ASSUMPTIONS
FACILITY PROTOTYPE
LOW THROUGHPUT
1
HIGH THROUGHPUT'
00
Marine Terminal
Pipeline Terminal
Bulk Plant
Partial Pass Through
Full Pass Through
Partial Pass Through
1
Full Pass Through
Full Pass Through
Full Pass Through
Gasoline throughput is 250,000 gallons/day for bulk terminals and 4,000 gallons/
day for bulk plants.
Gasoline throughput is 500,000 gallons/day for bulk terminals and 20,000 gallons/
day for bulk plants.
-------
profit plus depreciation, covers its total debt obligation, i.e.
principal of pre-vapor control and vapor control related debt, the
necessary capital will most likely be made available.
Because the projected after-tax cash flow of all the bulk terminal
models was sufficient to meet all debt obligations, both pre- and post-
vapor control, it was concluded that no bulk terminal closures were
likely because of an inability to obtain capital. However, depending
upon the control option and the cost scenario chosen in the bulk plant
analysis, post-vapor control cash flow was often not sufficient to
obtain the capital required to install vapor control equipment. Even
after considering non-standard financing almost 9,000 bulk plants, or
48% of the estimated 1978 bulk plant population, would still not be
able to obtain financing for some of the Option 3 control systems. No
bulk plant closures are expected to occur because of Option 1, which
has the smallest capital requirement of the three control options
Table 1.7). Option 2 is expected to cause approximately 1,690 facili-
ties, or 12% of all gasoline bulk plants, to close if the NOJC, or
most expensive, cost scenario is assumed. No closures are expected
for Option 2 for the other two cost scenarios. Because Option 3
compliance requires the greatest amount of capital, it is the option
expected to cause the largest number of bulk plant closures. The
number of likely bulk plant closures as the result of Option 3
ranges from 1,060 for a Colorado APCD incineration unit to 8,990 for
a NOJC refrigeration/incineration system.
b. Insufficient Profitability
Many of the bulk storage facilities having access to adequate
amounts of capital may still close because of vapor control economics.
Those falling to achieve a minimum level of profitability after vapor
control equipment is installed are assumed to close. Facilities will
remain open as long as their operators can meet all current liabilities,
i.e., operating expenses (including salaries) and debt obligations
(principal and interest). Bulk storage facilities would continue to
Interest payments are included in the cash flow figure.
1.19
-------
TABLE 1.7
BULK PLANT CLOSURES BECAUSE OF
INACCESSIBILITY OF CAPITAL
CONTROL STRATEGY
OPTION 1
OPTION 2
OPTION 3 _
Primary System
Primary Control Syste. Refl.ige"rat1on/atcLrat1on/
Balance
Incoming
Trucks Only Outgoing Trucks Refrigeration Incineration Incineration Incineration
ro
o
NOJC Cost Scenario
Houston-Galveston
Cost Scenario
1,690
8,930
8,890
6,080 8,990
4,370 8,960
8,880
8,820
Coloardo APCD
Cost Scenario
8,870
1,060 8,950
8,820
Source: Arthur D. Little, Inc.
-------
operate under these conditions, even if no return on equity investment
was realized, if operators have limited business alternatives for their
equity investment or believe that profitability will increase in the
future as other facilities close.
In order to generate a revenue stream sufficient to continue
operations, i.e. to break even, a minimum product throughput at all
bulk terminals must be sustained. After netting out the revenue con-
tribution of the non-gasoline products, the revenue necessary to meet
the remaining current liabilities must be generated through gasoline
volumes. The gasoline volume necessary for the model facilities to
remain open was then calculated.
Bulk storage facilities unable to pass through the full cost of
vapor control would be forced to absorb the remaining control costs
and their minimum required gasoline volumes would increase as a result.
This increase could cause some facilities, which are now just breaking
even or marginally profitable, to operate at a loss. Using a distri-
bution of storage facilities by gasoline throughput, and the increase
in gasoline throughput necessary to offset the absorbed vapor control
costs, the number of terminals and bulk plants which would now operate
below their gasoline breakeven throughput as a result of vapor control
economics, and presumably close, was calculated.
From the above analysis, between 23 and 51 bulk terminals, or 2%
to 5% of the gasoline terminals subject to vapor control regulations,
are likely to close because they would be operating at less than a
breakeven level. Depending upon the specific control option and cost
scenario, bulk plant closures are expected to range from zero to 1,300.
Closures resulting from Option 1 are estimated to be 130 for the NOJC
and Houston-Galveston cost scenarios and zero for the Colorado APCD
cost scenario (Table 1.8). Closures resulting from Option 2 range from
The throughputs of the non-gasoline products, and hence, their revenue
contribution are assumed to remain the same.
1.21
-------
TABLE 1.8
BULK PLANT CLOSURES BECAUSE OF
INSUFFICIENT PROFITABILITY
OPTION 1
Balance
Incoming
CONTROL STRATEGY
OPTION 2
OPTION 3
Balance In-
Coming* &
Primary Control System
Primary System
With Stand-By
Refrigeration/ Incineration/
Trucks Only Outgoing Trucks Refrigeration Incineration Incineration Incineration
ro
ro
NOJC Cost Scenario
130
530
1,040
900
1,300
800
Houston-Calveston
Cost Scenario
130
240
920
890
1,180
690
Colorado APCD
Cost Scenario
50
840
1,010
1,100
610
Source: Arthur D. Little, Inc.
-------
50 to 530 facilities, while Option 3 compliance is expected to cause
between 600 and 1,300 bulk plants to close. It should be noted, how-
ever, that while bulk plant closures due to insufficient profitability
appear far less significant than closures due to inaccessibility of
capital, this phenomenon is the result of the arbitrary ordering of
the above two analytical steps and not the inherent significance of
either factor. Before conducting the profitability analysis, the
expected capital-related closures were netted out of the potentially impact-
ed population and their gasoline throughput redistributed among the
remaining storage facilities. A summary of the closure impacts on the
bulk storage industry due to the three vapor control options, both
high and low estimates, is presented in Table 1.9.
E. EMPLOYMENT AND COST IMPACTS
a. Employment
The employment impacted or displaced is directly proportional, as
would be expected, to the facility closures caused by vapor control.
Between 300 and 700 workers employed at gasoline bulk terminals and
up to 43,730 workers employed at bulk plants would be displaced by the
vapor control induced closures. A summary of these employment impacts
is presented for the three proposed vapor control options in Table
1.10.
b. Cost
The nationwide cost of installing, financing and operating vapor
control systems varies significantly by control option, control tech-
nology and cost scenario. High and low estimates for each control
option appear in Table I.11. The total costs of compliance under
Option 1 range from $281 million to $719 million. The vapor control
costs required to comply with Option 2 range from $297 million to $1.1
billion, while Option 3 costs vary from $832 million to $1.4 billion.
These costs represent a substantial portion of the petroleum industry's
$1.2 billion 1977 environmental budget for the control of air pollution.
Additionally, in 1977 the major oil companies' total budget for
1.23
-------
TABLE 1.9
Primary Vapor Control
Bulk Terminal
Bulk Plant2
Primary Vapor Control
With a Stand- By Unit
Bulk Terminal3
Bulk Plant2
CLOSURE IMPACT OF THE
Option
High
System
32
130
System
51
130
PROPOSED
1
Low
23
0
46
0
VAPOR CONTROL
- CONTROL STRA
Option
High
32
2,220
51
2,220
OPTIONS
TCPV
1 tUI "
2
Low
23
50
46
50
Option 3
High Low
32 23
9,970 1 ,900
51 46
10,290 9,430
The High and Low estimates result from using the incineration system and the refrigeration system
respectively, as the cost basis.
2
The High estimate results from using the NOJC cost scenario, while the Low estimate results from
using the Colorado APCD cost scenario. The closure impact of the Houston-Galveston cost scenario
falls between these two estimates.
The High and Low estimates result from using the incineration system with incineration stand-by and
the refrigeration system with incineration stand-by, respectively.
-------
TABLE I.10
EMPLOYMENT IMPACT OF THE PROPOSED VAPOR CONTROL OPTIONS
ro
en
Option 1
High Low
rnwTRni ^TRATFRY
l/Ult 1 IIUL J 1 (VA 1 C. U I
Option 2
High Low
Option 3
High Low
Primary Vapor Control System
Bulk Terminal1
Bulk Plant2
Total Employment
Primary Vapor Control System
With a Stand-By Unit
Bulk Terminal3
Bulk Plant2"
Total Employment
450
550
1,000
320
0
320
450
9,440
9,890
320
210
530
710
550
1,260
640
0
640
710
9.440
10,150
640
210
850
450 320
42.370 8.800
42,820 9,120
710 640
43.730 40.080
44,440 40,720
The High and Low estimates result from using the incineration system and the refrigeration system,
respectively, as the cost basis. '
2
The High estimate results from using the NOJC cost scenario, While the Low estimate results from
using the Colorado APCD cost scenario. The employment impact of the Houston-Galveston cost
scenario falls between these two estimates.
The High and Low estimates result from using the incineration system with incineration stand-by
and the refrigeration system with incineration stand-by, respectively.
-------
r\>
TOTAL COS!
TABLE 1. _
OF THE PROPOSED VAPOR CONTROL OPTIONS
1(MilTifon~TWT5"ol
Tarsi
,., _ rnMToni CTr>«-rrr>v
Single Vapor Control System
Bulk Terminal Cost2
Conversion of the Tank
Trailer Fleet
Bulk Plant Cost3
Total Cost
Vapor Control System
With Stand-By Unit
Bulk Terminal Cost4
Conversion of the Tank
Trailer Fleet
Bulk Plant Cost3
Option
High
329.0
101.4
36.9
467.3 ,
580.4
101.4
36.9
1
Low
201.9
101.4
(22. 7)5
280.6
473.2
101.4
(22.7)
uun i [\UL. -Jir\nii-ui
Option 2
High
329.0
101.4
375.5
805.9
580.4
101.4
375.5
Low
201.9
101.4
(6.5)
296.8
473.2
101.4
(6.5)
Option
High
329.0
101.4
651.3
1,081.7
580.4
101.4
747.3
3
Low
201.9
101.4
528.6
831.9
473.2
101.4
465.2
Total Cost
718.7
551.9
1,057.3
568.1
1,429.1 1,039.8
1
Total cost Includes capital charge, financing cost and operating expense less any applicable recovery
credit. All future expenses and credits have been discounted to present value using a discount rate
of 10%.
2
The High and Low estimates result from using the incineration system and the refrigeration system,
respectively, as the cost basis.
3
The High estimate results from using the NOJC cost scenario, while the Low estimate results from
using the Colorado APCD cost scenario. The cost impact of the Houston-Gal veston cost scenario falls
between these two estimates.
4
The High and Low estimates result from using the incineration system with incineration stand-by and
the refrigeration system with incineration stand-by, respectively.
Indicates a net savings because the present value of the recovery credit exceeds the estimated 1978
^apor control expenses.
-------
environmental effluent abatement was estimated to be only $803 million,
of which marketing's share was approximately $120 million.
1.27
-------
II. MARKET AUDIT OF BULK TERMINALS
A. INTRODUCTION
1. Definition and Operational Profile
Although a bulk terminal is significantly larger than a bulk plant,
having a total storage capacity typically in excess of 50,000 barrels,
there is no well-defined and universally-accepted set of physical
characteristics which uniquely defines a bulk terminal. Rather, the
definition of a terminal is more often derived from its function within
the petroleum marketing network. Therefore, within the scope of this
study, we will assert that a bulk terminal operates as a primary
storage facility receiving petroleum products directly from domestic
or offshore refineries for eventual market distribution. Because the
primary economic impacts of the proposed vapor control regulations,
e.g. incremental investment requirements or possible terminal closures,
will only occur at facilities which store and distribute gasoline,
the bulk terminals comprising the gasoline distribution network will
be the principal focus of the following operational profile.
Pipelines, tankers and barges transport U.S. gasoline throughput,
both domestic production and imports, from refinery storage tanks to
bulk terminal storage (Figure II.l). Because pipeline transportation
is significantly less expensive than waterborne shipment (Figure 11.2),
most of the gasoline throughput in the U.S. is handled by pipeline
terminals. However, since most product pipelines in the U.S. are
currently operating at full capacity, the marginal or incremental
barrel of product in many regions moves by water through marine ter-
minals. Additionally, almost all gasoline imports, primarily origina-
ting in the Caribbean, are received at marine terminals for domestic
distribution.
Part of the definition used by the Department of Commerce when con-
ducting its Census of Wholesale Trade.
II.l
-------
FIGURE 11.1
GASOLINE DISTRIBUTION NETWORK
Refinery
I
1
F
Marine
Terminal
t_
Service
Stations
T
Automobiles,
Trucks
o
Storage
Transfer
More Common Path
Less Common Path
Pipeline
Terminal
J
Bulk
Plant
Commercial and
Rural Accounts
T
Automobiles, Trucks,
Farm Machinery
II.2
-------
FIGURE 11.2
GASOLINE TRANSPORTATION COSTS GULF COAST TO NEW YORK
SPOT TANKER RATES VS. COLONIAL PIPELINE
Colonial Pipeline Tariff
JFMAMJJASONDJFMAMJJASONDJFMAMJJASOND
1976 1977 1978
II.3
-------
A typical bulk terminal distributes all of the gasoline which it
receives through its loading racks into truck transports. These
transports usually have tank capacities between 8,000 and 9,500
gallons and deliver gasoline directly to service stations or deliver
to bulk plants for further distribution. Most of the transports
delivering gasoline are owned by common carriers with the bulk terminal
operators owning the majority of the remaining fleet. Shipments of
gasoline from terminals by pipeline, barge or rail car occur infre-
quently and only in areas having unusual logistical constraints or
opportunities.
2. Historical Market Environment
For more than a quarter of a century until about 1970, the
marketing philosophy of the integrated oil companies was to maximize
the flow of petroleum products through their marketing networks.
This philosophy evolved from the fact that the production of both
domestic and foreign crudes contributed the most significant portion
of the total corporate profits of these companies. In order to "draw"
more barrels of crude oil out of the ground, and hence, more profits,
an aggressive construction program of downstream marketing facilities,
including terminals, bulk plants and service stations, was conducted.
The construction and operation of many of these marketing facilities
was justified and supported, not by the individual facility's profit-
ability outlook or performance, but by the upstream profits of crude
production.
The conditions which induced the petroleum companies to over-
build their marketing networks in the 1950's and early 1960's
disappeared by the end of the 1960's. The integrated oil companies
began to view their marketing and/or refining operations as separate
profit centers to be judged on "stand alone" economics. Marketing
activities, including bulk storage operations, could no longer be
subsidized by upstream profits and were now expected to recover all
operating expenses as well as to provide an acceptable return on
II.4
-------
capital. "Stand alone" economics caused gasoline marketers, both
majors and independents, to review their marketing strengths and to
re-evaluate their overall corporate marketing strategies. Many of
the integrated petroleum companies shifted their marketing philosophy
from volume maximization to profit maximization. Investment in new
marketing facilities declined and older, marginal terminals, bulk
plants and service stations were sold, consolidated or closed as
market conditions rendered them uneconomic. Through this "market
rationalization" process, some companies scaled down their marketing
activities or withdrew entirely from selected areas where they had
over-extended their supply or marketing capabilities. The trend of
"market rationalization," which was well underway by the early 1970's,
was accelerated by the market conditions resulting from the OAPEC
Embargo of 1973-1974.
B. AUDIT SUMMARY
This discussion of the bulk terminal industry will focus on five
of its primary characteristics:
Population
Storage Capacity
Size Distribution
t Ownership, and
Employment.
The section on size distribution includes a discussion of both shell
storage capacity and average daily throughput. Also, when appropriate,
regional differences or trends pertinent to an understanding of the
nature of the bulk terminal industry are identified. The information
that comprised the basis of this audit was compiled from government,
industry and trade association reports, field interviews, and in-
house Arthur D. Little sources. The data obtained from the above
sources was then verified and cross-checked to assure a high level of
confidence in the audit results.
II.5
-------
1. Population
In 1978, there were an estimated 1,751 petroleum bulk terminals
in the U.S. (Table II.1). This figure represents a 9% decline from
the 1,925 bulk terminals identified by the Department of Commerce in
2
1972. This attrition has been the result of the rationalization
process of the petroleum marketers largely affecting the less efficient
facilities. Of the 1,751 terminals identified in 1978, approximately
86% or 1,511 store gasoline. Terminals not storing gasoline may
specialize in distillate, residual or bunker fuel sales. Most bulk
terminals are located in PADD's I and II (Figure II.3) which together
account for two-thirds of the bulk terminal population. PADD I has
43% of all petroleum bulk plants and 43% of those storing gasoline,
while PADD II has 24% and 23%, respectively. The large number of bulk
terminals in these two PADD's reflects the regions' lack of refining
self-sufficiency and their reliance on shipments from other PADD's and
from foreign sources in order to meet their total product (Table 11.2)
and gasoline (Table II.3) demand.
2. Storage Capacity
While the total number of terminals declined between 1972 and 1978,
total storage increased by approximately 30% from 593 million barrels
to 771 million barrels as larger terminals expanded via new construc-
tion or consolidated smaller, less efficient facilities into their
operations. Gasoline storage capacity increased to an estimated 296
million barrels of shell capacity or 38% of total product storage.
Because most of the bulk terminal population is located in PADD's I
and II, these two regions account for most of the storage capacity with
73% of total product storage and 72% of the gasoline storage.
This figure does not include crude or LPG terminals which were
^excluded from consideration in this study.
Bureau of Census, 1972 Census of Wholesale Trade.
II.6
-------
TABLE II.I
1978
BULK TERMINAL POPULATION
nil nrrnni CUM -rroMTM/H c
PADD
Number Percent
of of Total Storage
Terminals Total Capacity
Percent
of
Total
Number
of
Terminals
Thousand Thousand
Barrels Cu. Meters
I
II
III
IV
V
Total
Source:
745
429
276
39
262
1,751
Bureau of
Petroleum
Liquid Ter
43% 403,633
24% 158,219
16% 126,223
' 2% 7,238
15% 75,403
100% 770,716
Census, 1972 Census
64,172
25,155
20,068
1,151
11,988
52%
21%
16%
1%
10%
122,534 100%
of Wholesale Trade;
News, Factbook (1972-1978); Independent
-rninals and Storage
Facilities;
Industry
657
343
234
39
238
1,511
U.S. Army Corps
Liquid Terminals
contacts; Arthur
TFPMTNAI ^ ^TflPTMR TACini TMF
1 C.rslTll linLj olUKiliu UrtOULllit
Percent
of Gasoline Storage
Total Capacity
Thousand Thousand
Barrels Cu. Meters
43% 149,792 23,815 .
23% 62,115 9,875
15% 51,753 8,228
3% 4,240 674
16% 28,408 4,517
100% 296,308 47,109
of Engineers, Port Series; National
Association, 1978 Directory - Bulk
D. Little, Inc.
Percent
of
Total
51%
21%
17%
1%
10%
100%
-------
(Includes
Alaska &
Hawaii)
FIGURE 11.3 PETROLEUM ADMINISTRATION FOR DEFENSE DISTRICTS
-------
TABLE 11.2
PADO
I
II
III
IV
V
Total
Includes
Source: U.
1978 REGIONAL PRODUCT SUPPLY/DEMAND BALANCE
(Thousand Barrels/Day)
,., INTFR PADO IHTPMFNT1; ,
Regional Refinery From From From From From
Demand Output PADD I PADD II PADD III PADD IV PADD V Imports
6,498 1,815 -- 66 3,100 -- -- 1,671
5,219 3,950 220 791 42 129
3,942 6,602 -- 126 -- 3 22
547 498 -- 68 -- 14 13
2,621 2,392 - -- 83 71 -- 120
18,827 15,257 . 1,955
stock changes
,S. Department of Energy, Supply, Demand and Stock of All Oils By PAD Districts and Imports
Other
66
347
1,163
67
(28)
1,615
into the
United States, by Country.
-------
TABLE II.3
PAOO
I
II
III
IV
V
Total
Includes
Source: U
1978 REGIONAL GASOLINE SUPPLY/DEMAND BALANCE
(Thousand Barrels/Day)
IMTTD DAnn curnuruTc
Regional Refinery From From From From From
Demand Output PADD I PADD II PADD III PADD IV PADD V Imports
2,521 733 -- 27 1,703 - -. 16Q
2,516 1,962 161- -- 281 17 - 7
1,026 2,529 -- 53 i 3
252 220 -- 43 - 7 i
1,139 989 -- - 47 34 .. 25
7,454 6.473 196
stock changes
.S. Department of Energy, Supply, Demand and Stock of All Oils By PAD Districts and Imports
Other
19
211
471
32
52
785
Into the
-------
3. Size Distribution
a. Storage Capacity
Small facilities comprise the largest portion of the bulk terminal
population. Almost half, 48%, of all product terminals have a total
storage capacity that is less than 200,000 barrels, while approximately
another third, 30%, have a total storage capacity between 200,000 and
600,000 barrels (Table II.4). Similarly, half of the terminals storing
gasoline have total storage capacities that are less than 200,000
barrels and of these, more than a quarter, 28%, are between 200,000 and
600,000 barrels. A more detailed presentation of product and gasoline
capacities appears in Appendix A.
b. Average Daily Throughput
Another measure of a bulk terminal's size is its average daily
throughput of petroleum products, particularly gasoline. Almost two-
thirds, 63%, of all bulk terminals have a daily product throughput that
is less than 680,000 gallons and over a third of these, 36%, are less
than 170,000 gallons (Table II.5). Of the bulk terminals storing
gasoline, three-quarters have an average gasoline throughput that is
less than 400,000 gallons/day of which almost half, 48%, are less than
200,000 gallons/day.
4. Ownership
Major and semi-major oil companies own the majority of the
product bulk terminals and the gasoline terminals with 67% and 72%,
respectively (Table 11.6). Independents, including regional refiners,
2 3
marketer/wholesalers, jobbers and bulk liquid warehousers, own the
remaining 33% and 28%. Majors also own a proportionately greater
Hereafter referred to as simply majors. For a listing of the individual
companies comprising these two groups, see Appendix B.
2
A jobber is a petroleum distributor who purchases refined product from
a refiner or terminal operator for the purpose of reselling to retail
outlets, commercial and agricultural accounts, or through his own
retail outlets.
3
Bulk liquid warehousers only store petroleum products at their terminals
for a fee and do not market the product themselves.
11.11
-------
TABLE II.4
PO
BULK TERMINAL STORAGE DISTRIBUTION
ALL
PETROLEUM TERMINALS
Total Storage
Capacity
Thousand
Barrels
>200
200-600
600-1 ,000
< 1 ,000
Thousand
Cu. Meters
>30
30-95
95-160
<160
Number of
Terminals
834
534
215
168
Percent
of Total
48%
30%
12%
10%
TERMINALS
STORING GASOLINE
Number of
Terminals
764
423
192
132
Percent
of Total
50%
28%
13%
9%
TOTAL
1,751
100%
1,511
100%
Source:
Bureau of Census, 1972 Census of Wholesale Trade; U.S. Army Corps of Engineers, Port Series;
National Petroleum News. Factbook (1972-1978TTTndependent Liquid Terminals Association,
1978 Directory - Bulk Liquid Terminals and Storage Facilities; Industry contacts; Arthur
D. Little, Inc. ~~
-------
TABLE II.5
BULK TERMINAL
. . .,_ A| 1 PFTRDI FIIM TFRMTNfll <\
MLL 1C 1 KULCUrl 1 LKI'llllMLo
Percent
Average Product Number of of
Throughput Terminals Total
Thousand Cubic
Gallons/Day Meters/Day
<170 <640 626 36%
170-670 640-2,540 475 27%
670-1,850 2,540-7,000 375 21%
>1,850 >7,000 275 16%
Total 1,751 100%
THROUGHPUT DISTRIBUTION
TFRMTNfll *t ^TfiPTMr PACOI TMF
1 LKrUINHLo olUKlINu UMoULlINt
Percent
Average Gasoline Number of of
Throughput Terminals Total
Thousand Cubic
Gallons/Day Meters/Day
<200 <750 728 48%
200-400 750-1,510 401 27%
400-600 1,510-2,270 312 21%
>600 >2,270 70 4%
1,511 100%
Source: Bureau of Census, 1972 Census of Wholesale Trade; Industry Contacts; Arthur D. Little, Inc.
-------
TABLE 11.6
Ownership
Segment
Number of
Terminals
1978 BULK TERMINAL OWNERSHIP
ALL
-PETROLEUM TERMINALS
Percent
of Total
TERMINALS
STORING GASOLINE-
Number of
Terminals
Percent
of Total
Majors & Semi-Majors
Independents
Total
1,170
581
1,751
67%
33%
100%
1,086
425
1,511
72%
28%
100%
Source: U.S. Army Corps of Engineers, Port Series; National Petroleum News, Factbook (1972-1978);
Independent Liquid Terminals Association, 1978 Directory - Bulk Liquid Terminals and
Storage Facilities; Industry contacts; Arthur D. Little, Inc.
-------
number of the larger terminals than do the independents. While majors
own approximately 72% of all gasoline terminals, they own over 84% of those
facilities having a total storage capacity greater than 200,000 barrels,
but only 59% of the gasoline terminals having a total storage less than
200,000 barrels (Table II.7). This disparity is expected to grow as
majors shift a larger portion of their operations from smaller to larger
terminals due to the greater efficiencies of the larger facilities.
5. Employment
The number of employees in the bulk terminal industry in 1978 was
approximately 35,700 (Table II.8). This figure represents a decline
of 11% from the 40,220 employees reported in 1972 by the Department of
Commerce. The employment level at gasoline bulk terminals in 1978 was
estimated at 30,830, or 86% of total terminal employment. Employment
levels have fallen over this period because of bulk terminal closures
and consolidations, and because of the industry's trend towards greater
automation as a means of increasing efficiencies and reducing labor
costs. Since most of the bulk terminals are located in PADD's I and
II, these regions account for over three-quarters of the industry's
employment.
C. BULK TERMINAL TRENDS
1. New Construction
Recent gasoline demand forecasts have indicated that only a modest
increase in consumption is likely through 1980 and that a demand down-
turn will occur by the early 1980's and continue through 1990 (Table
II.9). It is, therefore, reasonable to conclude that the construction
of new bulk terminals to handle significant additional quantities of
gasoline throughput will not be necessary, although gasoline storage
at existing facilities in selected growth areas will probably increase.
This conclusion is supported by discussions with industry sources which
indicated that few, if any, new gasoline terminals are expected to be
built in the foreseeable future.
11.15
-------
Total Storage
Capacity
Thousand Thousand
Barrels Cu. Meters
<200 <30
200-600 30-95
600-1,000 95-160
>1,000 >160
Percent Total
Total Number of
Gasoline Terminals
TABLE 11.7
GASOLINE TERMINAL DISTRIBUTION
BY SIZE AND OWNERSHIP
- PERCENT OF TERMINALS STORING GASOLINE -
Majors and
Semi-Majors
30%
25%
10%
7%
72%
1,086
Independents
21%
3%
3%
2%
28%
425
Percent
of Total
50%
28%
13%
9%
100%
Total Number of
Terminals Storing Gasoline
764
423
192
132
1,511
Source: Bureau of Census, 1972 Census of Wholesale Trade; U.S. Army Corps of Engineers, Port Series;
National Petroleum News, Factbook (1972-1978); Independent Liquid Terminals Association, 1978
Directory - Bulk Liquid Terminals and Storage Facilities; Industry contacts; Arthur D. Little, Inc
-------
TABLE II.8
1978 BULK TERMINAL EMPLOYMENT
ALL
DCTDni CUM TCDMTMAI C CTn
PADD
I
II
in
IV
V
Total
Source:
i i_ i i\vji- L-UII i i_i\rn nr\i_o
Percent
Employment of Total
19,280
7,850
4,460
440
3,670
35,700
Bureau of Census, 1972 Census
55%
22%
12%
1%
10%
100%
of Wholesale Trade
Port Series; National Petroleum News, Factbook,
TERMINALS
ir>TMr> r'Kcni TMT
OIUFMI1U UMOULlltL
Percent
Employment of Total
17,000
6,280
3,770
440
3,340
30,830
; U.S. Army
(1972-1978);
56%
20%
12%
1%
11%
100%
Corp of Engineers
Industry contact;
Arthur D. Little, Inc.
-------
TABLE II.9
A COMPARISON OF RECENT FORECASTS OF U.S. GASOLINE CONSUMPTION
(Millions of Barrels/Day)
1980 1985 1990
Study for DOE by Energy and Environmental , ,cn _ .__ e
Analysis (January 1979)1 6'769 6'175 5»673
FIRING (March 1979) 7,561
Shell (July 1978)2 7,050 6,773 . 6,709
Bankers' Trust (October 1978)3
_ Passenger Car Use 5,400 4,900 4,300
r Other Vehicles & Off-Highway (ADL) 2,264 2,368 2.316
00 7,664 7,268 6,616
Sun Petroleum (August 1978) 7,567 7,175 6,784
Arthur D. Little (May 1979)
Low Case 7,384 6,790 6,151
High Case 7,384 6,797 6,464
Excludes off-highway use, but includes all gasoline-powered vehicles.
2
Shell forecast stated in crude oil equivalent. Conversion to barrels of gasoline assumes crude
@ 5.6 MM Btu/Bbl and gasoline @ 5.25 MM Btu/Bbl.
Bankers' Trust projections included only passenger car consumption. Arthur D. Little estimates
for trucks, vessels, and off-highway have been added.
-------
2. Existing Bulk Terminals
"Stand alone" economics and the market rationalization of petroleum
companies are expected to continue exerting closure pressure on margin-
ally profitable facilities. Although most closures and consolidations
in the bulk terminal industry have already occurred, approximately 20
small marine terminals, or 3% of the terminals having an average
daily gasoline throughput less than 200,000 gallons, are expected to
close or to consolidate their operations between 1978 and 1983 (Figure
II.4). The approximate magnitude of these closures, which represents
less than 1% of the bulk terminal population, was also confirmed
through industry discussions.
As marginal bulk terminals close, the average daily gasoline
throughput at other nearby terminals will increase to compensate for
the loss of those facilities. This phenomenon, however, will be more
than offset by the long-term overall decline in gasoline consumption.
A shift in ownership from majors to independents is also expected to
occur as some majors either reduce their marketing activities or with-
draw entirely from selected regions. Throughout the 1978-1983 period,
bulk terminal employment is expected to decline as unprofitable
facilities close. Employment will also decline as more bulk
terminals install automated equipment in order to reduce labor costs
and to increase marketing efficiencies.
11.19
-------
2500
2000
1,925
1,750
1,730
1500
1000
500
1972
1978
1983
FIGURE 11.4 ESTIMATED 1983 BULK TERMINAL
POPULATION BEFORE VAPOR
CONTROL IMPACTS
11.20
-------
III. MARKET AUDIT OF BULK PLANTS
A. "INTRODUCTION
1. Definition and Operational Profile
As in the case of bulk terminals, the definition of petroleum
bulk plants is more often derived from its function within the petro-
leum marketing network than from a well-defined set of physical
characteristics. Therefore, within the scope of this study, we will
define bulk plants as secondary bulk storage facilities which operate
as satellite distribution centers of primary bulk terminals and which
receive petroleum products from terminals by truck transport (Figure
III.l). Some minor regional variations regarding the mode of delivery,
however, do exist. Bulk plants supplied by rail are most common in
the Rocky Mountain states and along the West Coast, pipeline deliveries
occur in parts of the Northwest and Midwest, while barge transportation
occurs along the coasts, particularly around the New York Harbor area.
Since the proposed vapor control regulations will only impact those
facilities storing and distributing gasoline, the following operational
profile will focus on those bulk plants which are a part of the gasoline
distribution network.
Bulk plants typically serve agricultural and commercial accounts
in addition to retail outlets, and therefore, handle a variety of
petroleum products, e.g., gasoline, kerosene, diesel fuel and distillates
Many of the bulk plants in the Northeast, however, tend to specialize
in either gasoline or distillate sales. While most of the U.S. gasoline
throughput moves directly from bulk terminals to service stations and
large end-users by truck transport, bulk plants distribute gasoline
via smaller tank wagons to accounts requiring small and infrequent
deliveries, to customers whose storage capacities are insufficient to
permit transport-sized drops, or to large-end users if the access roads
are impassable to transport traffic. Tank wagons usually have tank
capacities between 2,000 and 4,000 gallons and are owned by the bulk
plant operator. Bulk plant operators, however, may also supply a number
III.l
-------
FIGURE 111.1
GASOLINE DISTRIBUTION NETWORK
Refinery
I
Automobiles,
Trucks
Marine
Terminal
Pipeline
Terminal
it * i
Commercial and
Rural Accounts
o
Storage
Transfer
More Common Path
Less Common Path
Automobiles, Trucks,
Farm Machinery
III.2
-------
of high volume accounts. Deliveries to these customers are made by
truck transports directly from the bulk terminal, thereby bypassing
storage at the bulk plant because of the costs associated with product
handling. Only about 20% of the total U.S. gasoline throughput
actually moves through bulk plant storage. This figure is expected
to decline as increasing volumes of gasoline move directly from bulk
terminals to retail outlets and end-users thus avoiding bulk plant
storage.
2. Historical Market Environment
Bulk plants have experienced the same historical market conditions
as bulk terminals and are subject to the same "stand alone" econo-
mics and rationalization process. A substantial number of bulk plants
have already closed because of their poor profitability, and more
closures are expected. However, some rural and semi-rural bulk plants
will be more secure than their urban counterparts because their opera-
tions, and hence profitability, are partially shielded from competitive
market forces by transportation economics.
B. AUDIT SUMMARY
The following discussion of the bulk plant industry will focus on
five of its primary characteristics:
Population
t Storage Capacity
Size Distribution
0 Ownership, and
Employment
As in the case of the bulk terminal audit, the discussion of size dis-
tribution treats both shell storage capacity and average daily through-
put. Additionally, regional differences or trends are identified
whenever appropriate. Much of the information used in assembling this
audit was obtained from the national and regional offices of the National
III.3
-------
011 Jobbers Council. This data was supplemented and cross-checked
with government and industry reports, field interviews, and in-house
Arthur D. Little information in producing the final audit results.
1. Population
In 1978, there were approximately 18,640 petroleum bulk plants in
the U.S. (Table III.I) representing a 20% decline from the 23,370
bulk plants reported by the Department of Commerce in 1972. These
closures have primarily been the result of adverse market conditions
characterized by shrinking margins. Also, the withdrawal of the
integrated oil companies from bulk plant operations removed the
necessary financial subsidy required by marginal operations. Further-
more, the rationalization process of many gasoline marketers has
resulted in the sale, closing or consolidation of bulk plant operations
in certain areas.
Of the total 1978 bulk plant population, 96% or 17,850 bulk
plants store gasoline. Bulk plants not storing gasoline may specialize
in distillate fuels, lubes or specialty oils and are primarily located
in the Northeast and Midwest (Table III.2). PADD's I and II together
account for two-thirds of all bulk plants and two-thirds of those
storing gasoline. Almost half, 47%, of all bulk plants and half, 48%,
of the gasoline bulk plants are located in PADD II where distribution
logistics and a high concentration of rural accounts warrant secondary
petroleum storage.
2. Storage Capacity
Storage capacity at bulk plants has been declining as an increasinq
number of marginal facilities close. The total storage capacity of all
bulk plants in 1978 was estimated at 1.8 billion gallons with gasoline
storage capacity accounting for 1.1 billion gallons, or 60% of this
A jobber trade association
2
Bureau of Census, 1972 Census of Wholesale Trade
III.4
-------
TABLE III.l
PADD
I
II
III
IV
V
Total
Source:
Number of
Bulk Plants
3,510
8,850
3,320
990
1,970
18,640
Bureau of C<
Factbook, (
ALL PETROLEUM BULK
Percent
of Total
Total Capa
19%
47%
18%
5%
11%
100%
snsus,
1972-19
Thousand
Gallons
433,290
710,670
253,380
85,490
302,270
1,785,100
1972 Census
1978
PLANTS
Storage
city
Thousand
Cu. Meters
1,641
2,691
958
323
1,144
6,757
of Wholesal
78); Industry contacts;
BULK PLANT POPULATION
Percent
of
Total
24%
40%
14%
5%
17%
100%
e Trade;
Arthur D
Rll
DU
Number of
Bulk Plants
3,190
8,540
3,320
990
1,810
LK PLANTS
Percent
of
Total
18%
48%
19%
5%
10%
17,850 100% 1
National Oil Jobbers Council
. Little, Inc.
STORING G/
Gasolir
Caj
Thousand
Gallons
250,270
401 ,830
187,190
58,490
164,600
,062,380
; National
\cni TMIT
AoULiINt
ie Storage
>acity
Thousand
Cu. Meters
947
1,521
709
221
623
4,021
Petroleum
Percent
of
Total
24%
38%
18%
5%
15%
100%
News ,
-------
TABLE 1 1 1. 2
NON-GASOLINE BULK PLANT DISTRIBUTION
BY REGION AND OWNERSHIP
PADD
I
II
III
IV
V
Total
Percent
Majors &
Semi -Majors
200
170
-
-
130
500
of Total 63%
Jobbers
120
140
-
-
30
290
37%
Total
320
310
160
790
100%
Percent
of Total
41%
39%
20%
100%
. Associations; Industry
-------
total. Gasoline storage has been declining not only because of the
number of bulk plant closures, but also because of the increasing amount
.gasoline throughput which is bypassing bulk plant storage and being
delivered directly to service stations and end users. Because most of
the bulk plant population is located in PADD's I and II, almost two-
thirds of the total storage capacity, 64%, and gasoline capacity, 62%,
is located in these two regions with PADD II accounting for 40% and
38%, respectively.
3. Size Distributions
a. Storage Capacity
Because bulk plant economics and operations are based upon a
large number of annual tank turnovers, most facilities tend to be
small. Over 90% of both petroleum and gasoline bulk plants have
total storage capacities less than 150,000 gallons. Of this number,
79% are between 40,000 and 150,000 gallons (Table III.3). A more
detailed presentation of bulk plant storage capacity appears in Appen-
dix A.
b. Average Daily Throughput
Bulk plant operators will avoid storing petroleum products at
bulk plants whenever possible. This will continue to exert downward
pressure on all average product throughputs at bulk plants, aasoline
in particular. Over 80% of all bulk plants have an average daily
product throughput that is less than 8,000 gallons (Table III.4).
Similarly, over 90% of the gasoline bulk plants have an average daily
gasoline throughput less than 8,000 gallons. Most bulk plants have
product or gasoline throughputs that are between 3,000 and 8,000
gallons/day.
4. Ownership
Jobbers own the greatest number of bulk plants with 74% of all
A jobber is a petroleum distributor who purchases product from a refiner
or terminal operator for the purpose of reselling to retail outlets,
commercial accounts or reselling through his own retail outlets.
III.7
-------
TABLE 111.3
BULK PLANT STORAGE DISTRIBUTION
Total Storage
Capacity
Thousand
Gallons
<40
Cubic
Meters
<150
ALL PETROLEUM
BULK PLANTS
Number of Percent
Bulk Plants of Total
2,380
13%
BULK PLANTS
STORING GASOLINE
Number of Percent
Bulk Plants of Total
2,380
13%
CO
40-150
150-570
14,800
79%
14,100
79%
150-300
570-1,140
1,180
6%
1,100
6%
>300
280
2%
260
2%
Total
18,640
100%
17,850
100%
Source: Bureau of Census, 1972 Census of Wholesale Trade; National Oil Jobbers
Council; National Petroleum News, Factbook (1972-1978); Industry
contacts; Arthur D. Little, Inc.
-------
TABLE III.4
fll 1 PFTRni FIIM
_ .___ _ flLL rt.IKULt.Un
Average Product
Throughput
Thousand Cubic
Gallons/Day Meters/Day
<3 <10
3-8 10-30
8-17 30-65
>17 >65
Total
BULK
PHI |/ p| AMTC
DULIv r Lnli 1 J
Number of
Plants
4,400
10,760
2,650
830
18,640
PLANT THROUGHPUT DISTRIBUTION
Percent
of Total
24%
58%
14%
4%
100%
Source: Bureau of Census, 1972 Census of Wholesale
RIM Y PI ANT^ ^TORT
Average Gasoline
Throughput
Thousand Cubic
Gallons/Day Meters/Day
~<3 <10
3-8 10-30
8-17 30-65
>17 >65
Total
Trade; National Oil Jobbers
NG GASOLINE
Number of
Plants
5,210
11,210
1,170
260
17,850
Percent
of Total
29%
63%
1%
1%
100%
Council ; National
Petroleum News, Factbook, (1972-1978); Industry contacts; Arthur D. Little, Inc.
-------
bulk plants and 76% of all gasoline bulk plants (Table III.5). The majors
own almost a quarter, 22%, of all bulk plants and a fifth of the gasoline
bulk plants, while the independent marketers/wholesalers own less than
5% of either type. The jobbers' share of the market has been increasing
steadily in recent years as the majors have pulled out of secondary
storage operations as part of their overall marketing strategy. Jobbers
also tend to own a proportionately greater number of small gasoline
bulk plants, and proportionately fewer large bulk plants than either the
majors or the independent marketers/wholesalers. Jobbers, who own 76%
of all gasoline bulk plants, own over 82% of the smallest bulk plants having
less than 40,000 gallons of storage capacity, but only 36% of the largest
bulk plants having storage greater than 300,000 gallons (Table III.6).
By contrast, the majors, who own 20% of the gasoline bulk plants, own over
75% of the largest facilities, but only 18% of the smallest bulk plants.
5. Employment
Bulk plant employment fell from 105,520 reported by the Department
of Commerce in 1972 to an estimated 75,010 in 1978, a decline of 29%
(Table III.7). The employment level at gasoline bulk plants was
estimated at 72,130 or 96% of the total bulk plant employment. Because
most of the bulk plants are located in PADD's I and II, almost three-
quarters of the employment is also located in these two regions.
C. BULK PLANT TRENDS
1. New Construction
Because gasoline demand is not expected to increase substantially
from present levels and because more gasoline volume will bypass storage
at bulk plants, no new bulk plants or gasoline storage are expected to
be built.
2. Existing Bulk Plants
Additional bulk plant closures are expected because of increasing
market competition and the ongoing rationalization process of petroleum
marketers which will continue to favor the larger, mere efficient bulk
III.10
-------
TABLE III.5
1978 BULK PLANT OWNERSHIP
Ownership Segment
ALL PETROLEUM
BULK PLANTS
Number of Percent
Bulk Plants of Total
BULK PLANTS
STORING GASOLINE
Number of Percent
Bulk Plants of Total
Majors & Semi-Majors
4,110
22%
3,610
20%
Independent Marketers/
Wholesalers
770
4%
770
Jobbers
13,760
74%
13.470
76%
Total
18,640
100%
17,850
100%
Source: National Oil Jobbers Council; National Petroleum News, Factbook (1972-1978);
Industry contacts; Arthur D. Little, Inc.
-------
TABLE III.6
INJ
GASOLINE
BULK PLANT DISTRIBUTION BY SIZE AND OWNERSHIP
ncnrcwT nc DIII v DI AMTC CTODIMP rncni TMC
Total Storage
Capacity
Thousand Cubic
Gallons Meters
<40 <150
40-150 150-570
150-300 570-1,140
>300 >1,140
Percent of Total
Total Number of
Bulk Plants Storing
Gasoline
Source: Bureau of Census
r L.lvVsL.11 I \J\ uui-is i unit i o UIUIMMU unjuL. xiii-
MajOrS Independent Total Number
& Semi- Marketers/ Percent of Bulk Plants
Majors Wholesalers Jobbers of Total Storing Gasoline
2.0
16.2
1.2
0.8
20.2
3,610
, 1972
0.4 11.0 13.4 2,380
3.5 59.3 79.0 14,100
0.3 4.7 6.2 1,110
0.1 0.5 1.4 260
4.3 75.5 100.0
770 13,470 17,850
Census of Wholesale Trade; National Oil Jobbers Council; Natioi
Petroleum News, Factbook (1972-1978); Industry contacts; Arthur D. Little, Inc.
-------
TABLE III.7
CO
1978 BULK PLANT EMPLOYMENT
PADD
I
II
III
-IV
V
Total
Source:
ALL PETROLEUM
Rill K PI ANT*;
Percent
Empl oyment of Total
24,210 32%
31 ,220 42%
9,780 13%
3,520 5%
6,280 8%
75,010 100%
Bureau of Census, 1972 Census of Wholesale
Council; National Petroleum News, Factbook
BULK
fTnpTwr
;> 1 UK1JNI
Employment
22,850
30,180
9,780
3,520
5,800
72,130
Trade; National
PLANTS
> pAcni TMC
i bAoULlINt
Percent
of Total
32%
42%
13%
5%
8%
100%
Oil Jobbers
(1972-1978); Industry contact
Arthur D. Little, Inc.
-------
plant operations. Based upon industry discussions with majors, indepen-
dents and jobbers, an estimated 3,480 gasoline bulk plants are expected
to close or be consolidated over the next 5 years, thereby reducing the
bulk plant population to about 15,100 (Figure III.2). This decrease
represents an average annual reduction in the bulk plant population of
4.2%, which is greater than the 1972-1978 average rate of decline of 3.7%.
The increase in the rate of closures results from a more accelerated
exodus from the bulk plant industry on the part of the majors and inde-
pendents. The average annual decline in existing jobber operations was
assumed to be only 2.5% in the above calculation. All 3,480 closures are
expected to be bulk plants having less than 8,000 gallons of average
daily gasoline throughput.
The ongoing shift of bulk plant ownership will continue to be a
major consideration within the industry. Major oil companies are expected
to continue to withdraw from bulk plant operations in most markets by
attempting to sell their facilities. Between 1978 and 1983, 1,540 bulk
plants are expected to be offered for sale by the majors with most of
these facilities, i.e. 75%, being purchased by jobbers who will consoli-
date them with their existing operations (Table III.8). Some attrition,
i.e. 25%, however, is expected to result from this ownership transfer
as market conditions preclude total absorption of these facilities by
the jobber network.
As bulk plants close, their gasoline throughput will be redistributed
among other facilities. By 1983, the average annual gasoline throughput
of the remaining bulk terminal population could increase by as much as
1,000 gallons/day. However, the actual incremental throughput will
most likely be less than this figure for the following three reasons.
First, overall gasoline demand is expected to decline from its current
levels. Second, an increasing portion of bulk plants' gasoline sales
will be delivered directly from the bulk terminal, thereby bypassing
actual storage at the bulk plant. Third, the expanding marketinq sphere
III.14
-------
25,000
23,300
20,000
18,640
15,000
15,100
10,000
5,000
1972
1978
1983
FIGURE 111.2 ESTIMATED 1983 BULK PLANT
POPULATION BEFORE VAPOR
CONTROL IMPACTS
ITT
-------
TABLE 111.8
MARKET RATIONALIZATION OF
GASOLINE BULK PLANTS, 1978-1983
Majors
& Semi-
Majors
Independent
Marketers/
Wholesalers
Jobbers
Total
1978 Bulk Plant
Population
3,610
770
13,470 17,850
Ownership Transfer
(1,150)
1,150
Closures Due To Market
Rationalization
( 390)
(170)
(2,920) (3,480)
1983 Bulk Plant
Population (Pre-Vapor
Control)
2,070
600
11,700 14,370
Percent Decline
1978-1983
42.7%
22.1%
13.2%
19.5%
Source: Bureau of Census, 1972 Census of Wholesale Trade; National Oil Jobbers
Council; National Petroleum News, Factbook, (1972-1978); Industry contacts;
Arthur D. Little, Inc.
-------
of bulk terminals will increase the competition between terminals and
bulk plants and, through greater efficiencies and economies of scale,
capture a portion of the bulk plants' existing gasoline throughput.
III.17
-------
IV. VAPOR CONTROL STRATEGIES AND SYSTEM COSTS
A. INTRODUCTION
Gasoline vapors containing benzene and other hydrocarbons routinely
escape into the atmosphere during normal bulk storage operations, e.g.,
whenever gasoline storage tanks are filled or delivery vehicles are
loaded. The U.S. Environmental Protection Agency has defined three
control strategies or options which would reduce the amount of benzene
released into the atmosphere by controlling the resulting hydrocarbon
vapors whenever gasoline is moved into or out of bulk storage. The
darkened lines of Figure IV-1 indicate those segments of the gasoline
distribution network addressed in this study by the three vapor control
options. The EPA has requested that Arthur D. Little evaluate the eco-
nomic impact of each option and has provided us with cost data for model
vapor control systems, representing various technologies, which would
comply with the proposed vapor control regulations. A discussion of
each of the control options, as well as the costs of the model vapor
control systems, is presented in this chapter.
B. VAPOR CONTROL OPTIONS
Before discussing the specific options to control gasoline vapor
emissions at bulk storage facilities, it is first necessary to define
an operational base case for the bulk storage industry. Then, each of
the three control options, which will be measured relative to this base
case, will be discussed.
1. Base Case
a. Bulk Terminals
In the base case, bulk terminals, which have not already installed
vapor control systems required by the three control options, are assumed
to load transports using the top-loading, submerged fill method. With
this method, the loading arm of the gasoline rack enters the tank com-
partment and extends to within 6 inches of the bottom of the tank
(Figure IV.2). This method reduces the amount of vapors that might form
IV.1
-------
FIGURE IV.1
GASOLINE DISTRIBUTION NETWORK
Refinery
1
Automobiles,
Trucks
Segnents Addressed
in This Study
Commercial and
Rural Accounts
o
J Storage
Transfer
More Common Path
Less Common Path
Automobiles, Trucks,
Farm Machinery
IV.2
-------
Vapor Emissions
Gasoline
Vapors^
Vapors
* Fill Pipe
Hatch Cover
Gasoline
Product
Tank Truck Compartment
A. Top Splash Loading Method
Vapor Emissions v
Vapor," ./
Product " ^.
^ Gasoline /
^ nil
Ta
Hatch Cover
Tank Truck Compartment
B. Top Submerged Method
Vapor Vent to
Recovery Equipment
or to Atmosphere Hatch Closed
V
Vapors
Product
C. Bottom Loading Method
Tank Truck Compartment
Gasoline
- Fill Pipe
FIGURE IV.2 GASOLINE TANK TRUCK LOADING METHODS
IV.3
-------
within the tank compartment during the loading operation by reducing the
turbulence of the gasoline as it fills the compartment. However, because
the fill pipe entering the tank has a smaller diameter than the opening
of the hatch cover, the space surrounding the fill pipe will still per-
mit gasoline vapors to escape into the atmosphere as the liquid level
rises. No control of these escaping vapors has been assumed in the base
case. Approximately 1,980 metric tons of benzene would be released into
the air annually by the bulk terminal industry if all terminals used
this method of loading (Table IV.I).
b. Bulk Plants
Filling storage tanks accounts for over 30% of the annual benzene
emissions at bulk plants. When a truck transport delivers gasoline to a
bulk plant, gasoline is usually pumped into the storage tank through a
pipe at the bottom of the tank. As the gasoline level in the storage
tank rises, gasoline-saturated vapors are displaced and vented through a
pressure-relief valve on the top of the tank. No control of these
filling losses is assumed in the base case.
Almost 40% of total benzene emissions at bulk plants occurs during
truck loading. In the base case, tank wagons are assumed to be loaded
using the splash fill method. Splash fill, as its name implies, allows
the gasoline to fall from the top of the tank compartment (Figure IV.2).
This method of loading is considerably more turbulent than the submerged
fill method and, hence, allows more gasoline vapors to form and subse-
quently escape. These vapors will be forced through the space between
the hatch opening of the truck and the fill pipe of the loading rack by
the rising gasoline level in the tank compartment. Storage tank filling
and tank wagon loading together account for over 70% of the benzene
emissions originating at bulk plants in the base case.
The remaining 30% of the benzene emissions results from storage
tank emptying and breathing. As the gasoline storage tanks are emptied,
the partial vacuum created within the tank draws in fresh air through
the pressure-relief valve. The fresh air becomes saturated with gasoline
IV.4
-------
TABLE IV.I
BASE CASE EMISSIONS AT BULK STORAGE FACILITIES
Source
Bulk Terminal
- Loading Trucks
(top submerged)
Bulk Plant
-
Tank Breathing
Tank Emptying
Tank Filling
Annual National
Hydrocarbon Benzene Gasoline Benzene
Emissions Emissions Throughput Emissions
(mg/1) (mg/1)
600 4.8
600 4.8
460 3.7
1150 9.2
(1/yr) (metric tons/yr)
413 x 109 1980
792
165 x 109 607
1518
- Truck Loading
(splash fill)
1400
11.2
165 x 10-
1848
Total
6745
Source: U.S. Environmental Protection Agency
-------
vapors and expands, thus forcing a portion of the gasoline-saturated air
back into the atmosphere through the pressure-relief valve. Similarly,
breathing losses occur because temperature changes within the tank,
cause the gasoline vapor to expand and to contract. As the tank is
warmed, the gasoline vapor expands and a portion is vented through the
pressure-relief valve. As the tank cools, the gasoline vapor within
the tank contracts and draws in fresh air, which will eventually become
saturated with gasoline vapors. In addition to ambient temperature,
breathing losses are affected by a number of factors, including the
color and the condition of the storage tanks.
2. Option 1
Option 1 provides the least amount of benzene reduction of the three
control options. This option only reduces the benzene emissions by
about 64% from the base case level. Under this option, all terminals
must install control systems to collect and dispose of gasoline vapors
resulting from truck transport loading. Truck transports delivering
gasoline would also have to be equipped to handle vapor control. These
systems may either capture and reliquify gasoline vapors, returning
the liquid to the storage tanks, or oxidize the collected vapors.
Examples of vapor control systems which reliquify gasoline vapors
include refrigeration (RF), compression-refrigeration-absorption (CRA),
and adsorption-absorption (AA). An incineration system (OX) will oxidize
the collected vapors. All of these technologies are currently in use by
the bulk storage industry, although the refrigeration system is the most
common. These systems are considered to be the most effective vapor
control methods at bulk terminals, capable of reducing benzene emissions
by 95%.
Bulk plants would be required to stop splash loading tank wagons
and to balance storage tanks to incoming truck transports during
storage tank loading. Operators would now have to use either a top-
loading or bottom-loading submerged fill method when loading their tank
wagons (Figure IV.2). Most bulk plants now employing splash fill will
IV.6
-------
most likely switch to the top-loading, submerged fill method because its
conversion costs are significantly less than the conversion costs asso-
ciated with a bottom-loading system. Vapors displaced from the storage
tanks by the rising liquid level during tank filling would no longer be
allowed to escape into the air. These vapors would be captured at the
pressure-relief valve and "balanced" or sent to the truck transport
making the gasoline delivery. Vapors would then accumulate
in the emptying tank compartments of the truck and be returned by the
transport to the bulk terminal for eventual collection and disposal
during the transport's next loading (Figure IV.3). Accounts serviced
by bulk plants would be exempted from vapor balancing as the tank wagons
would not be equipped to handle those vapors. However, retail accounts
would be required to install submerged fill systems for their storage
tanks.
3. Option 2
Option 2 is a more effective control strategy than Option 1, with
a level of benzene emission that is 82% lower than the base case
(Table IV.2). Bulk terminals would be required to employ the same
degree of vapor control under this option as in Option 1, i.e., refrige-
ration, compression-refrigeration-absorption, adsorption-absorption,
oxidation or the equivalent. Benzene emissions from bulk terminals in
this option would also be the same as in Option 1.
Bulk plants would still load their tank wagons using a submerged
fill method. However, they would also be required to install a balance sys-
tem on all tank wagons in addition to the balance system on storage tanks
required by Upfion 1. Tank wagons would then be modified in order to
receive gasoline vapors while filling tanks at retail outlets and to
transport these vapors back to the bulk plant. During subsequent tank
wagon loading, the gasoline vapors, which would have escaped through the
hatch opening in Option 1, will now be collected and sent to the empty-
ing storage tank (Figure IV.4). These vapors, which are "balanced to storage,"
will eventually be "balanced to transport" during the next transport
delivery and be returned to the bulk terminal for ultimate disposal. With
IV.7
-------
BALANCE TO TRANSPORT
Vapor Line
Vapor
Gasoline
Storage
Tank
Truck Transport Unloading
Gasoline Line
FIGURE I V.3 VAPOR BALANCED TO TRUCK TRANSPORT
DURING STORAGE TANK LOADING
IV.8
-------
TABLE IV.2
NATIONAL
Source
Bulk Terminal
- Loading Trucks
Bulk Plants
- Tank Breathing
- Tank Emptying
- Tank Filling
- Truck Loading
Total
BENZENE EMISSIONS
(Metric
Base Case
1980
792
607
1518
1848
6745
UNDER VAPOR
tons/year)
rnMTRr
Option 1
100
792
607
152
792
2443
CONTROL OPTIONS
Option 2
100
792
0
152
185
1229
Option 3
100
792
60
152
185
576
Percent Reduction from
Base Case 64% 82% 91%
Source: U.S. Environmental Protection Agency
-------
BALANCE TO TRANSPORT
-------
a full balance system, bulk plant benzene emissions are reduced by almost
50% over Option 1. This decline occurs not only because gasoline vapor
emissions during tank wagon loading are substantially reduced, but also
because the emptying storage tank is now being filled with gasoline-
saturated vapor instead of fresh air drawn in through the pressure-relief
valve.
4. Option 3
Option 3 provides the greatest reduction in benzene emissions of
the three control options with an annual benzene level 91% below the
base case. Again, the control requirements and the benzene levels at
bulk terminals are exactly the same as they were in Option 1. Bulk plants,
however, would not be required to install vapor collection and disposal
systems similar to those required at bulk terminals, e.g. refrigeration,
compression-refrigeration-absorption, adsorption-absorption, oxidation
or the equivalent. These control systems would be of a smaller scale
than those at terminals, but all vapors would be collected and disposed
of on-site. No vapors would be "balanced to transport" and returned to
the bulk terminal. All retail outlets serviced by bulk plants would be
required to install vapor balance systems. A brief summary of the base
case assumptions and the proposed vapor control regulations is presented
in Table IV.3.
5. Stand-By Systems
It is the intention of the EPA that no gasoline loading be performed
at bulk terminals or bulk plants if the continuous and efficient operation
of the vapor control systems cannot be assured. A bulk storage facility
would have three alternatives should its vapor control system become
temporarily inoperative:
switch to a stand-by system,
t utilize a gasoline vapor holder to collect vapors until
the control system is operational, or
t shut down gasoline loading operations until the control
system is operational.
IV.11
-------
TABLE IV.3
VAPOR CONTROL OPTIONS AT GASOLINE BULK STORAGE FACILITIES
ro
Source
Terminals
Filling Truck Transports
At The Loading Rack
Bulk Plants
Filling Gasoline
Storage Tanks
Filling Tank Wagons
At The Loading Rack
Base Case3
Top
Submerged
Fill
Bottom Fill
Splash Fill
tUNIKUL i
Option lb
Vapor
Recovery or
Incineration
Balance
to Transport
Submerged
Fill
.ctNARIO
Option 2C
Vapor
Recovery or
Incineration
Balance
to Transport
Balance
to Storage
Option 3C
Vapor
Recovery or
Incineration
Vapor
Recovery or
Incineration
Vapor
Recovery or
Incineration
Most common current industry practice.
Vapors from all gasoline stations supplied from terminals will be balanced
T*V*4mr»r\s*u«4- !/_«.*.».._ £._ _ __, -| , , _ . . » "w »* i ** i i w v» w
trom aasonne station*; sunniioH from bulk plants will
CVapors from all gasoline stations will be balanced to the supplying vehicles
station tanks will be loaded via submerged fill. 9 venicles
Source: U.S. Environmental Protection Agency
to the truck
be balanced
Service
^ervice
-------
These alternatives will not significantly affect the vapor balance
systems since they are not as susceptible to mechanical failure as the
collection and disposal systems, e.g., refrigeration, CRA, incineration,
etc.
The EPA has provided Arthur D. Little with cost data for the first
two alternatives shown above. Based on estimated capital requirements,
a stand-by system was selected as the less expensive alternative that
would assure that gasoline vapors were continuously controlled. The
stand-by system selected for use in both terminals and bulk plants was
the incineration system. This stand-by system had the least capital
requirement of any of the technologies evaluated. Because both the
decision to shut down gasoline loading operations and the costs incurred
from such a decision would vary considerably from one installation to
another, evaluating this alternative was considered to be outside the
scope of this study. It may, however, be a viable alternative for some
facilities having very small gasoline throughputs.
C. VAPOR CONTROL SYSTEM COSTS
1. Bulk Terminals
Because the level of vapor control at terminals is the same for each
of the three options discussed in the previous section, the EPA provided
Arthur D. Little with one set of costs for the various primary control
systems currently available to terminal operations. Cost information
was also provided for an incineration stand-by system should such a
system be required. This cost data was prepared for two bulk terminal
models: 250,000 gallons/day and 500,000 gallons/day of gasoline
throughput.
Representative costs of primary control systems, i.e., no stand-by
system, are shown in Table IV.4. Installed capital costs range from
$144,000 for an incineration unit in a terminal having 250,000 gallons
of daily gasoline throughput to $328,000 for a CRA unit in a terminal
having 500,000 gallons of throughput. All of the capital costs presented
in this report exclude the cost of monitoring equipment which has been
IV.13
-------
TABLE IV.4
ESTIMATED 1978 CONTROL.COSTS FOR PRIMARY VAPOR CONTROL SYSTEMS AT MODEL TERMINALS
Gasoline Loading Rate:
Vapor Control System;
Installed Capital Cost
Annual Operating Costs
Electricity
Propane (Pilot)
Maintenance
Operating Labor
Carbon Replacement
Taxes, Insurance, G & A
TOTAL OPERATING COSTS
GASOLINE RECOVERY CREDIT
ADSORPTION/
ABSORPTION
240.0
3.9
'
4.8
1.5
2.4
9.6
22.2
*39.2
230,000
COMPRESSION/
REFRIGERATION
ABSORPTION >
256.0
5.1
--
5.1
1.5
--
10.2
21.9
39.2
(Thousand Dollars)
Gal Ions /Day
INCINERATION REFRIGERATION
144.0 204.0
2.9 9.9
1.0
2.9 6.1
1.5 1.5
..
5.8 8.2
14.1 25.7
39.2
ADSORPTION/
ABSORPTION
310.0
7.8
6.2
1.5
4.7
12.4
32.6
78.4
500,000 Gallons/Day
COMPRESSION/
REFRIGERATION
ABSORPTION INCINERATION
328.0 190.0
8.3 5.8
1.0
6.6 3.8
1.5 1.5
..
13.1 7.6
29.5 19.7
78.4
RE FRIGE RAT I
306.0
19.8
--
9.2
1.5
--
12.2
42.7
78.4
Source: U. S. Environmental Protection Agency
-------
estimated at an additional $20,000. Operating costs are least expensive
for the incineration systems and most expensive for the refrigeration
systems. The gasoline recovery credit shown in Table IV.4 and in sub-
sequent tables is the value to the terminal or bulk plant operator of
the recovered gasoline volumes that would have otherwise been lost into
the atmosphere. These credits were calculated by the EPA using $.40 per
gallon times the terminal's annual throughput assuming that 100% of the
available gasoline vapor is collected at the loading rack. All of the
recovery system, i.e., refrigeration, CRA and adsorption-absorption, have
been assumed to be equally efficient and, hence, realize the same recovery
credit. Because the refrigeration and incineration units have the least
capital cost and are the most common control systems in operation today,
they were selected for use in our analysis, I.e., to determine the number
of potential bulk terminal closures and the costs of nationwide compliance.
The costs of an incineration stand-by unit and the costs of combined
primary/stand-by systems, e.g., refrigeration/incineration and incinera-
tion/incineration, are shown in Table IV.5. The total capital cost of
these systems ranges from $239,000 for a 250,000 gallon/day incineration/
incineration system to $436,000 for a 500,000 gallon/day refrigeration/
incineration system. Operating costs of these dual systems are the sum
of the operating expenses of the primary and the stand-by units. The
gasoline recovery credit for the refrigeration/incineration system is
5% less than the recovery credit of the single refrigeration unit
because of losses resulting from system testing and the periodic over-
haul of the combined control unit. Refrigeration and incineration
systems with incineration stand-by were also selected for the closure
and cost analysis. Additional cost data and assumptions used in calcu-
lating the model control system costs are presented in Appendix D.
IV.15
-------
TABLE IV.5
C7>
' . , -- - IIIIWH bwiiiuuL JIJILH HJ PUUCL ItKHlNALb
(Thousand Dollars)
Gasoline Loading Rate:
Installed Capital Cost
Annual Operating Costs
Utility
Maintenance, Labor & Materials
Taxes, Insurance, G & A
250.000 Gallons/Day
STAND-BY REFRIGERATION/
INCINERATION INCINERATION
95.0 299.0
9.9
2.9 10.5
3.8 12.0
INCINERATION/
INCINERATION
239.0
3.9
7.3
9.6
500,000 Gallons/Day
STAND-BY REFRIGERATION/
INCINERATION INCINERATION
126.0 436.0
17.8
3.8 16.2
5.0 17.4
INCINERATION/
INCINERATION
316.0
6.8
9.1
12.6
TOTAL OPERATING COSTS
6.7
32.4
20.8
8.8
51.4
28.5
GASOLINE RECOVERY CREDIT
37.2
74.5
Source: U.S. Environmental Protection Agency
-------
2. Conversion of the Truck Transport Fleet
The cost of modifying the truck transport fleet is not included in
the bulk terminal costs discussed above. These expenses will be incurred
by common carriers and terminal operators who own almost all of the gaso-
line transports. The EPA has estimated that the installed capital cost
of the vapor control equipment for a four-compartment tank trailer to be
$2,100, if retrofitting, and $1,900, if ordering vapor control equipment
on a new trailer (Table IV.6). These costs include co-axial elbows and
hoses, vents and gaskets. Annual maintenance and miscellaneous operating
expenses are estimated to total $350.
3. Bulk Plants
The EPA has compiled control system costs for each of the three control
options discussed above. Vapor control syste:m costs were calculated
for two bulk plant models: 4,000 gallons/day and 20,000 gallons/day
of gasoline throughput. However, for each control option and bulk plant
model, there are three distinct and possible control systems:
NOJC - the most expensive control system described by
McCormack and Schuster of the California Independent
Oil Marketers Association.
Houston-Galveston - a top-loading version of the Wiggins
System.
Colorado APCD - the least expensive control system
reported by the Colorado Air Pollution Control
Division (APCD).
The EPA has assumed that all of the above systems are equally efficient
in controlling gasoline vapors for each one of the three control options.
For the purpose of our analysis, it was assumed that bulk plant
operators would choose a top-loading system in order to comply with the
three vapor control options. The top-loading method was selected
because it is generally a less expensive modification than a conversion
to bottom-loading. Some bulk plants, however, may choose a bottom-
loading system for reasons of efficiency and safety. However, because
National Oil Jobbers Council, a jobber trade association.
IV.17
-------
CO
TABLE IV. 6
ESTIMATED 1978 COST OF VAPOR
CONTROL IN GASOLINE TANK TRAILERS
, - * .
(Thousand Dollars Per Trailer )
Retrof 1 t New
Market Market
Installed Capital Cost 2.10 1.90
Annual Operating Costs
Maintenance & Labor 0.27 0 27
Taxes, Insurance, G & A 0.08 0.08
Assuming four compartments per trailer
Source: U.S. Environmental Protection Agency
Total Operating Costs 0.35 0.35
-------
the bulk plants that might decide upon a bottom-loading system would be
facilities in a stronger financial position relative to the rest of the
industry, their decision to go with a bottom-loading system would not
significantly affect the results of our closure analysis.
The costs of the three control systems, i.e., NOJC, Houston-
Gal veston, and Colorado APCD, for each of the three control options
are presented in Tables IV.7 through IV.12. Estimated capital costs
for Option 1 range from $2,000 to $4,000 (Table IV.7). The capital
requirement necessary to comply with Option 2 regulations is $24,000
for the NOJC system, six times the capital requirement of the Colorado
APCD system to achieve the same level of vapor control (Table IV.8).
Four alternative system configurations are presented for Option 3.
The costs for the primary refrigeration and incineration units are
shown in Tables IV.9 and IV.10, respectively. Because neither of
these includes a stand-by unit, costs were also calculated for a
refrigeration/incineration system and an incineration/incineration
system (Tables IV. 11 and IV.12). Installed capital costs required
to comply with Option 3's vapor regulations range from $30,000 for a
primary unit to over $120,000 for a primary/stand-by system.
IV.19
-------
ro
o
TABLE IV.7
OPTION 1
ESTIMATED 1978 COSTS TO INSTALL A VAPOR BALANCE SYSTEM
AT BULK PLANTS FOR INCOMING TRUCK TRANSPORTS'
Daily Gasoline
Throughput:
Installed Capital Cost
Annual Operating Cost
Labor
Utilities
Maintenance
Taxes, Insurance, G&A
Total Operating Cost
Gasoline Recovery Credit
NOJC
4,000
Gal /Day
4.25
0.13
0.17
0.30
0.51
(Thousand
r
COSTS
20,000
Gal /Day
4.25
0.13
0.17
0.30
2.59
Dollars)
0 S T SC
HOUSTON-GAL
COSTS
4,000
Gal /Day
4.25
0.13
0.17
0.30
0.51
Nfl R T n -
n n 1 U
VESTON
20,000
Gal /Day
4.25
0.13
0.17
0.30
2.59
COLORADO
COSTS
4,000
Gal /Day
1.70
0.05
0.07
0.12
0.51
APCD
20 ,000
Gal /Day
1.70
0.05
0.07
0.12
2.59
1
Assumes top submerged loading of tank wagons at bulk plants,
Source: U.S. Environmental Protection Agency
-------
Daily Gasoline
Throughput:
Installed Capital Cost
Annual Operating Cost
Labor
Utilities
Maintenance
Taxes, Insurance, G&A
Total Operating Cost
Gasoline Recovery Credit
TABLE IV. 8
OPTION 2
ESTIMATED 1978 COSTS TO INSTALL A VAPOR BALANCE SYSTEM
AT BULK PLANTS FOR INCOMING AND OUTGOING TRUCKS!
NOJC
4,000
Gal /Day
23.03
0.69
0.92
1.61
(Thousan
COSTS
20 ,000
Gal /Day
25.73
0.77
1.03
1.80
id Dollars)
COST SCENARIO
HOUSTON-GALVESTON
COSTS
4,000 20,000
Gal /Day Gal /Day
10.70 12.98
0.32 0.39
0.43 0.52
0.75 0.91
I .
COLORADO
COSTS
4,000
Gal /Day
3.84
0.12
0.15
0.27
APCD
20 ,000
Gal /Day
4.88
0.15
0.20
0.35
0.81
4.08
0.81
4.08
0.81
4.08
Assumes top sumberged loading of tank wagons at bulk plants
Source: U.S. Environmental Protection Agency
-------
ro
ro
Daily Gasoline
Throughput:
Installed Capital Cost
Annual Operating Cost
Labor
Utilities
Maintenance
Taxes, Insurance, G&A
Total Operating Cost
Gasoline Recovery Credit
TABLE
IV. 9
OPTION 3
ESTIMATED 1978 COSTS TO INSTALL A SINGLE PRIMARY
VAPOR REFRIGERATION SYSTEM AT BULK PLANTS'!
NOJC
4,000
Gal /Day
92.18
1.43
2.17
3.28
3.69
10.57
(Thousand
COSTS
20,000
Gal /Day
94.88
1.43
2.17
3.36
3.80
10.76
Dollars)
0 S T S C E
HOUSTON -GAL
COSTS
4,000
Gal /Day
79.85
1.43
2.17
2.91
3.19
9.70
N A R I 0 -
VESTON
20 ,000
Gal /Day
82.13
1.43
2.17
2.98
3.29
9.87
COLORADO
COSTS
4,000
Gal /Day
72.99
1.43
2.17
2.71
2.92
9.23
APCD
20,000
Gal /Day
74.03
1.43
2.17
2.74
2.96
9.30
2.19
11.11
2.19
11.11
2.19
11.11
1
Assumes top submerged loading of tank wagons at bulk plants
Source: U.S. Environmental Protection Agency
-------
ro
Daily Gasoline
Throughput:
Installed Capital Cost
Annual Operating Cost
Labor
Utilities
Maintenance
Taxes, Insurance, G&A
Total Operating Cost
r
Gasoline Recovery Credit*
TABLE
IV. 10
OPTION 3
ESTIMATED 1978 COSTS TO INSTALL A PRIMARY,
VAPOR INCINERATION SYSTEM AT BULK PLANTS1
NOJC
4,000
Gal /Day
48.32
1.43
0.16
1.31
1.93
4.83
(Thousand
r
u
COSTS
20,000
Gal /Day
50.99
1.43
0.16
1.39
2.04
5.02
Dollars)
0 S T S C E
HOUSTON-GAL
COSTS
4,000
Gal /Day
35.96
1.43
0.16
0.94
1.44
3.97
N A R I 0 -
VESTON
20,000
Gal /Day
38.24
1.43
0.16
1.01
1.53
4.13
COLORADO
COSTS
4,000
Gal /Day
29.10
1.43
0.16
0.74
1.16
3.49
APCD
20,000
Gal /Day
30.14
1.43
0.16
0.77
1.21
3.57
Assumes top submerged loading of tank wagons at bulk plants
2
No gasoline recovery credit when using an incineration system
Source: U.S. Environmental Protection Agency
-------
ro
Daily Gasoline
Throughput:
Installed Capital Cost
Annual Operating Cost
Labor
Utilities
Maintenance
Taxes, Insurance, G&A
Total Operating Cost
Gasoline Recovery Credit
TABLE
IV. 11
OPTION 3
ESTIMATED 1978 COSTS TO INSTALL A PRIMARY REFRIGERATION
AND A STAND-BY INCINERATION SYSTEM AT BULK PLANTSl
NOJC
4,000
Gal /Day
117.42
1.43
2.17
3.59
"\ 4.70
11.89
(Thousand
.,, r
COSTS
20 ,000
Gal /Day
120.12
1.43
2.17
3.67
4.80
12.07
Dollars)
0 S T
SCENARIO-
HOUSTON-GALVESTON
4,000
Gal /Day
105.09
1.43
2.17
3.22
4.20
11.40
COSTS
20,000
Gal /Day
107.37
1.43
2.17
3.29
4.29
11.18
COLORADO APCD
COSTS
4,000 20,000
Gal /Day Gal /Day
98.23 99.27
1.43 1.43
2.17 2.17
3.02 3.05
3.93 3.97
10.55 10.62
2.08
10.55
2.08
10.55
2.08
10.55
1
Assumes top submerged loading of tank wagons at bulk plants.
The gasoline recovery credit has been adjusted to reflect that no credit will be realized when the
stand-by system is operating.
Source: U.S. Environmental Protection Agency
-------
ro
CJl
TABLE IV. 12
OPTION 3
ESTIMATED 1978 COSTS TO INSTALL A PRIMARY INCINERATION
AND A STAND-BY INCINERATION SYSTEM AT BULK PLANTS1
(Thousand Dollars)
rncr errwnnTft
Daily Gasoline
Throughput:
Installed Capital Cost
Annual Operating Cost
Labor
Utilities
Maintenance
Taxes, Insurance, G&A
Total Operating Cost
Gasoline Recovery Credit
Assumes top submerged loadi
2
NOJC
4,000
Gal /Day
73.55
1.43
0.16
1.62
2.94
COSTS
20,000
Gal /Day
76.25
1.43
0.16
1.70
3.05
6.15 6.34
ng of tank wagons at
\*> u o i .ji>L.iir\r\iu
HOUSTON-GALVESTON
COSTS
4,000
Gal /Day
61.22
1.43
0.16
1.25
2.45
5.29
bulk plants.
20,000
Gal /Day
63.50
1.43
0.16
1.32
2.54
5.45
COLORADO
COSTS
4,000
Gal /Day
54.36
1.43
0.16
1.05
2.17
4.81
APCD
20,000
Gal /Day
55.40
1.43
0.16
1.08
2.22
4.89
Source: U.S. Environmental Protection Agency
-------
V. BULK STORAGE MODELS
A. INTRODUCTION
Because it would be impossible to assess the economic impacts of
each of the proposed vapor control options for the bulk storage industry
on an individual basis, Arthur D. Little has developed six bulk storage
models to be used as illustrative analytical tools. The six bulk
storage model are: large and small marine terminal, large and small
pipeline terminal, and large and small bulk plant. Bulk terminals
were distinguished according to mode of gasoline receipt because the
financial and operational profiles of marine and pipeline terminals
having identical gasoline throughput would be substantially different.
No differentiation regarding the mode of gasoline receipt was made in
the case of the bulk plant models where both were assumed to receive
product from bulk terminals by truck transport. The sizing of the
bulk storage models is based on average daily gasoline throughput and
corresponds exactly with the throughput parameters of the model vapor
control systems supplied by the EPA, i.e. 500,000 gallons/day for the
large marine and pipeline terminals, 20,000 gallons/day for the large
bulk plant, 250,000 gallons/day for the small marine and pipeline
terminals, and 4,000 gallons/day for the small bulk plant. By using
the bulk storage models in conjunction with the model vapor control
systems, economic and financial parameters, e.g. profitability, debt
capacity, and tariff rates, were tested under base case conditions
and then for each of the proposed regulations. The changes in these
variables provided valuable insight in conducting the economic impact
analysis indicating how and to what degree the bulk storage industry
might actually be affected by the vapor control options. In this
chapter, the bulk storage models and the cost pass through assumptions
applying to each are discussed. The model of the large marine terminal
is presented below only as an example of the type of data which com-
prises each of the models. A complete presentation of all six bulk
storage models appears in Appendix C.
V.I
-------
B. BULK STORAGE MODELS
Beginning with one of the specific daily gasoline throughputs
discussed above, other pertinent operational and facility parameters,
e.g. non-gasoline throughput, storage capacity and physical plant,
were calculated for each of the bulk storage models (Table V.I).
These and subsequent model calculations were made using industry
information and in-house Arthur D. Little knowledge.
Gross and net investment profiles were developed for the terminal
and bulk plant models assuming that terminals and bulk plants were
built 10 and 25 years ago, respectively. The investment profiles
only include bulk storage operations; ancillary marketing operations,
e.g. service stations, and inventory allocated to class of trade profit
centers were excluded. The net investment or book value of these
facilities was calculated by adjusting the original gross investment
to take into account depreciation and equipment replacement (Table V.2).
The current net investment of the six bulk storage models is shown in
Table V.3. The gross replacement cost, i.e., capital required to build
new storage facilities, is not presented since very few new terminals
or bulk plants ^re expected to be built in the near future.
Operating expenses include labor costs, maintenance and repair,
utilities, taxes and insurance (Table V.4). As would be expected,
total unit operating expenses, i.e. dollars/gallon, of the larger
terminal and bulk plant models are less than those of the smaller
models because of their economies of scale (Table V.5). Labor is the
largest component of total operating expense in all models, but its
unit cost, or percent of total operating costs, is less in the larger
models. The number of supervisors and workers at each bulk storage
facility was based on the average number of employees at actual facili-
ties having similar operating characteristics.
The target tariffs of the bulk plant models were assumed to be
the same for all products. In reality, each product delivered to a
V.2
-------
TABLE V.I
LARGE MARINE TERMINAL PROTOTYPE
OPERATIONS
Storage
(Thousand Barrels)
Annual Tank Turnovers
Annual Throughput
(Million Gallons).
Daily Throughput
(Thousand Gallons)
Gasoline
PRODUCT GROUP
Distillate
Total
217
20
182.5
500
424
9
160.2
439
641
13
342.7
939
FACILITIES
No. of Tanks - 10
Land (Acres) - 25
No. of Employees - 21
Method of Receipt - Marine Tanker (35,000 DWT)
Source: Arthur D. Little, Inc.
V.3
-------
TABLE V.2
ESTIMATED INVESTMENT PROFILE OF
LARGE MARINE TERMINAL PROTOTYPE
(Thousand Dollars)
INVESTMENT
A.
GROSS NET ,
INVESTMENT INVESTMENT1
NET COST
Depreciable Fixed Assets
Tanks
Building
Dock
Meters, Piping, Pumps
Loading Racks, etc.
Miscellaneous Equipment
Total Depreciable Assets
B. Other Fixed Assets
Land
Engineering
Capitalized Interest
2
C. Working Capital
TOTAL INVESTMENT
1,921.5
35.0
650.0
200.0
1,000.0
365.0
960.8
17.0
100.0
175.0
940.0
183.6
4,171.5 2,376.4
760.0
350.0
400.0
1,510.0
40.0
3,926.4
($/Shell Barrel)
1.50
3.71
2.36
.06
6.13
1
Book value of 10 year old facility.
"Excluding inventory allocated to class of trade sales profit centers.
Source: Arthur D. Little, Inc.
V.4
-------
TABLE V.3
ESTIMATED 1978
NET INVESTMENT OF BULK STORAGE PROTOTYPES
(Thousand Dollars)
STORAGE FACILITY LOW THROUGHPUT1 HIGH THROUGHPUT2
Marine Terminal 1,952 3,926
Pipeline Terminal 990 2.473
Bulk Plant 57 143
^aily gasoline throughput is 250,000 gallons for terminals and 4,000
gallons for bulk plants.
2Daily gasoline throughput is 500,000 gallons for terminals and 20,000
gallons for bulk plants.
Source: Appendix C
V.5
-------
TABLE V.4
ESTIMATED 1978 OPERATING EXPENSES OF
LARGE MARINE TERMINAL PROTOTYPE
(Thousand Dol
Labor
a)
b)
c)
d)
e)
Straight Time
15 men X 52 X $320/wk
($8.00/hr)
3 Supervisors
Plant Manager
Plant Secretary/Clerk
Straight Time (S&W)
Overtime
15 men X 47 X $48/wk
(4 hr & $12.00/hr)
Benefits (25% of a)
PICA (6.13% of a+b)
Employee expenses
Total Labor Expense
1. Total Labor Expense
2. Miscellaneous Services
3. Maintenance & Repairs
4. Utilities & Misc.
Operating Expenses
5. Local Taxes
6. Insurance/Misc. Fixed Costs
lars)
Annual
Expense
249.6
75.0
35.0
27.0
386.6
33.8
96.7
23.2
17.6
557.9
557.9
11.2
28.1
65.0
150.0
175.0
$/Annual Percent of
Throughput Total
Gallon Expenses
.00163 56%
.00003 1%
.00008 37.
.00019 7%
.00044 1 5%
.00051 18%
Total Expenses
987.2
.00288
100%
Source: Arthur D. Little, Inc.
V.6
-------
Storage Facility
Marine Terminal
Pipeline Terminal
Bulk Plant
TABLE V.5
ESTIMATED 1978 OPERATING EXPENSE
OF BULK STORAGE PROTOTYPES
Low Throughput
Thousand
Dollars
502.9
423.5
54.9
Dollars Per
Annual Through-
put Gallon
.00394
.00305
.02670
Percent
Labor
' en
59%
71%
2
High Throughput
Thousand
Dollars
987.2
732.3
162.5
Dollars Per
Annual Through-
put Gallon
.00288
.00243
.01486
Percent
Labor
57%
48%
48%
Daily gasoline throughput is 250,000 gallons for terminals and 4,000 gallons for bulk plants.
Daily gasoline throughput is 500,000 gallons for terminals and 20,000 gallons for bulk plants-
Source: Appendix C
-------
different class of trade would have its own tariff rate. However, a
facility-wide tariff can be assumed for our analysis without loss of
generality. Bulk storage models were treated as individual profit
centers and the tariffs were calculated so as to cover all operating
expenses and to return 20% before federal income tax (BFIT) on a
discounted cash flow (DCF) basis over a 20-year investment horizon
(Table V.6). The target tariffs for each of the bulk storage models
appear in Table V.7.
C. COST PASS THROUGH ASSUMPTIONS
Although 100% of the costs associated with vapor control may be
passed through to buyers, we have assumed that the incremental costs
of vapor control may be absorbed by the bulk storage models to vary-
ing degrees. The price setter or market leader of each type of
storage facility in an area was assumed to be the most efficient
facility and, presumably, the largest. This facility, because of
its unique market position, will be able to pass through the full
cost of vapor control by increasing its tariff to where it covers all of
its incremental vapor control costs and hence, does not experience any
decline in margin. A less efficient facility,-however, competing with
the market leader, will be constrained to only passing through, at
most, the same unit cost as the market leader. This "competitive"
pass through maintains the same tariff differential between the two
facilities after vapor control costs are considered as before (Table
V.8). An attempt by the less efficient model to pass through a
greater portion of the vapor control costs would further weaken its
competitive position relative to the market leader. By not passing
through the full cost of vapor control, the less efficient facility
will have to absorb some of the cost, thereby causing a decrease in
margin, and hence, profitability.
Because pipelines are the most attractive method of transporting petro-
leum products and because most are currently operating at full capacity,
we have assumed for our analysis that both the small and large pipeline
V.8
-------
TABLE V.6
REQUIRED 1978 TARIFF (PRE-VAPOR CONTROL)
OF LARGE MARINE TERMINAL PROTOTYPE
Total Investment
X Annual Capital Recovery Factor
(20% BFIT, 20 Years)
Net Investment
(Thousand Dollars)
3926.4
.2054
806.5
Operating Expenses
Capital Recovery
Total
Annual Cost Required Tariff
(Thousand Dollars) (Dollars Per Annual
Throughput Gallon)
987.2
806.5
1,793.7
.00288
.00235
.00523
Source: Arthur D. Little, Inc.
V.9
-------
TABLE V.7
REQUIRED TARIFF OF BULK STORAGE PROTOTYPES
TO COVER ESTIMATED 1978 COSTS
(Dollars/Gallon)
Storage Facility
Marine Terminal
Pipeline Terminal
Bulk Plant
Low Throughput
.00708
.00451
.03238
1
High Throughput
.00523
.00412
.01754
1
Daily gasoline throughput is 250,000 gallons for terminals and
4,000 gallons for bulk plants.
"Daily gasoline throughput is 500,000 gallons for terminals and
20,000 gallons for bulk plants.
Source: Appendix C
V.10
-------
TABLE V.8
EXAMPLE OF COMPETITIVE ECONOMICS
OF TWO BULK STORAGE FACILITIES
(Dollars/Gallon)
Most Efficient Less Efficient
Facility Facility
Pre-Vapor Control Tariff .0050 .0080
Tariff Differential .0030
Vapor Control Cost .0010 .0020
Cost Pass Through .0010 .0010
Post-Vapor Control Tariff .0060 .0090
Tariff Differential .0030
Absorbed Vapor Control Cost .0010
V.ll
-------
terminal models will pass through the full cost of vapor control. In
the case of marine terminals, which usually handle the marginal
barrel of product, full cost pass through is only permitted for the
larger model. The small marine terminal model will only pass through
the same unit cost as the larger facility in order to maintain the
same competitive position. Similarly, the large bulk plant model is
permitted to pass through the full cost of vapor control while the
small bulk plant model cannot. However, we estimate that 30% of the
small bulk plant population, because they operate in areas partially
shielded from external competitive forces by transportation economics,
would in reality be able to pass through all costs associated with
vapor control. This estimate is based on our discussions with the
petroleum industry, particularly with regional jobber and petroleum
marketer associations. Although the actual percentage varies geo-
graphically between 20% and 50%, the nationwide average is believed
to be roughly 30%.
V.12
-------
VI. BULK TERMINAL IMPACTS
-A. INTRODUCTION
The purpose of this chapter is to identify all bulk terminals
that are subject to the proposed vapor control regulations and to
estimate the economic impacts of those regulations on the bulk ter-
minal industry. These economic impacts are expressed as the number
of potential bulk terminal closures expected to occur because of the
various vapor control options, the employment displaced by these
closures, and the nationwide cost of installing, financing and
operating vapor control equipment at all remaining facilities. No
attempt, however, has been made to express the costs of bulk terminal
closures and the displaced work force in monetary terms. Also, the
nationwide cost of installing vapor control equipment in the gasoline
truck transport fleet, which was calculated separately from the bulk
terminal impacts, is presented in this chapter.
B. BULK TERMINAL POPULATION SUBJECT TO VAPOR CONTROL
Not all of the terminals identified by the market audit are
subject to the vapor control options discussed in Chapter IV. The
exceptions include those gasoline terminals which are expected to
close within the next five years because of competitive economics and
market rationalization, terminals not handling gasoline, and terminals
already in compliance with the proposed options. From our discussions
with the bulk terminal industry, an estimated 20 gasoline terminals,
or 3% of the smallest marine terminals, are expected to close by 1983
because of reasons other than vapor control. While the mandatory
installation of vapor control equipment may accelerate the decision
to close these facilities, their closure cannot be attributed solely
to the imposition of vapor control economics» and therefore, are
excluded from the following closure analysis. Similarly, the 240
bulk terminals identified by the market audit as having no gasoline
throughput are not included in the closure analysis as they would
not be subject to the vapor control regulations (Table VI.l).
VI.1
-------
TABLE VI.l
PETROLEUM
PADD
I
II
III
IV
V
Total
BULK TERMINALS HAVING NO
NUMBER OF
TERMINALS
88
86
42
24
240
GASOLINE THROUGHPUT
PERCENT
OF TOTAL
37%
36%
18%
10%
100%
Source: Arthur D. Little, Inc.
VI.2
-------
Finally, the estimated 360 bulk terminals which have already installed
vapor control systems are not assumed to be subject to the proposed
regulations. However, because the EPA is expected to require the
continuous and efficient operation of all vapor control systems, these
facilities may have to install a stand-by unit, vapor holder, or be
prepared to shut down gasoline loading operations should the primary
control system become inoperative.
After adjusting the 1978 market audit total for the above three
factors, approximately 1,131 bulk terminals, or 65% of the total
terminal population, are subject to the vapor control options presented
in Chapter IV (Table VI.2 and Figure VI.l). A distribution of these
facilities by gasoline throughput indicates that almost half of the
terminals have less than 200,000 gallons/day of gasoline throughput
(Table VI.3). For the following closure analysis, the small bulk
terminal models having "low" throughputs of 250,000 gallons/day act as
surrogates for the bulk terminal population having less than 400,000
gallons/day of gasoline throughput. Similarly, the larger terminal
models having "high" throughputs of 500,000 gallons/day act as surro-
gates for the terminal population having greater than 400,000 gallons/
day of gasoline throughput.
C. CLOSURE ANALYSIS
Bulk terminals subject to vapor control regulations are assumed
to close because of either of the following two reasons:
Terminal operators are unable to obtain the capital
necessary to install vapor control equipment, or
Terminals would operate below a minimum acceptable
level of profitability if vapor control equipment
were installed.
VI.3
-------
TABLE VI.2
PETROLEUM BULK TERMINALS SUBJECT TO
THE PROPOSED VAPOR CONTROL OPTIONS
1978 Bulk Terminal Audit 1,751
Terminal Closures Between 1978
and 1983 Because of Market (20)
Rationalization
Bulk Terminals Having No Gasoline (240)
Throughput
Gasoline Terminals Already Having (360)
Vapor Control Systems _
Total Number of Terminals Subject
to the Proposed Vapor Control 1,131
Options
Source: Arthur D. Little, Inc.
VI.4
-------
CJ1
0)
u
O)
0_
0>
+3
E
3
O
100
80
60
40
20
0
Marine
Terminals
All
-Terminals
Greater
100
200
300
400
500
600 Than 700
Gasoline Throughput
(Thousand Gallons/Day)
FIGURE VI.1 DISTRIBUTION OF BULK TERMINALS
SUBJECT TO VAPOR CONTROL
-------
TABLE VI.3
DISTRIBUTION OF GASOLINE TERMINALS
SUBJECT TO THE PROPOSED VAPOR CONTROL OPTIONS
DAILY GASOLINE
THROUGHPUT
Thousand
Gallons
<200
200 - 400
400 - 600 1 ,
>600
Cubic
Meters
< 760
760 - 1,510
510 - 2,270
>2,270
NUMBER OF
TERMINALS
535
305
238
53
PERCENT
OF TOTAL
47%
27%
21%
5%
Total 1,131 100%
Source: Arthur D. Little, Inc.
VI.6
-------
1. Availability of Capital
While over two-thirds of the bulk terminals are owned by the
major and semi-major oil companies having very good access to capital
markets, for this analysis each bulk terminal is treated as a separate
profit center in determining its ability to secure the capital necessary
to install vapor control equipment. Because an in-depth financial
examination of each and every terminal is impractical and infeasible,
the bulk terminal models presented in Chapter V will act as surrogates
for the bulk terminal industry. The inability of these models to
incur and to service the incremental debt required to comply with the
vapor control regulations was translated into potential closures in
the actual bulk terminal' population. This approach represents "stand
alone" economics without any cross-subsidies and is generally the way
the petroleum companies would view these economics, although there may
be some exceptions.
a. Capital Requirement
The capital required to install any of the various vapor control
systems which are under consideration generally represents less than
15% of the existing net investment at the marine and large pipeline
terminal models (Table VI.4). Vapor control investment is most signi-
ficant, up to 30% of net investment, for the small pipeline model since
its asset base is not as extensive as that of the other terminal models.
However, this model's substantial throughput volumes and the ability to
pass through the entire cost of vapor control counter balance this
apparent weakness.
b. Approach
Since we stated that no cross-subsidy will come from either the
parent corporation or ancillary marketing operations, the terminal
operators have been assumed to seek capital from commercial lenders.
Therefore, within this analysis an attempt is made to simulate
the lending criteria employed by commercial loan officers. A lender
considering an applicant's request for funds is primarily interested
VI.7
-------
TABLE VI.4
o
MARINE TERMINAL
Pre-Vapor Control Net
Plant Investment
Vapor Control Investment
Vapor Control Investment as
a Percent of Pre-Control
Net Investment
PIPELINE TERMINAL
Pre-Vapor Control Net
Plant Investment
Vapor Control Investment
Vapor Control Investment as
a Percent of Pre-Control
Net Investment
ESTIMATED 1978 VAPOR CONTROL CAPITAL REQUIREMENTS OF BULK TERMINALS
(Thousand Dollars)
LOW THROUGHPUT MODEL
Primary Control System
Refrigeration Incineration
1951.6
204.0
10*
989.9
204.0
.21*
1951.6
144.0
7*
989.9
144.0
15%
Primary System With Stand-By
Refrigeration/ Incineration/
Incineration Incineration
1951.6
299.0
15*
989.9
299.0
30%
1951.6
239.0
12*
989.9
239.0
24%
Primary Control System
Refrigeration
3926.4
306.0
8*
2473.1
306.0
Incineration
3926.4
190.0
5*
2473.1
190.0
unrui nuucL
Primary System
Refrigeration/
Incineration
3926.4
432.0
m
2473.1
432.0
With Stand-By
Incineration/
Incineration
3926.4
316.0
8*
2473.1
316.0
12%
17*
13%
Source: Appendix C and EPA cost estimates
-------
in the borrower's ability to repay the full amount of the loan, i.e.
principal as well as interest. If a lender is confident that the loan
can be easily repayed under normal business conditions, the loan will
probably be made. If, however, the prospective borrower is already
so leveraged that repayment would be difficult if an unexpected business
downturn occurred, a lender then would have to rely more heavily upon
subjective factors such as the borrower's past relationship with the
lender, his credit history, the quality of the collateral pledged,
and the future outlook of the borrower's business. Under these circum-
stances, a borrower may in theory have the resources necessary to
repay the debt, but the lender may feel that he would be undertaking
too much risk in making the loan. A decision to extend funds in this case
would widely vary among lenders according to each lender's risk threshold.
Lastly, if it would be difficult for the borrower to repay the lender
even under normal business conditions, there would be no hesitation
on a lender's part to refuse the loan. Many financial tools,
e.g. quick ratio, current ratio and debt-to-equity ratio, could be used
to measure a terminal's ability to incur and service debt. However,
the analytic tool used in this analysis is total term debt as a percent
of after-tax cash flow, or put another way, the ratio of the terminal's
projected after-tax cash flow to its total debt obligation.
In the commercial lending model used for our analysis, as long as
the borrower's anticipated after-tax cash flow, i.e. net profit plus
depreciation, is at least twice as large as his total debt obligation,
i.e. principal of pre-vapor control and vapor control related debt,
it is assumed that the loan will be made (Table VI.5). If, however,
projected cash flow exceeds the total debt obligation, but not by a
factor of 2, then the lender will become more cautious when considering
this loan relative to his overall risk portfolio and downside exposure.
This figure does not include interest payments as they have already
been taken into account when calculating the after-tax cash flow. See
Appendix F for the cash flow worksheets used in this analysis.
VI.9
-------
TABLE VI.5
BORROWING CRITERIA USED IN ANALYSIS
Debt as
a Percent of
After-Tax Cash Flow
Ratio of After-
Tax Cash Flow
to Debt
Lender's
Decision
0 - 50%
Greater than 2:1
Loan is adequately
covered. Loan will
be made.
50 - 100%
2:1 to 1:1
Loan is covered but
lender assumes
increasing risk.
Probability of refusal
increases proportionately
as the debt percentage
increases (Figure VI.2).
Greater than 100%
less than 1:1
Loan is not covered.
Loan will not be made.
Source: Arthur D. Little, Inc.
VI.10
-------
Within this range, the probability that the loan will be rejected is
assumed to be directly proportional to the calculation of term debt
as a percentage of cash flow (Figure VI.2). In reality, however, this
relationship would be non-linear, particularly at the endpoints,
although this simple linear model will suffice for our purposes. Finally,
if the borrower's cash flow cannot fully meet his total debt obligation,
the loan would clearly be rejected as the incremental debt obligation
of the vapor control loan would render the borrower insolvent. This
financial tool is certainly not the only criteria employed in the
commercial lender's calculus when he is evaluating a loan candidate.
As stated above, many other financial tools and subjective factors
will also come to bear on the loan decision. Moreover, the decision
thresholds described above would not always be as clear-cut. However,
this lending model is useful in our analysis because it is reasonable,
straightforward, and easy to apply.
Discussions with independent marketers and terminal operators
indicate that 25-40% of the net plant investment of many terminals is
currently mortgaged. Therefore, debt as a percent of cash flow was
calculated for the bulk terminal models thereby establishing a base
case, by assuming that 30% of the net plant investment was mortgaged
for 20 years at an 8% annual interest rate. In this base case, the
existing debt principal of the bulk terminal models was approximately
11-12% of projected annual after-tax cash flow (Table IV.6). Cash flow,
therefore, covered debt obligations by a ratio of 9:1. This percentage
was again calculated assuming that 100% of the required vapor control
investment was financed for 8 years at a 9% annual interest rate.
After the costs of the model vapor control systems had been folded
into the calculation, the models' total debt obligation was between
16% and 28% of cash flow, still well below the 50% threshold established
by the lending model presented in Table VI.5. These percentages
Terms quoted by a sample of commercial lenders.
VI. 11
-------
100% i-
0%
20% 40% 60% 80%
Debt Repayment Obligation as a Percent
of After-Tax Cash Flow
100%
FIGURE VI.2
AFTER TAX CASH FLOW AS A DETERMINANT
FOR SECURING A COMMERCIAL LOAN FOR
VAPOR CONTROL EQUIPMENT
-------
MARINE TERMINAL
TABLE VI.6
TERM DEBT AS A PERCENT OF AFTER-TAX CASH FLOW AT 8IJLK TERMINALS
LOW THROUGHPUT MODEL
Primary Control System Primary System With Stand-By
i * Refrigeration/ Incineration/
Refrigeration Incineration Incineration Incineration
HIGH THROUGHPUT MODEL
Primary System Kith Stand-By
Refrigeration/ Incineration/
Refrigeration Incineration Incineration Incineration
Primary Control System
Pre-Vapor Control
122
12%
12%
11%
m
n%
m
Post-Vapor Control
19%
17%
22%
20%
17%
15%
19%
17%
PIPELINE TERMINAL
Pre-Vapor Control
Post-Vapor Control
11%
24%
11%
21%
11%
28%
11%
26%
11%
19%
11%
16%
11%
21%
11%
19%
Source: Appendix F
-------
indicate that the models have 3 to 4 times the annual cash flow necessary
to meet both their base case and their vapor control debt obligations.
For bulk terminals with less than 30% of net plant investment mortgaged,
the amount of coverage would be even greater.
c. Closure Summary
From the results of the preceding analysis, it is concluded that
no bulk terminal closures are likely because of an inability to
obtain the necessary capital.
2. Insufficient Profitability
The bulk terminals having access to adequate capital may still
close as the result of the vapor control regulations if, after install-
ing and operating vapor control equipment, they could no longer attain
a minimum acceptable level of profitability. Bulk terminals are
assumed to continue operating as long as they can meet all current
liabilities, i.e. operating expenses (including salaries) and debt
obligations (principal and interest payments). Under this condition,
terminals are assumed to remain open even though they are not earning
any return on equity investment. This is a valid argument if the
terminal operator has limited business alternatives in which to re-
deploy his equity investment, or if he expects business to improve in
the near future.
a. Approach
In order to generate a revenue stream sufficient to continue
operations, i.e. to breakeven, a minimum product throughput at all
bulk terminals must be sustained. After netting out the revenue
contribution of the non-gasoline products, all revenue .necessary to
meet the remaining current liabilities must be generated through
gasoline volumes. The gasoline volume necessary for a terminal to
remain open is referred to here as the "gasoline breakeven throughput."
Bulk terminals that operate below this breakeven volume are assumed
to close, while those that operate above it are assumed to remain open.
VI.14
-------
Vapor control regulations, however, will in effect raise this breakeven
point and require a larger gasoline throughput in order to cover the
incremental operating expenses and debt obligation (Table VI.7). In
this analysis, attention is focused on the number of terminals which
may operate above this breakeven volume in the pre-vapor control case,
but below its new breakeven volume when the economics of vapor control
are considered.
Most terminals are not expected to experience any change in
gasoline breakeven throughput since they will pass through the full
cost of vapor control by way of tariff increases. The additional
revenue resulting from this tariff increase is assumed to exactly
offset all incremental expenses caused by vapor control. Only some
small marine terminals, which do not pass through their entire vapor
control costs, will perceive a change in their minimum gasoline through-
put requirement. Because of competitive economics, these facilities
will be limited to the same per gallon tariff increase as the larger
terminals. Therefore, some marine terminals will have to absorb portion
of the cost of vapor control themselves, thereby falling below the
adjusted breakeven throughput. An example as to how this analysis
was conducted is shown in Figure VI.3. Presumably, the affected
facilities would realize this consequence and close without actually
installing vapor control equipment. The changes in profitability and
gasoline tariffs of the bulk terminal models caused by the proposed
vapor control regulations are summarized in Table VI.8.
b. Closure Summary
Our analysis indicates that 23 to 51 terminals, or 2-5% of all
gasoline terminals subject to the vapor control regulations, are
likely to close because they would now operate below their gasoline
The throughputs of the non-gasoline products and hence, their revenue
contribution, are assumed to remain the same as they were in the pre-
vapor control case.
VI.15
-------
TABLE Vj.7
CHANGE IN DAILY GASOLINE BREAKEVEN THROUGHPUT
AT BULK TERMINALS BECAUSE OF VAPOR CONTROL COSTS
LOW THROUGHPUT MODEL
HIGH THROUGHPUT MODEL
Primary System With Stand-By
Refrigeration/ Incineration/
Refrigeration Incineration Incineration Incineration
Primary Control System
MARINE TERMINAL
Gasoline Breakeven Through-
put (Pre-Vapor Control) 117.2
Incremental Gasoline Through-
put Required Due to Vapor
Control Capital and
Operating Costs 13.3
Gasoline Breakeven Through-
put (Post-Vapor Control) 130.5
Percent Increase Over Pre-
Control Throughput 11*
117.2
17.9
135.1
15*
117.2
24.4
141.6
2U
117.2
28.0
145.2
24%
, C.ntn.1 S,.te.
Refrigeration Incineration Incineration Incineration
213.8
0.0
213.8
0%
213.8
0.0
213.8
213.8
0.0
213.8
213.8
0.0
213.8
0%
PIPELINE TERMINAL
Gasoline Breakeven Through-
put (Pre-Vapor Control)
Incremental Gasoline Through-
put Required Due to Vapor
Control Capital and
Operating Costs
Gasoline Breakeven Through-
put (Post-Vapor Control)
Percent Increase Over Pre-
Control Throughput
145.7
145.7
145.7
145.7
212.5
212.5
212.5
212.5
0.0
145.7
or.
0.0
145.7
or.
0.0
145.7
.0*
0.0
145.7
0%
0.0
212.5
0%
0.0
212.5
0%
0.0
212.5
0%
0.0
212.5
0%
Assuming competitive pass through.
Source: Arthur D. Little, Inc.
-------
100
80
60
JO
3
|
o
40
20
Post-Vapor
Control
Breakeven
Throughput
Pre-Vapor
Control
"Breakeven
Throughput
Facilities Expected to Close Because
of Insufficient Profitability
J_
100
200
300
400
500
600
700
Daily Gasoline Throughput
(Thousand Gallons)
FIGURE VI.3
BREAKEVEN ANALYSIS OF THE
MARINE TERMINAL POPULATION
-------
TABLE VI.8
BULK TERMINALS ROI AND GASOLINE TARIFF IMPACTS1
LOW THROUGHPUT MODEL
MARINE TERMINAL
Post-Vapor Control ROI
Percent Increase/Decrease
over Pre-Control ROI2
Post-Vapor Control
Gasoline Tariff ($/Gal)
Percent Increase/Decrease
over Pre-Control Gasoline
Tariff
<:
-«
L. PIPELINE TERMINAL
oo
Post-Vapor Control ROI
Percent Increase/Decrease
over Pre-Control ROI2
Post-Vapor Control
Gasoline Tariff ($/Ga1
Percent Increase/Decrease
over Pre-Control Gasoline
Tariff
Primary Control System Primary System H1th Stand-By
TT~ ~~. ~T Refrigeration/ Incineration/
Refrigeration Incineration Incineration Incineration
HIGH THROUGHPUT MODEL
18.4%
(10.2%)
.0072
2.8%
20.5%
NC
.0048
6.0%
18.9%
8.2%)
.0074
5.IX
20.5%
NC
.0049
8.4?;
17.5%
(14.9%)
.0075
6.TX
20.5V
NC
.0050
11.5:"
17.8%
(13.1%)
.0076
8.U
20.5%
NC
.0051
13.5:'.
Assuming competitive cost pass through
2
Pre-Control ROI is 20.5%. ROI is simple before-tax return on net plant investment.
No Change - assumes full pass through of costs for this model.
Primary Control System Primary System
* * Refrigeration/
Refrigeration Incineration Incineration Incineration
With Stand-By
Incineration/
20.5%
NC3
.0054
3.8%
20.5%
NC
.0043
4.9%
20.5%
NC
.0056
6.9%
20.5";
NC
.0045
8.7%
20.57.
NC
.0057
8.2%
20.5%
NC
.0046
10.4"
20.5'.
NC
.0058
10.9:-
20.5',
Source: Appendix G
-------
breakeven throughputs after installing vapor control equipment (Table
VI.9). The redistribution of product volume from these closures would
slightly increase the volumes of some other terminals, thereby helping
them meet post-vapor control throughput levels. However, in this case,
the impact is so small that it can be disregarded. These closures
are based on the refrigeration and the incineration systems. If more
expensive technologies were considered, e.g., CRA or adsorption-absorp-
tion, the number of closures would be somewhat greater. All of the
above closures are expected to be small marine terminals having less
than 150,000 gallons of daily gasoline throughput. No closures are
expected to occur in either the large marine or the pipeline terminal
populations.
D. TERMINAL IMPACTS
In addition to terminal closures, the economic impacts of vapor
control in the bulk terminal industry are expressed in terms of the
employment displaced by these closures and the monetary cost of in-
stalling, financing and operating vapor control systems at all remain-
ing terminals subject to the vapor control regulations. While some
terminal operators may simply discontinue their gasoline throughput
rather than installing vapor control equipment, most operators are
not likely to be in a strong enough financial position to choose
this as a viable alternative. Therefore, this option has been excluded
from our discussion of potential terminal impacts.
1. Employment Impact
Between 300 and 700 workers, representing 1-2% of the estimated
employment at all gasoline terminals, are employed at the bulk terminals
expected to close because of vapor control economics (Table VI.10).
These employment figures were calculated by multiplying the average
number of workers at a small marine terminal by the estimated number
of closures.
VI.19
-------
TABLE VI.9
BULK TERMINAL CLOSURES BECAUSE OF VAPOR CONTROL ECONOMICS
1
Primary Control System
Refrigeration Incineration
Primary System
With Stand-By
Refrigeration/ Incineration/
Incineration Incineration
Petroleum Bulk Terminals
Subject to Vapor Control
1131
1131
1131
1131
rss
O
Terminal Closures Because of
Inaccessibility of Capital
Terminal Closures Because of
Insufficient Profitability
23
32
46
51
Remaining Terminals Installing
Vapor Control
1108
1099
1085
1080
1
Assuming competitive cost pass through.
Source: Arthur D. Little, Inc.
-------
TABLE VI.10
VAPOR CONTROL EMPLOYMENT AND COST IMPACTS AT BULK TERMINALS
PRIMARY CONTROL SYSTEM
PRIMARY SYSTEM WITH STAND-BY
_ , . . Refrigeration/ Incineration/
Refrigeration Incineration Incineration Incineration
Small Marine Terminals Closed
Due to Vapor Control Economics
23
32
46
51
Estimated Employment at Closed
Terminals
320
450
640
710
rss
Remaining Terminals Installing
Vapor Control Systems
1,108
1,099
1,085
1,080
Total Cost of Installing Vapor
Control (Million 1978 Dollars)
201.9
329.0
473.2
580.4
Source: Arthur D. Little, Inc., and Table VI.11
-------
2. National Cost of Compliance
The total cost of vapor control, i.e. installed capital costs,
financing and operating expenses, less appropriate recovery credits
over the expected 10-year useful life of the vapor control equipment,
ranges from $200 million, if only primary vapor control systems are
required, to almost $600 million, if primar.y/stand.-by. systems are
necessary (Table VI.10). Larger costs would result if more expensive
technologies were considered, e.g. CRA and adsorption-absorption. The
installed capital costs of national compliance range from $170 million
for a primary incineration unit to $365 million for a refrigeration
unit with incineration stand-by (Table VI.11). These capital costs
represent a substantial portion of the petroleum industry's $1.2 billion
1977 budget for the control or air pollution, ranging from 15% to 26%.
Furthermore, in 1977 the major oil companies spent $803 million for
environmental effluent abatement, of which the marketing portion was
2
approximately $120 million. Table VI.12 shows the magnitude of these
capital costs relative to the majors' estimated marketing budget for
environmental effluent abatement. These costs range from 140% to 300%
of the estimated environmental control budgets.
E. TANK TRAILER COSTS
Because the installation of vapor control equipment in the truck
transport fleet is essential to the control of gasoline vapors at bulk
terminals, the nationwide costs of installing such equipment are con-
sidered in this chapter. This cost could not be incorporated in the
model control system costs of the terminals because most gasoline
transports are owned by common carriers and not by terminal operators.
and Gas Journal, March 20, 1978.
2API Publication No. 4259, Environmental Expenditures of the U.S.
Petroleum Industry.
VI.22
-------
ro
GJ
Capital Investment
2
Financing Cost
3
Operating Expense
Recovery Credit
5
Capital Investment
Financing Cost
Operating Expense
Total Vapor Control Cost at
Bulk Terminals
TABLE VI.11
COST OF VAPOR CONTROL AT BULK TERMINALS1
(Million 1978 Dollars)
Primary System
With Stand-By
Refrigeration
255.7
77.8
205.4
(337. O)4
--
__
u i «jjr o ion
Incineration
171.6
52.2
105.2
--
--
Refrigeration/
Incineration
364.3
110.8
250.0
(314.7)
37.0
9.8
16.0
Incineration/
Incineration
280.5
85.3
151.8
--
37.0
9.8
16.0
201.9
329.0
473.2
580.4
1
All future cash streams discounted to present value using a discount rate of 10%.
Interest charges associated with vapor control debt are incurred over an 8-year period and
discounted to 1978 value.
3
Operating expenses and recovery credits are realized over the 10-year useful life of the vapor
control system and discounted to present value.
4
Represents a negative cost or a savings equivalent to the present value of the gasoline vapor
which otherwise would have been discharged into the atmosphere if a vapor recovery system was not
utilized.
'Cost of incineration stand-by units for bulk terminals already having a primary vapor control system.
Source: Arthur D. Little, Inc. estimates based on EPA cost data
-------
TABLE VI. 12
CAPITAL COST OF THE PROPOSED VAPOR CONTROL OPTIONS AS A
PERCENT OF THE PETROLEUM INDUSTRY'S 1977 ENVIRONMENTAL EXPENDITURES
Capital Cost of National Vapor Control
Compliance at Bulk Terminals (Million
1978 Dollars)
Primary Control System
Refrigeration Incineration
256
172
Primary System With Stand-By
Refrigeration/ Incineration/
Incineration Incineration
364
280
Percent of Major Oil Companies' 1977
Marketing Budget for Effluent Abatement
213%
143%
303%
233%
Percent of Total 1977 Industry Expenditures
to Control Air Pollution 22%
15%
26%
24%
Source: API Publication No. 4259, Environmental Expenditures of the U.S. Petroleum Industry. Oil &
Gas Journal, Nov. 20, 1978. and Table VI.11.
-------
Therefore, while this cost calculation is being treated separately,
it is still a fundamental part of the vapor control options addressing
bulk terminal operations.
In 1978, there were an estimated 29,200 gasoline tank trailers
in operation in the U.S., of which about 7,300 or 25% had already
installed vapor control equipment. Of the remaining trailers, 12,800
probably would be retrofitted with vapor control because they are less
than 5 years old, while the other 9,100 would have vapor control equip-
ment installed in their eventual replacements. Because gasoline demand
is not expected to increase significantly during the next 5 years, no
additional gasoline tank trailers are expected to be built other than
those needed to replace the existing fleet. The new and retrofit
segments of the gasoline trailer fleet are summarized in Table VI.13.
Based on these estimates of the trailer population and the equipment
costs presented in Chapter V, the total cost of installing and operat-
ing vapor control equipment on the gasoline trailer fleet is $101.4
million over the useful 12-year life of the trailers (Table VI.14).
VI.25
-------
TABLE VI. 13
ESTIMATED 1978 GASOLINE TRAILER POPULATION
MC-306 Trailers Built Between 1966 and 1978 36,900
Estimated 1978 Gasoline Tank Trailer Fleet 29,200
Trailers Already Equipped with Vapor Control ( 7,300)
Trailers to be Replaced within the next 5 years ( 9,100)
Retrofit Trailer Market 12,800
Estimated trailer lifetime of 12 years.
New Trailers Built to Replace Existing Fleet
within the next 5 years 9,100
New Trailers Required Because of an Increase in
Gasoline Demand 0
New Trailer Market 9,100
Total Number of Trailers Installing Vapor
Control Equipment 21,900
Source: Department of Commerce and Arthur D. Little, Inc.
VI. 26
-------
TABLE VI.14
TOTAL COST OF INSTALLING VAPOR CONTROL EQUIPMENT
ON THE GASOLINE TANK TRAILER FLEET
(Million 1978 Dollars1)
Capital Investment - Retrofit Market 26.9
- New Market 17.3
2
Financial Cost 5.0
3
Operating Expense 52.2
TOTAL CONVERSION COST 101.4
All future cash streams discounted to present value,
using a discount rate of 10%.
2100% debt financing for 3 years @ 9%.
Incurred over estimated trailer lifetime of 12.3 years,
Source: Arthur D. Little, Inc., and U.S. Environmental
Protection Agency cost estimates
VI. 27
-------
VII. BULK PLANT IMPACTS
A. INTRODUCTION
The purpose of this chapter is to identify all bulk plants that
are subject to the proposed vapor control regulations and to estimate
the economic impacts of those regulations on the bulk plant industry.
The analytic approach used in this chapter to calculate these economic
impacts is the same as that used in the preceding chapter on bulk
terminal impacts. An important addition to this analysis, however, is
the calculation of economic impacts for the three control options using
three distinct cost or control system scenarios. Because it is beyond
the scope of this study to select a "most likely" scenario, all poten-
tial impacts resulting from each are discussed below.
B. BULK PLANT POPULATION SUBJECT TO VAPOR CONTROL
As was the case in the bulk terminal analysis, not all of the bulk
plants identified by the market audit are subject to the vapor control
options discussed in Chapter IV. From the market audit results pre-
sented in Chapter VI, approximately 3,480 bulk plants are expected to
close during the next five years because of competitive economics and
market rationalization. The economics of vapor control may accelerate
their closing, but it cannot be held as the principal reason for their
closure. Similarly, the 790 non-gasoline bulk plants and the estimated
120 bulk plants already having vapor control systems are not subject to
the proposed vapor control regulations and, therefore, are excluded
from our closure analysis. Most of the bulk plants already having vapor
control systems would have to modify or augment their control capability
under the various regulations. However, because these facilities rep-
resent less than 1% of all gasoline bulk plants, these bulk plants are
not considered further in the closure analysis with regard to possible
stand-by systems. Therefore, approximately 14,250 bulk plants, or 76%
of the total 1978 bulk plant population, are subject to potential
closure caused by vapor control economics (Table VII.I and Figure VII.I).
A distribution of these facilities by gasoline throughput appears in
VII.1
-------
TABLE VII.I
PETROLEUM BULK PLANTS SUBJECT TO THE
PROPOSED VAPOR CONTROL OPTIONS
1978 Bulk Plant Audit 18,640
Bulk Plant Closures Between 1978 and 1983
Because of Market Rationalization ( 3,480)
Bulk Plants Having No Gasoline Throughput ( 790)
Gasoline Bulk Plants Already Having
Vapor Control Systems ( 120)
Total Number of Bulk Plants Subject to
the Proposed Vapor Control Options 14,250
Source: Arthur D. Little, Inc.
VII.2
-------
100
§ 80
u.
OJ
CL
JO
3
E
D
CJ
60 -
40 -
20 -
0
FIGURE VII.1
8 12
Daily Gasoline Throughput
(Thousand Gallons)
DISTRIBUTION OF BULK PLANTS
SUBJECT TO VAPOR CONTROL
Than 16
-------
Table VII.2. For the following closure analysis, the small or low
gasoline throughput model, i.e., average 4,000 gallons/day, will act
as a surrogate for all bulk plants having less than 8,000 gallons/day
of gasoline throughput. Similarly, the larger or high .throughput
model, i.e., average 20,000 gallons/day, will act as a surrogate for
the bulk plant population having more than 8,000 gallons/day of
gasoline throughput.
C. CLOSURE ANALYSIS
Bulk plants subject to vapor control regulations are assumed to
close because of the same reasons as bulk terminals:
Bulk plant operators are unable to obtain the capital
necessary to install vapor control equipment, or
t Bulk plants would operate below a minimum acceptable
level of profitability if vapor control equipment were
Installed.
Plant closures resulting because of the above factors are calculated
for each of the three cost scenarios discussed in Chapter IV and are
presented below.
1. Availability of Capital
In this analysis, bulk plants are considered as separate profit
centers subject to "stand alone" economics in order to determine their
ability to secure the capital necessary to Install vapor control
equipment. To assist the analysis, the bulk plant models and the
model vapor control systems are used to estimate the number of bulk
plant closures likely under each of the three control options for
each of the three cost scenarios. As was the case for bulk terminals,
the inability of these model facilities to incur and to service the
incremental debt associated with vapor control was translated into
potential closures in the actual bulk plant population.
a. Capital Requirement
The capital required to comply with the vapor control regulations
can represent a substantial part of existing net investment of the bulk
-------
TABLE VI1.2
DISTRIBUTION OF GASOLINE BULK PLANTS
SUBJECT TO THE PROPOSED VAPOR CONTROL OPTIONS
Daily
Gasoline Throu
Thousand
ghput
Cubic
Number of
Bulk Plants
Percent
of Total
Gallons Meters
>3
3-8
8-17
<17
>io
10-30
30-65
<65
4,080
8,750
1,160
260
29%
61%
8%
2%
Total 14,250 100%
Source: Arthur D. Little, Inc.
VII.5
-------
plant models. In order to comply with Option 1 regulations, vapor
control investment could equal 3%-7% of the current net investment of
the small bulk plant model and l%-3% of the net investment of the
larger model (Table VII.3). Compliance with Option 2, which requires
stricter vapor control than Option 1, requires a capital outlay of as
much as 40% of the net plant investment of the small bulk plant model
and 18% of the larger facility. Option 3, which requires the greatest
amount of gasoline vapor reduction, requires the greatest amount of
additional capital. Vapor control investment under this option can
exceed 100% of the net investment at the small model and equal 20% to
85% of the net investment of the larger facility. The substantial
capital investment required for Option 3 compliance will make it very
difficult for bulk plant operators to service this incremental debt,
even if the necessary funds can be secured.
b. Approach
The methodology used for calculating the number of expected bulk
plant closures resulting from an inability to obtain capital is the same
as that used in the bulk terminal analysis. The commercial lending rules
used in this analysis are the same as those presented in Table VI.5
and Figure VI.2. However, because the bulk plant industry has
historically been more leveraged than the bulk terminal industry, has
frequently used non-conventional financing methods, and is largely
comprised of jobbersmany of whose personal finances are virtually
indistinguishable from those of their bulk plants, we have assumed that
20% of the bulk plant operators failing to secure commercial loans
because their total debt obligation exceeds 50% of after-tax cash flow,
but is less than 100%, are able to obtain non-standard commercial
loans through established banking ties or by pledging personal assets.
Another 20% of these prospective borrowers are assumed to obtain non-
commercial financing, e.g., using personal funds, liquidating personal
assets, or borrowing from relatives and friends. However, if the pro-
posed debt obligation exceeds 100% of the projected cash flow, no
commercial loans of any sort will be made. Non-commercial loans would
VII.6
-------
TABLE VI 1. 3
ESTIMATED 1978 VAPQR CONTROL CAPITAL REQUIREMENT OF BULK PLANTS
-- (Thousand Dollars)
BULK PLANT1
Pre-Vapor Control Net
Plant Investment
Vapor Control
Investment
Balance
Incoming
Trucks Only
57.0
4.2
LOW
Balance In-
coming & Out
going Trucks
57.0
23.0
THROUGHPUT MUU
Primary Control System
Refrigeration Incineration
57.0
92.2
57.0
48.3
t L
Primary System
Refrigeration/
Incineration
«
5*7.0
117.4
With Stand-By
Incineration/
Incineration
57.0
73.6
Balance
Incoming
Trucks Only
143.0
4.2
M 1 (i H
Balance In-
coming & Out
going Trucks
143.0
25.7
1HROU6HPUT M 0 I
Primary Control System
Refrigeration Incineration
143.0 143.0
94.9 51.0
) E L
Primary System
Refrigeration/
Incineration
143.0
120.1
M1th Stand- By
Incineration/
Incineration
143.0
76.2
Vapor Control Investment
as a Percent of Pre-
Control Net Investment
40%
162%
,85*
206%
129%
18%
66S
36%
841
531
BULK PLANT
Pre-Vapor Control Net
Plant Investment 57.0 57.0
Vapor Control Investment 4.2 10.7
Vapor Control Investment
as a Percent of Pre-
Control Net Investment 7* 19*
57.0
79.8
140%
57.0
36.0
63t
57.0
105.1
184%
57.0
61.2
107X
143.0
4.2
3*
143.0
13.0
9%
143.0
82.1
57S
143.0
38.2
27%
143.0
107.4
75*
143.0
63.5
44%
BULK PLANT
Pre-Vapor Control Net
Plant Investment 57.0
Vapor Control Investment 1.7
Vapor Control Investment
as a'Fercent of Pre-
Control Net Investment 3%
NOJC costs for top loading.
57.0
3.8
7*
57,0
73.0
128%
57.0
29.1
51*
57.0
98.2
172*
57.0
54.4
95%
143.0
1.7
1*
143.0
4.9
3%
143.0
74.0
52%
143.0
30.1
2U
143.0
99.3
69%
143.0
55.4
39%
2Houston-Ga1veston costs for top loading. Colorado APCD costs for top loading.
Source: Appendix C and Environmental Protection Agency cost estimates
-------
still be possible for up to 20% of these applicants failing the lending
criteria if personal, relatives', or friends' funds were available at
very low interest rates or if an operator accepted a smaller take-home
pay. Admittedly, these percentages probably have leakage and they, in
effect, represent a form of cross-subsidy. However, this modification
to the lending model is necessary in order to recognize the nature of
the bulk plant industry where many facilities are very smallbeing
only one- or two-man operations.
Discussions with the National Oil Jobbers Council (NOJC) and local
jobber and petroleum marketer associations indicated that many bulk
plants currently have 50% to 75% of their current plant investment
under mortgage. This roughly corresponds to a debt-to-equity ratio of
between 1 ;l and 3:1. Pre-control debt obligation as a percent of cash
flow was calculated for the bulk plant models assuming that 60% of net
plant investment was mortgaged for 20 years at a 9% annual interest
rate. The result of this calculation was that debt obligations
equalled 21% to 23% of cash flow, or that cash flow covered debt obli-
gations by a ratio of about 4:1 (Table VII.4). Total debt as a percent
of cash flow was then calculated assuming that 100% of the incremental
vapor control investment, required for each cost scenario and for each
2
control option, was borrowed for 5 years at an 11% annual interest rate.
Under this condition, the total debt obligation ranged from 25% to over
100% of cash flow for the small bulk plant model and from 22% to 60% of
cash flow for the larger model. Because small bulk plants, which com-
prise the majority of the 1978 bulk plan population, are the most
Borrowing terms currently available if financing a bulk plant proto-
type at its book value.
2
Bulk plant operators are not financially strong enough to obtain the
same borrowing terms, both in duration and interest rate, as the bulk
terminal operators.
VII.3
-------
TABLE VII. 4
» 1
BULK PLANT1
Pre-Vapor Control
Post-Vapor Control
BULK PLANT2
Pre-Vapor Control
Post-Vapor Control
BULK PLANT3
Pre-Vapor Control
Post-Vapor Control
Balance
Incoming
Trucks Only
21%
31%
21%
311
21*
24%
Balance In-
coming & Out
going Trucks
21%
61%
21*
42%
21%
29%
TERM DEBT AS
Refrigeration Incineration
2U 21%
> 100% 96%
21% 21%
> 100% 83%
21% 21*
> 100% 58%
A PERCENT OF AFTER-TAX CASH FLOW
E L
Primary System
Refrigeration/
Incineration
21%
> 100%
21%
> 100%
21%
> 100%
With Stand-By
Incineration/
Incineration
21%
> 100%
21%
> 100%
21%
> 100%
AT BULK PLANTS
Balance
Incoming
Trucks Only
23%
24%
23%
24%
23%
22%
Balance In-
coming i Out
qolng Trucks
23%
36%
23%
29%
231
24%
Primary Control System
Refrigeration
23%
58%
23%
55%
23%
53%
Incineration
23%
' 46*
23*
41*
23*
25*
Primary System
Refrigeration/
Incineration
23%
62%
23S
60S
23%
59*
With Stand-By
Incineration/
Incineration
23*
54*
23*
50%
23*
48%
NOJC costs
Houston-Galveston costs
3Colorado APCD costs
So"Te: Appendix f
-------
severely impacted according to the above analysis, a substantial
number of closures are expected.
c. Closure Summary
The number of bulk plant closures expected to result from an
inability to secure capital varies significantly by control option and
cost scenario. No bulk plant closures are likely to occur because of
Option 1, which has the smallest capital requirement of the three con-
trol options (Table VII.5). Option 2 is expected to cause approximately
1,690 facilities, or 12% of all gasoline bulk plants, to close if the
NOJC, or most expensive, cost scenario is assumed. No closures are
expected for Option 2 for the other two cost scenarios. Because
Option 3 compliance requires the greatest amount of capital, it is the
option expected to cause the largest number of bulk plant closures. The
number of bulk plant closures expected as a result of Option 3 ranges from
1,060 for a Colorado APCD incineration unit to 8,990 for a NOJC refri-
geration/incineration system. The bulk plant closures identified here
will be subtracted from the total number of bulk plants subject to
possible closure to avoid possible double-counting. Only those
facilities having adequate access to capital are subject to possible
closure resulting from insufficient profitability.
2. Insufficient Profitability
Many of the bulk plants having access to adequate capital may still
close because of vapor control economics. Bulk plants failing to
achieve a minimum level of profitability after vapor control equipment
is installed are assumed to close. Bulk plants will continue operating
as long as the bulk plant operators can meet current liabilities, i.e.,
operating expenses (including salaries) and debt obligations (principal
and interest). Bulk plants would continue to operate under these con-
ditions even if no return on equity investment was earned. Bulk
plant operators having limited business alternatives for their equity
investment or believing that profitability would increase in the future
as other facilities close would remain in business.
VII.10
-------
TABLE VI 1.5
BULK PLANT CLOSURES BECAUSE OF INACCESSIBILITY OF CAPITAL
OPTION 1
Balance
Incoming
Trucks Only
CONTROL S.TRATEGY
OPTION 2
Balance In-
coming & Out-
going Tracks
OPTION 3
Primary Control System
Refrigeration Incineration
Primary System With Stand-By
Refrigeration/ Incineration/
Incineration Incineration
NOJC Cost Scenario
0
1,690
8,930
6,080
8,990
8,880
Houston-Galveston Cost
Scenario
8,890
4,370
8,960
8,820
Colorado APCD 'Cost
Scenario
0
8,870
1,060
8,950
8,820
Source: Arthur D. Little, Inc.
-------
a. Approach
The methodology employed to calculate bulk plant closures is the
same as that used in analyzing bulk terminals. Gasoline breakeven
throughputs were calculated for the bulk plant models under base case
conditions (Table VII.6). Facilities operating below this breakeven
volume are assumed to close due to reasons other than the vapor control
options. All bulk plants operating above this throughput would remain
in operation. If the bulk plant models must cover higher operating
expenses or larger loan payments because of vapor control, the gasoline
breakeven throughput will increase. Some bulk plants, once operating
above breakeven volumes, would now operate below these adjusted break-
even volumes. The example of this methodology shown in Figure VI.3
for bulk terminals is also appropriate here for bulk plants.
The incremental gasoline throughput necessary to cover all vapor
control costs is shown in Table VII.6. A summary of the changes in
profitability and gasoline tariff of the bulk plant models under the
various control options and cost scenarios is presented in Table VII.7.
In addition to the larger bulk plants, an estimated 30% of the small
bulk plants will be able to pass through the entire cost of vapor
control. These facilities are partially shielded from the full force
of competitive pressure due to transportation economics, i.e., the
incremental cost per gallon of full vapor control pass through is less
than the transportation cost of a marginal gallon of gasoline irovV-d
into the bulk plant's service area. Other small bulk plants, however,
will realize an increase in their breakeven throughput as a result of
partially absorbing the costs of vapor control. Their gasoline tariff
increase is limited to the same per gallon increase as the larger
facilities and they will, therefore, experience a decline in margin and
an increase in breakeven throughput.
The product volumes of the bulk plants which closed because they
lacked the capital necessary to install vapor control equipment will be
redistributed across the remaining bulk plant population. This
VII. 12
-------
TABLE VII.6
H 1
1 t
CO
Gasol ine Breakeven
Throughput {Pre-
Vapor Control )
Incremental Gasoline
Throughput Required
Due to Vapor Control
Capital and Operating
Costs
Gasoline Breakeven
Throughput (Post-
Vapor Control)
Percent Increase Over
Pre-Control Throughput
BULK PLANT3
Gasoline Breakeven
Throughput (Pre-
Vapor Control)
Incremental Gasoline
Throughput Required
Due to Vapor Control
Capital and Operating
Costs
Gasoline Breakeven
Throughput (Post-
Vapor Control)
Percent Increase Over
.:re-Control Throughput
SULK PLANT4
*a saline Breakeven
Throughput (Pre-
Vapor Control )
Incremental Gasoline
Throughput Requi red
Due to Vapor Control
Capital and Operating
Costs
Gasoline Breakeven
Throughput (Post-
Vapor Control)
Percent Increase Over
Pre-Control Throughput
CHANGE IN DAILY GASOLINE BREAKEVEN THROUGHPUT AT BULK PLANTS BECAUSE OF VAPOR CONTROL COSTS1
(Thousand Gallons)
.... ,.. LOW THROUGHPUT MODEL H I 0 || THROUGHPUT M 0 D E 1
Balance Balance In- Balance Balance In- pHmar., Control 5rtcn1 Primary System With Stand-By
Trucks Only going Trucks Refrigeration Incineration Incineration Incineration Trucks Only going Trucks Refrloeration Incineration Incineration Incineration
3.2 3.2 3.2 3.2 3.2 3.2 16.1 16.1 16.1 16.1 16.1 16.1
0.1 0.5 2.7 1.4 3.4 2.1 0.0 0.0 0.0 0.0 0.0 0.0
3.3 3.7 5.9 4.6 6,6 5.3 16.1 16.1 16.1 16.1 16.1 16.1
3% 15% 84JI 44% >100% 66* 0% 0% OX 0% 0% 0*
3.2 3.2 3.2 3.2 3.2 3.2 16.1 16.1 16.1 16.1 16.1 16.1
O.T 0.2 2.4 1.1 3.1 1.8 0.0 0.0 0.0 0.0 0.0 0.0
3.3 3.4 5.6 4.3 6.3 5.0 16.1 16.1 16.1 16.1 16.1 16.1
3* 62 75X 3« 97% 56% OX 0* OX « OS 0*
3.2 3.2 3.2 3.2 3.2 3.2 16.1 16.1 16.1 16.1 16.1 16.1
°-° 0.04 2.2 0.9 2.9 1.6 0.0 0.0 0.0 0.0 0.0 0.0
3'2 3'24 5-* «' 6-1 4-8 16.1 16.1 16.1 u.l 16.i ,6 ,
<* 1* 69* 28i 91% 50« 0* 0% 0% 0% Q% OS
Assuming competitive cost pass through.
Source: Arthur D. Little, Inc.
NOJC costs.
Houston-Galveston costs.
Colorado APCO costs.
-------
TABLE VI 1.7
liULK PLANT ROI AMD GASOLINE TARIFF IMPACTS
LOW THROUGHPUT MODEL
BULK PLANT1
Post-Vapor Control ROI
Percent Increase/
(Decrease) Over Pre-
Control ROI2
Balance Balance In- p.,..,-., control Svstem Primary System With Stand-By
Incoming coming & Out Primary uintroi Astern Refrigeration/ Incineration/
Trucks Only going Trucks Refrigeration Incineration Incineration Incineration
17.3*
(15.7*)
Post-Vapor Control
Gasoline Tariff ($/G«l) .0322
Percent Increase/
(Decrease) Over Pre-
Control Gasoline Tariff ( 0.61)
BULK PLANT
Post-Vapor Control ROI
Percent Increase/
(Decrease) Over Pre-
Control ROIZ
17.3%
(15.71)
Post-Vapor Control
Gasoline Tariff ($/Ga1) .0322
Percent Increase/
(Decrease) Over Pre-
Control Gasoline Tariff ( 0.6%)
BULK PLANT
Post-Vapor Control ROI
Percent Increase/
(Decrease) Over Pre-
Control ROI2
19.2%
( 6.8*)
Post-Vapor Control
Gasoline Tariff ($/Gal) .0321
Percent Increase/
(Decrease) Over Pre-
Control Gasoline Tariff ( 0.9*
7.81
(62.11)
.0328
1.41
13.21
(35.8*)
.0323
( 0.11)
17.75
(14.1?,)
.0320
( 1.11)
Negative
.0353
9.11
Negative
.0349
7.8%
Negative
.0346
1.7%
Negative
.0347
7.0%
1.2%
(94.3",)
.0342
5.6S
10.11
(50.7X)
.0379
17.01
Negative
.0364
12.5%
Negative
.0360
11.1*
Negative
.0356
10.0*
Negative
.0357
10.11
Negative
.0352
8.71
.0349
7.7%
NOJC costs.
2
HIGH THROUGHPUT MOD
&alflnc£ In-
comlngiOut Mmf* C°ntro1 S/5tem
Trucks Only going Trucks Refrigeration Incineration
E L
Primary System H1th Stand-By
Refrigeration/ Incineration/
Incineration Incineration
20.51
HC3
.0174
(1.01)
20.51
NC
.0174
(1.01)
20.51
NC
.0180
2.61
20.51
NC
.0175
(0.21)
Pre-control ROI Is 20.6%. ROI Is a simple before-tax return on net plant Investment.
20.51
NC
.0205
16.91
20.51
NC
.0200
14.31
20.51
NC
.0198
13.01
20.51
NC
.0194
10.4%
No Change - assumes full pass through of costs for this model.
Source: Appendix G
Houston-Galveston costs.
Negative 20.51 20.51 20.51 20.5%
NC NC NC NC
.0173 .0172 .0197 .0190
(1.6%) (2.0%) 12.4% 8.4%
Colorado APCD costs
20.51
NC
.0216
23.11
20.51
NC
.0211
20.5%
20.51
NC
.0208
18.51
20.51
NC
.0208
18.71
20.51
NC
.0204
16.11
20.5%
NC
.0200
14.1%
-------
increase in product throughput will assist the facilities under con-
sideration here to achieve their new breakeven volumes. However, the
amounts of this redistribution for Options 1 and 2 are rather insigni-
ficant since the incremental throughput of only one of the six cost
scenarios is greater than zero and even that is less than 700
gallons/day. The additional product volumes for Option 3 range from
under 500 gallons/day to over 10,000 gallons/day. As was the case
for Options 1 and 2, the incremental volumes resulting from the low
end of this range can be regarded as insignificant. Volume adjust-
ments caused by the high end of this range, however, are quite
significant. The redistribution of this product will greatly reduce
the number of expected bulk plant closures caused by insufficient
profitability, but it also is expected to alter many of the basic
attributes which have historically characterized the bulk plant
industry. Considering the magnitude of the closures and the redis-
tributed volumes described above, a substantially new and different
secondary storage industry is likely to emerge.
b. Closure Summary
The number of bulk plants able to obtain capital but having to
close because of insufficient profitability is shown in Table VII.8.
The number of closures varies by control option and cost scenario.
Closures resulting from Option 1 are estimated to be 130 for the NOJC
and Houston-Galveston cost scenarios and zero for the Colorado APCD
cost scenario. Closures resulting from Option 2 range from 50 to 530
facilities, while Option 3 compliance is expected to cause between 600
and 1,300 bulk plants to close. A summary of all bulk plant closures
caused by vapor control economics, as well as the number of remaining
bulk plants installing vapor control equipment, is shown in Tables VII.9
through VI1.11.
VI 1.15
-------
TABLE VI1.8
BULK PLANT CLOSURES BECAUSE OF INSUFFICIENT PROFITABILITY
NOJC Cost Scenario
OPTION 1
Balance
Incoming
Trucks Only
130
CONTROL STRATEGY
OPTION 2
Balance In-
coming & Out-
golng Trucks
530
OPTION 3
Primary System with Stand-By
Refrigeration/ Incineration/
Refrigeration Incineration Incineration Incineration
Primary Control System
1,040
900
1,300
800
Houston-Galveston Cost
Scenario 130
240
920
890
1,180
690
Colorado APCD Cost
Scenario
50
840
1,010
1,100
610
Source: Arthur D. Little, Inc.
-------
TABLE VI I.9
BULK PLANT CLOSURES BECAUSE OF VAPOR CONTROL
ECONOMICS1 RESULTING FROM THE NOJC COST SCENARIO
OPTION 1
Balance
Incoming
Trucks Only
CONTROL STRATEGY
OPTION 2
Balance In-
coming & Out-
going Trucks
OPTION 3
Primary Control System
Refrigeration Incineration
Primary System with Stand-By
Refrigeration/ Incineration/
Incineration Incineration
Petroleum Bulk Plants
Subject to Vapor
Control
14,250
14,250
14,250
14,250
14,250
14,250
Bulk Plant Closures
Because of Inaccessi-
bility of Capital
1,690
8,930
6,080
8,990
8,880
Bulk Plant Closures
Because of Insufficient
Profitability
130
530
1,040
900
1,300
800
Remaining Bulk Plants
Installing Vapor
Control
1
14,120
12,030
Assuming competitive cost pass through.
Source: Table VII.5 and VII.8
4,280
7,270
3,960
4,570
-------
TABLE VII.10
BULK PLANT CLOSURES BECAUSE OF VAPOR CONTROL
ECONOMICS1 RESULTING FROM THE HOUSTON-GALVESTON COST SCENARIO
Petroleum Bulk Plants
Subject to Vapor
Control
OPTION 1
Balance
Incoming
Trucks Only
14,250
CONTROL STRATEGY
OPTION 2
c^ngYSut- Primary Control System
going Trucks Refrigeration Incineration
OPTION 3
14,250
14,250
14,250
Primary System With Stand-By
Refrigeration/ Incineration/
Incineration Incineration
14,250
14,250
_, Bulk Plant Closures
00 Because of Inaccessi-
bility of Capital 0
8,890
4,370
8,960
8,820
Bulk Plant Closures
Because of Insufficient
Profitability
130
240
920
890
1,180
690
Remaining Bulk Plants
Installing Vapor
Control
14,120
14,010
4,440
8,990
4,110
4,740
1
Assuming competitive cost pass through.
Source: Table VI1.5 and VI1.8
-------
TABLE VI1.11
BULK PLANT CLOSURES BECAUSE OF VAPOR CONTROL
ECONOMICS1 RESULTING FROM THE COLORADO APCD COST SCENARIO
Petroleum Bulk Plants
Subject to Vapor
Control
OPTION 1
Balance
Incoming
Trucks Only
14,250
CONTROL STRATEGY
OPTION 2
Balance In-
coming & Out-
golng Trucks
14,250
OPTION 3
Primary Control System
Refrigeration Incineration
14,250
14,250
Primary System With Stand-By
Refrigeration/ Incineration/
Incineration Incineration
14,250
14,250
Bulk Plant Closures
Because of Inaccessi-
bility of Capital 0
8,870
1,060
8,950
8,820
Bulk Plant Closures
Because of Insufficient
Profitability 0
50
840
1,010
1,100
610
Remaining Bulk Plants
Installing Vapor
Control
14,250
1
14,200
Assuming competitive cost pass through.
4,540
12,180
4,190
4,820
Source: Table VII.5 and VII.8
-------
D. BULK PLANT IMPACTS
In addition to bulk plant closures, the economic impacts of vapor
control on the bulk plant industry are expressed in terms of the employ-
ment displaced by these closures and the monetary cost of installing,
financing, and operating vapor control systems at all the remaining
bulk plants.
1. Employment Impact
At bulk plants, the number of employees displaced by the proposed
vapor control options ranges from zero to 43,700 (Table VII. 12). These
numbers were calculated by multiplying the average number of employees
per large and small bulk plant times the number of expected closures of
each type. Approximately 550 workers, or less than 1% of the total
employment at gasoline bulk plants, are displaced by closures caused by
Option 1. Up to 9,400 workers, or 13% of the worker population, are
displaced by closures caused by Option 2 compliance, while as many as
43,700 workers, or 61% of those employed at gasoline bulk plants, are
likely to be displaced by Option 3.
2. National Cost of Compliance
The installation and operation of vapor control systems at bulk
plants over the estimated 10-year useful life of the equipment may cost
as much as $750 million or produce a savings of up to $23 million,
depending upon the control option and the cost scenario selected
(Table VII.13). A cost savings is possible because the Colorado cost
scenario requires less than half the capital investment of the other
systems but still produces the same recovery credit as the more expen-
sive systems. Depending on the set of costs examined, Option 1
compliance ranges from a $23 million savings to a cost of $37 million;
Option 2 compliance ranges from a savings of $6 million to a cost of
$376 million; and Option 3 compliance costs between $465 and $750
million. A more detailed breakdown of all control system costs is
presented in Tables VII.14 through VII.16.
VII.20
-------
TABLE VII.12
EMPLOYMENT IMPACT
NOJC COST SCENARIO
Bulk Plants Closed
Because of Vapor
Control Economics
Estimated Employment
At Closed Bulk Plants
HOUSTON-6ALVESTON COST
OPTION 1
Balance
Incoming
Trucks Only
130
550
SCENARIO
Bulk Plants Closed
Because of Vapor
Control Economics 130
Estimated Employment
At Closed Bulk Plants 550
COLORADO APCD COST SCENARIO
Bulk Plants Closed
Because of Vapor
Control Economics
Estimated Employment
At Closed Bulk Plants
0
0
AT BULK PLANTS
r f
l> V.
OPTION 2
Balance In-
coming & Out-
going Trucks
2,220
9,440
240
1,020
50
210
BECAUSE OF VAPOR
) N T
R 0 L S T
Primary Control
Refri
9,
42,
9,
41,
9,
41,
CONTROL
R A
T E
System
ECONOMICS
Gv
I
OPTION 3
Primary System
Oii-Fi-i
I\C 1 1 1
geration Incineration Inci
970
370
810
690
710
270
6,
29,
5,
22,
2,
8,
980
660
260
360
070
800
10
43
10
43
10
42
geration/
neration
,290
,730
,140
,100
,050
,710
With
Stand-By
Incineration/
Incineration
9,
41,
9,
40,
9,
40,
680
140
510
420
430
080
Source: Arthur D. Little,Inc.
-------
TABLE VI1.13
ro
ro
TOTAL COST OF VAPOR
NOJC COST SCENARIO
Bulk Plants Installing
Vapor Control Equip-
ment
Total, Vapor Control
Cost1
HOUSTON -GALVESTON COST
OPTION 1
Balance
Incoming
Trucks Only
14,120
36.9
SCENARIO
Bulk Plants Installing
Vapor Control Equip-
ment 14,120
Total Vapor Control Cost 36.9
COLORADO APCD COST SCENARIO
Bulk Plants Installing
Vapor Control Equip-
ment 14,250
Total Vapor Control Cost (22. 7)2
(Million 1
p
OPTION 2
Balance In-
coming & Out-
going Trucks
12,030
375.5
14,010
154.8
14,200
(6.5)*
CONTROL AT BULK
978 Dollars)
0 N T R 0 L S
PLANTS
T R A T E G Y
OPTI
Primary Control System
Refrigeration
4,280
636.9
4,440
569.3
4,540
528.6
Incineration
7,270
651.3
8,990
619.7
12,180
696.8
ON 3
Primary System
Refrigeration/
Incineration
3,960
747.3
4,110
698.3
4,190
656.0
With Stand-By
Incineration/
Incineration
4,570
589.5
4,740
514.0
4,820
465.2
Vapor control costs include capital charges, financing cost and operating expenses over the useful life of the
-equipment. All future cash streams have been discounted to present value using a discount rate of 10%.
Negative cost or net savings because the net present value of the gasoline recovery credit exceeds the net
present value of the capital, financing and operating expenses.
Source: Tables VII.14 and VI1.16
-------
TABLE VI 1.1.4
oo
Capital Investment
2
Financing
Operating Expense
Recovery Credit
3
Total Vapor Control
Costs
COST OF VAPOR CONTROL AT BULK PLANTS,
RESULTING FROM THE NOJC COST SCENARIO
OPTION 1
Balance
Incoming
Trucks Only
60.0
13.3
26.0
(62. 4)4
(Million 1
OPTION 2
Balance In-
coming & Out-
going Trucks
280.9
62.3
120.7
(88.4)
978 Dollars)
0 N T R 0 L S
T R A T E G Y
OPTI
Primary Control System
Refrigeration
398.0
88.3
279.5
(128.9)
Incineration
355.1
78.8
217.4
ON 3
Primary System
Refrigeration/
Incineration
468.4
103.9
290.7
(115.7)
With Stand-By
Incineration/
Incineration
339.8
75.4
174.3
36.9
375.5
636.9
651.3
747.3
589.5
All future cash streams discounted to present value using a discount rate of 10%.
2 T
Interest charges associated with vapor control debt are incurred over a 5-year period and discounted to present
value.
3
Operating expenses and recovery credits are realized over the 10-year useful life of the vapor control system
and discounted to present value.
Represents a negative cost or a savings equivalent to the present value of the gasoline vapor which otherwise
would have been discharged into the atmosphere if a vapor recovery system was not utilized.
Source: Arthur D. Little, Inc. estimates based upon EPA cost data.
-------
TABLE VI1.15
ro
Capital Investment
2
Financing
3
Operating Expense
3
Recovery Credit
Total Vapor Control
Costs
COST OF VAPOR CONTROL AT BULK PLANTS ,
RESULTING FROM THE HOUSTON -GALVESTON COST SCENARIO
OPTION 1
Balance
Incoming
Trucks Only
60.0
13.3
26.0
(62.4)4
(Million 1
r
OPTION 2
Balance In-
coming & Out-
going Trucks
153.1
34.0
66.0
(98.3)
978 Dollars)
0 N T R 0 L S
T R A T E
Primary Control System
Refrigeration
357.6
79.4
266.1
(133.8)
Incineratl
- 326.5
72.5
220.7
R Y
U I
OPTION 3
Primary System
on Incineration
434.8
96.5
286.2
(119.2)
With Stand-By
Incineration/
Incineration
293.4
65.1
155.5
36.9
154.8
569.3
619.7
698.3
514.0
1
All future cash streams discounted to present value using a discount rate of 10%.
Interest charges associated with vapor control debt are incurred over a 5-year period and discounted to
present value.
o
Operating expenses and recovery credits are realized over the 10-year useful life of the vapor control system
and discounted to present value.
Represents a negative cost or a savings equivalent to the present value of the gasoline vapor which otherwise
would have been discharged into the atmosphere if a vapor recovery system was not utilized.
Source: Arthur D. Little,Inc. estimates based upon EPA cost data
-------
TABLE VII.16
ro
wi
Capital Investment
2
Financing
Operating Expense
3
Recovery Credit
Total Vapor Control
Costs
COST OF VAPOR CONTROL AT BULK PLANTS
RESULTING FROM THE COLORADO APCD COST SCENARIO
OPTION 1
Bal ance
Incoming
Trucks Only
24.2
5.4
10.5
(62. 8)4
OPTION 2
Balance In-
coming & Out-
going Trucks
56.0
12.4
24.3
(99.2)
0 N T R 0 L S
T R A T E G Y
OPTI
Primary Control System
Refrigeration
332.8
73.9
258.1
(136.2)
Incineration
355.9
79.0
261.9
__
ON 3
Primary System
Refrigeration/
Incineration
412.9
91.6
272.2
(120.7)
Uith Stand-By
Incineration/
Incineration
263.5
58.5
143.2
(22.7)
( 6.5)
528.6
696.8
656.0
465.2
11 future.cash streams discounted to present value using a discount rate of 10%.
rt
Interest charges associated with vapor control debt are incurred voer a 5-year period and discounted to
present value.
^Operating expenses and recovery credits are realized over the 10-year useful life of the vapor control system
and discounted to present value.
Represents a negative cost or a savings equivalent to the present value of the gasoline vapor which otherwise
would have been discharged into the atmosphere if a vapor recovery system was not utilized.
Source: Arthur D. Little, Inc. estimates based upon EPA cost data
-------
APPENDIX A
MARKET AUDIT OF BULK
STORAGE FACILITIES
A.I
-------
TABLE A.I
Thousand Cu. Meters
Thousand Barrels
MARINE TERMINALS
Majors & Semi -Majors
Independents
PIPELINE TERMINALS
Majors & Semi -Majors
Independents
TOTAL
% Total
Excludes crude and
Source: Bureau of Ce
Independent
BULK TERMINALS AND STORAGE CAPACITY IN THE U.S. - 19781
RANGE Or STORAGF TAPAflTY ^
< 32 32-95 95-159 > 159 PERCENT GASOLINE
PERCENT OF TOTAL TOTAL AS A PERCENT
<200 201-600 601-1000 >1000 TOTAL OF TOTAL TOTAL CAPACITY CAPACITY GASOLINE CAPACITY TOTAL CAPACITY
Thousand Thousand Thousand Thousand
Cu. Meters Barrels Cu. Meters Barrels
232 199 78 78 587 33% 54,417 342,273 43% 22,739 143,367 42%
231 60 33 48 372 22% 28,026 181,502 28% 6,992 43,979 25*
253 213 84 33 583 33% 28,261 177,758 23% 13,438 84,522 48*
118 62 20 9 209 12% 10,999 69,183 9% 3,886 24j440 35*
834 534 215 168 1,751 100% 122,534 770,716 100% 47,109 296,308 38%
48% 30% 12S 10% 100%
product storage at refineries
nsus, 1972 Census of Wholesale Trade; U.S. Army Corps of Engineers, Port Series; National Petroleum News, Factbook (1972-1978);
Liquid Terminals Association, 1978 Directory - Bulk Liquid Terminals and Storage Facilities; Industry contacts; Arthur D. Little, Inc.
-------
TABLE A.g
BULK TERMINALS AND STORAGE CAPACITY IN PADD 1-1978
Thousand Cu. Meters < 32
Thousand Barrels <200 201-600
MARINE TERMINALS
Majors & Semi-Majors 97 118
Independents 138 48
RANGE OF STORAGE CAPACITY
32-95 95-159 > 159
601-1000 >1000 TOTAL
46
13
50 311
23 222
PERCENT
OF TOTAL
42%
30%
TOTAL CAPACITY
ThousandThousand
Cu. Meters Barrels
PERCENT
OF TOTAL TOTAL
CAPACITY GASOLINE CAPACITY
Thousand Thousand
Cu. Meters Barrels
38,702 243,432 61%
13,990 87,996
21%
15,094 94,939
2,845 17,895
GASOLINE
AS A PERCENT
TOTAL CAPACITY
39%
20%
PIPELINE TERMINALS
Majors & Semi -Majors
Independents
TOTAL
% Total
% U.S.
Excludes crude and
82
19-
336
45%
40%
product
51
14
231
31%
43%
36
..
95
13%
44%
10
83
11%
49%
179 24% 10,192
33 4% 1.287
745 100% 64,172
100%
43%
64,107 16%
8,098 2%
403,633 100%
52%
storage at refineries
Source: Bureau of Census, 1972 Census
Independent
Liquid
Terminals
of Wholesale
Association,
Trade; U.S.
Army Corps of Engineers, Port
1978 Directory - Bulk Liquid Terminals and
Series; National Pi
Storage Facilities
5,606 35,259
270 1,701
23,815 149,792
51%
55%
2 If.
37%
-------
TABLE A.3
BULK TERMINALS AND STORAGE CAPACITY IN PADD II - 1978
1
Thousand Cu. Meters < 32
Thousand Barrels <200
MARINE TERMINALS
Majors 4 Semi -Majors 12
Independents 20
PIPELINE TERMINALS
Majors & Semi -Majors 97
Independents 64
TOTAL' 193
% Total 45%
% U.S. 23%
Excludes crude and product
32-95
201-600
34
17
95
20
166
39%
31%
muc. vr JIUTW
95-159
601-1000
11
5
23
7
46
11%
21%
UL unrnuiii -
> 159 PERCENT
PERCENT OF TOTAL
>1000 TOTAL OF TOTAL TOTAL CAPACITY CAPACITY
Thousand Thousand
Cu. Meters Barrels
5 62 14% 3.725 23.431 15%
2 44 10% 2,636 16.580 10%
11 226 53% 13.056 82,121 52%
6 97 23% 5.738 36.088 23%
24 429 100% 25,155 158,219 100%
6% 100%
14% 25% 21%
TOTAL
GASOLINE CAPACITY
Thousand Thousand
Cu. Meters Barrels
1,788 11,247
538 3,386
5,484 34,491
2.066 12.992
9,875 62,115
21%
GASOLINE
AS A PERCENT
TOTAL CAPACITY
48%
20%
42%
23%
39%
storage at refineries
Source: Bureau of Census, 1972 Census
Independent Liquid
Terminals
of Wholesale
Association,
Trade; U.S. Army Corps of Engineers, Port Series; National Petroleum News, Factbook (19;
1978 Directory - Bulk Liquid Terminals and Storage Facilities;
Industry contacts; Arthur
72-1978);
D. Little, Inc.
-------
BULK TERMINALS AND STORAGE CAPACITY IN PADD III -1978*
Thousand Cu. Meters < 32
Thousand Barrels <200
32-95
201-600
nnnuc. ur aiuiv
95-159
601-1000
nuc v.wm.1 1 1
> 159
PERCENT
>1000 TOTAL OF TOTAL
PERCENT
OF TOTAL TOTAL
TOTAL CAPACITY CAPACITY GASOLINE CAPACITY
GASOLINE
AS A PERCENT
TOTAL CAPACITY
Thousand Thousand Thousand Thousand
Cu. Meters Barrels Cu. Meters Barrels
MARINE TERMINALS
Majors & Semi -Majors 39
Independents 38
PIPELINE TERMINALS
Majors & Semi -Majors 60
Independents 12
TOTAL 149
% Total 54%
% U.S. 18%
Excludes crude and product
19
11
16
6
52
19%
10%
storage at
Source: Bureau of Census, 1972 Census
Independent Liquid
10
10
11
3
34
12%
16%
refineries
of Wholesale
13 81 29% 6
17 76 28% 9
7 94 34% 2
4 25 9% 1
41 276 100% 20
15% 100%
24% 16%
Trade; U.S. Army Corps of Engineers,
Terminals Association, 1978 Directory - Bulk Liquid Terminals
,455 40,600 32% 3,808 23,954
,218 57,982 46% 2,756 17,332
,881 18,118 14% 1,210 7,610
,514 9,522 8% 454 2,857
,068 126,223 100% 8,228 51,753
16% 17%
Port Series; National Petroleum News, Factbook (1972-
and Storage Facilities; Industry contacts; Arthur D.
59%
30%
42%
30%
41%
1978);
Little, Inc.
-------
TABLE A.5
BULK TERMINALS AND STORAGE CAPACITY IN PADD IV - 1978
Thousand Cu. Meters < 32
Thousand Barrels <200
PIPELINE TERMINALS
Majors & Semi-Majors 19
Independents _6
TOTAL 25
f
% Total 64%
% U.S. 3%
Excludes crude and product
Source: Bureau of Census, 1
Independent Liquid
32-95 95-159 > 159 PERCENT GASOLINE
. PERCENT OF TOTAL TOTAL AS A PERCENT
201-600 601-1000 >1000 TOTAL OF TOTAL TOTAL CAPACITY CAPACITY GASOLINE CAPACITY TOTAL CAPACITY
Thousand Thousand Thousand Thousand
Cu. Meters Barrels Cu. Meters Barrels
10 2 - 31 79% 987 6,210 86% 612 3,850 62%
2 .... 8 21% 164 1,029 14% 62 390 38%
12 2 - 39 100% 1,151. 7,239 100% 674 4,240 59%
31% 5% -- 100%
2% 1% -- 2% 1% 1*
storage at refineries
972 Census of Wholesale Trade; U.S. Army Corps of Engineers, Port Series; National Petroleum News, Factbook (1972-1978);
Terminals Association. 1978 Directory - Bulk Liquid Terminals and Storage Facilities; Industry contacts, Arthur D. Little, inc.
-------
BULK TERMINALS AND STORAGE CAPACITY IN PADD V - 1978
1
Thousand Cu. Meters
Thousand Barrels
MARINE TERMINALS
Majors & Semi -Majors
Independents
PIPELINE TERMINALS
Majors & Semi -Majors
Independents
TOTAL
% Total
% U.S.
Excludes crude and
< 32
<200
84
35
11
20
150
57%
18%
product
Source: Bureau of Census; 1
Independent Liquid
32-95
201-600
26
14
8
21
69
26%
13%
storage at
972 Census
KAMlit Ur ilUKHbt iHrHlM
95-159 >159
601-1000 >1000
12 11
5 6
4
5
26 17
\0% 6%
12% 10%
refineries
of Wholesale Trade; U.S.
Terminal Association, 1978 Directory
i
PERCENT
PERCENT OF TOTAL TOTAL
TOTAL OF TOTAL TOTAL CAPACITY CAPACITY GASOLINE CAPACITY
Thousand Thousand Thousand Thousand
Cu. Meters Barrels Cu. Meters Barrels
133 5U 5,534 34,810 46% 2,103 13,228
60 23% 3,012 18,945 25% 853 5,366
23 9% 1,145 7,202 10% 527 3,313
46 18% 2.297 14,447 19% 1,034 6,501
262 100% 11,988 75,403 100% 4,517 28,408
100%
15% 10% 10%
Armv Coros of Engineers, Port Series; National Petroleum News, Factbook (1972
- Bulk Liquid Terminals and Storage Facilities; Industry contacts; Arthur D.
GASOLINE
AS A PERCENT
TOTAL CAPACITY
38i
28%
46,
45°:.
38%
-1978);
Little, Inc.
-------
TABLE A.7
Cubic Meters <151
Thousand Gallons <40
Majors & Semi -Majors 350
Independent
Marketer/Wholesalers 70
Jobbers 1,960
> TOTAL 2,380
oo
% Total 13%
BULK PLANTS AND STORAGE CAPACITY - U.S. TOTAL - 1978
RANfir nr iTfiUAfiF rAPAritv
152-568 569-1136 >1136 PERCENT
PERCENT OF TOTAL TOTAL
41-150 151-300 >300 TOTAL OF TOTAL TOTAL CAPACITY CAPACITY GASOLINE CAPACITY
Thousand Thousand Thousand Thousand
Cu. Meters Gallons Cu. Meters Gallons
3,330 260 170 ,4,110 22% 1,901 502,250 28% 1,097 289,920
620 60 20 770 4% 279 73,650 4% 176 46,540
10,850 860 90 13,760 74% 4,577 1,209,200 68% 2,748 725,920
14,800 1,180 280 18,640 100% 6,757 1,785,100 100% 4,021 1,062,380
79% 6% 2% 100%
GASOLINE
AS A PERCENT
TOTAL CAPACITY
58%
63%
60%
59%
Source: Bureau of Census; 1972 Census of Wholesale Trade; National 011 Jobbers Council; National Petroleum News, Factbook (1972-1978);
Industry contacts; Arthur 0. Little, Inc.
-------
TABLE A.8
BULK PLANTS AND STORAGE CAPACITY - PADD I - 1978
Cubic Meters <151
Thousand Gallons < 40
Majors & Semi -Majors 20
Independent
Marketer/Wholesalers 20
Jobbers 380
TOTAL 420
% Total 12%
% U.S. 18%
Source: Bureau of Census, 1972
r
152-568
41-150
450
170
2.020
2,640
75%
18%
Census of
mnuL ur 3 1 urv\ut
569-1136
151-300
50
20
320
390
11%
33%
Wholesale Trade
unrni
-------
TABLE A.9
BULK PLANTS AND STORAGE CAPACITY - PAOD II - 1978
Cubic Meters <151
Thousand Gallons < 40
Majors & Semi -Majors 130
Independent
Marketer/Wholesalers 30
Jobbers 860
TOTAL 1 ,020
X Total 11%
X U.S. 43%
Source: Bureau of Census; 1972
152-568
41-150
1,310
340
5.870
7,520
85%
51%
Census of
nnnuc wr Jiunnu
569-1136
151-300
90
40
120
250
3%
21%
Wholesale Trade
>1136 PERCENT
PERCENT OF TOTAL TOTAL
>300 TOTAL OF TOTAL TOTAL CAPACITY CAPACITY GASOLINE CAPACITY
Thousand Thousand Thousand Thousand
Cu. Meters Gallons Cu. Meters Gallons
30 1,560 17X 533 140,720 20X 292 77,240
10 420 5% 149 39,250 5% 89 23,550
20 6,870 78X 2,009 530,700 75% 1,140 301,040
60 8,850 100% 2.691 710,670 100% 1,521 401,830
1% 100X
21% 47% 40% 38%
; National 011 Jobbers Council; National Petroleum News, Factbook (1972-1978);
GASOLINE
AS A PERCENT
TOTAL CAPACITY
55%
60%
56%
57%
Industry contacts; Arthur D. Little, Inc.
-------
TABLE A.10
BULK PLANTS AND STORAGE CAPACITY - PADD III - 1978
Cubic Meters
Thousand Gallons
Majors & Semi-Majors 110
Independent
Marketer/Wholesalers
Jobbers
TOTAL
% Total
% U.S.
ivuiuc. ur aiuKMUL iMrMiiii
<151 152-568 569-1136 >1136 PERCENT
.PERCENT OF TOTAL TOTAL
< 40 41-150 151-300 >300 TOTAL OF TOTAL TOTAL CAPACITY CAPACITY GASOLINE CAPACITY
Thousand Thousand Thousand Thousand
Cu. Meters Gallons Cu. Meters Gallons
110 690 40 20 860 26% 321 84,890 33% 243 64,090
10 50 - - 60 2% 16 4,350 2% 12 3,280
540 1,630 230 -- 2,400 72% 621 164,140 65% 454 119,820
660 2,370 270 20 3,320 100% 958 253,380 100% 709 187,190
20* 71% 8% 10% 100%
28% 16% 22% 7% 18% 14% 18%
js, 1972 Census of Wholesale Trade; National Oil Jobbers Council; National Petroleum News, Factbook (1972-1978);
GASOLINE
AS A PERCENT
TOTAL CAPACITY
75%
75%
73%
74%
Industry contacts; Arthur 0. Little, Inc.
-------
TABLE A.11
BULK PLANTS AND STORAGE CAPACITY - PADD IV - 1978
Cubic Meters
Thousand Gallons
Majors & Semi-Majors 30
Independent
Marketer/Wholesalers
Jobbers
TOTAL
% Total
% U.S.
<151 152-568
< 40 41-150
30 260
20
80 560
110 840
IIS 85*
4i 5i
is, 1972 Census of
n/tnuc. ur oiunnui
569-1136
151-300
20
--
li
30
3%
3%
Wholesale Trade
>1136
>300 TOTAL
10
10
320
20
650
990
1% 100*
5%
PERCENT
OF TOTAL
32%
2%
66%
100%
TOTAL CAPACITY
ThousandThousand
Cu. Meters 6*1Ions
141 37,190
1,700
176 46,600
323 85,490
PERCENT
OF TOTAL
CAPACITY
44%
2%
54%
100%
TOTAL
GASOLINE CAPACITY
ThousandThousand
Cu. Meters Gallons
100
116
221
26,430
1,300
30,760
58,490
GASOLINE
AS A PERCENT
TOTAL CAPACITY
71%
75%
66%
68"
Source: Bureau of Census, 1972 Census of Wholesale Trade; National Oil Jobbers Council; National Petroleum News, Factbook (1972-1978);
Industry contracts; Arthur D. Little, Inc.
-------
TABLE ft.12
BULK PLANTS AND STORAGE CAPACITY - PADD V - 1978
Cubic Meters
Thousand Gallons
Majors & Semi -Majors
Independent
Marketer/Wholesal ers
Jobbers
> TOTAL f
U)
X Total
% U.S.
<15T
< 40
60
10
100
170
9%
7%
Source: Bureau of Census, 1972
152-568
41-150
620
40
770
1,430
73%
10%
Census of
nnnut ur j i urvnui
569-1136
151-300
60
--
180
240
12%
21%
Wholesale Trade
- \«nrnu 1 1 1
>1136
>300
80
50 1
130 1
6%
47%
; National
PERCENT
PERCENT OF TOTAL TOTAL
TOTAL OF TOTAL TOTAL CAPACITY CAPACITY GASOLINE CAPACITY
Thousand thousand Thousand Thousand
Cu. Meters Gallons Cu. Meters Gallons
820 42% 608 160,560 53% 275 72,710
50 3% 16 4,350 2% 10 2,610
,100 55% 520 137,360 45% 338 89,280
,970 100% 1,144 302,270 100% 623 164,600
100%
11% 17% 15%
Oil Jobbers Council; National Petroleum News, Factbook (1972-1978);
GASOLINE
AS A PERCENT
TOTAL CAPACITY
45%
60%
65%
54%
Industry contacts; Arthur D. Little, Inc.
-------
APPENDIX B
LIST OF MAJOR AND SEMI-MAJOR OIL COMPANIES
B.I
-------
TABLE B.I
MAJORS AND SEMI MAJORS1
MAJORS
Amoco Oil Co.
Atlantic Richfield Co.
Chevron U.S.A., Inc.
Exxon Co., U.S.A.
Gulf Oil Co.
Mobil Oil Corp.
Shell Oil Co.
Texaco, Inc.
SEMI-MAJORS
Amerada Hess Corp.
Ashland Oil Co.
Cities Service Oil Co.
Continental Oil Co.
Diamond Shamrock Oil & Gas Co.
Getty, Refining & Marketing Co.
Kerr-McGee Corp.
Marathon Oil Co.
Murphy Oil Corp.
Phillips Petroleum Co.
Standard Oil Co. (Ohio)
Sunmark Industries
Tenneco Oil Co.
Union Oil Co. of California
Largest 22 gasoline marketers based on total company assets in 1977.
Source: National Petroleum News Factbook
B.2
-------
APPENDIX C
OPERATIONAL AND FINANCIAL PRO FORMAS OF
PROTOTYPICAL BULK STORAGE FACILITIES
C.I
-------
TABLE C.I
LARGE MARINE TERMINAL PROTOTYPE
OPERATIONS
Storage
(Thousand Barrels)
Annual Tank Turnovers
Annual Throughput
(Million Gallons)
Daily Throughput
(Thousand Gallons)
PRODUCT GROUP-
Gasoline Distillate
217
20
182.5
500
424
9
160.2
439
Total
641
13
342.7
939
FACILITIES
No. of Tanks
Land (Acres)
No. of Employees
Method of Receipt
- 10
- 25
- 21
- Marine Tanker (35,000 DWT)
Source: Arthur D. Little, Inc.
C.Z
-------
TABLE C.2
ESTIMATED INVESTMENT PROFILE OF
LARGE MARINE TERMINAL PROTOTYPE
(Thousands of Dollars)
INVESTMENT
A. Depreciable Fixed Assets
Tanks
Building
Dock
Meters, Piping, Pumps
Loading Racks, etc.
Miscellaneous Equipment
Total Depreciable Assets
B. Other Fixed Assets
Land
Engineering
Capitalized Interest
C. Working Capital**
TOTAL INVESTMENT
4,171.5
GROSS NET
INVESTMENT INVESTMENT* NET COST
(S/Shell Barrel)
1.50
1,921.5
35.0
650.0
200.0
1,000.0
365.0
960.8
17.0
100.0
175.0
940.0
183.6
2,376.4
760.0
350.0
400.0
1,510.0
40.0
3,926.4
3.71
2.36
.06
6.13
*Book value of 10 year old facility.
**Excluding inventory allocated to class of trade sales profit centers.
Source: Arthur D. Little, Inc.
C.3
-------
TABLE C.3
ESTIMATED OPERATING EXPENSES OF
LARGE MARINE TERMINAL PROTOTYPE
(Thousands of Dollars)
LABOR
Straight Time
15 men X 52 X $320/wk
($8.00/hr)
3 Supervisors
Plant Manager
Plant Secretary/Clerk
a) Straight Time (S&W)
b) Overtime
15 men X 47 X $48/wk
(4 hr
-------
TABLE C.4
REQUIRED TARIFF (PRE-VAPOR CONTROL)
OF LARGE MARINE TERMINAL PROTOTYPE
Total Investment
x Annual Capital Recovery Factor
(20% BFIT, 20 Years)
Net Investment
(Thousand Dollars)
3926.4
.2054
806.5
Operating Expenses
Capital Recovery
Total
Annual Cost
(Thousand Dollars)
987.2
806.5
1,793.7
Required Tariff
($/Annual Throughput
Gallon)
.00288
.00235
.00523
Source: Arthur D. Little, Inc.
C.5
-------
TABLE C.5
SMALL MARINE TERMINAL PROTOTYPE
OPERATIONS
Storage
(Thousand Barrels)
Annual Tank Turnovers
Annual Throughput
(Million Gallons)
Daily Throughput
(Thousand Gallons)
Gasoline
150
15
91.3
250
-PRODUCT GROUP-
Distillate
124
7
36.5
100
Total
274
10
127.8
350
FACILITIES
No. of Tanks
Land (Acres)
No. of Employees
Method of Receipt
- 8
- 20
- 13
- Marine Tanker (20-35,000 DWT)
Source: Arthur D. Little, Inc.
C.6
-------
TABLE C.6
ESTIMATED INVESTMENT PROFILE OF
SMALL MARINE TERMINAL PROTOTYPE
(Thousands
INVESTMENT
A.
Depreciable Fixed Assets
Tanks
Building
Dock
Meters, Piping, Pumps
Loading Racks, etc.
Miscellaneous Equipment
Total Depreciable Assets
of Dollars)
GROSS
INVESTMENT
904.0
10.0
450.0
100.0
400.0
200.0
2,064.0
NET
INVESTMENT*
452.1
5.5
70.0
90.0
375.0
100.0
1,092.6
B. Other Fixed Assets
Land
Engineering
Capitalized Interest
C. Working Capital**
TOTAL INVESTMENT
500.0
164.0
170.0
834.0
25.0
1,951.6
NET COST
($/Shell Barrel)
1.65
3.99
3.04
0.09
7.12
*Book value of 10 year old facility
**Excluding inventory allocated to class of trade sales profit centers
Source: Arthur D. Little, Inc.
C.7
-------
TABLE C.7
ESTIMATED OPERATING EXPENSES OF
SMALL MARINE TERMINAL PROTOTYPE
(Thousands
LABOR
a)
b)
c)
d)
d)
Straight Time
10 men X 52 X $320/wk
($8.00/hr)
1 Supervisor
Plant Manager
Plant Secretary/Clerk
Straight Time (S&W)
Overtime
10 men X 47 X $48/wk
(4 hr @ $12.00/hr)
Benefits (25% of a)
PICA (6.13% of a+b)
Employee Expenses
Total Labor Expense
1 . Total Labor Expense
2. Miscellaneous Services
3. Maintenance & Repairs
4. Utilities & Misc.
Operating Expenses
5. Local Taxes
6. Insurance/Mi sc. Fixed Costs
Total Expenses
of Dollars)
ANNUAL
EXPENSE
166.4
20.0
30.0
12.0
207.6
22.6
51.9
15.0
11.7
308.8
308.8
4.2
20.5
24.2
80.0
65.2
502.9
S/ANNUAL
THROUGHPUT
GALLON
.00242
.00003
.00016
.00019
.00063
.00051
.00394
PERCENT OF
TOTAL
EXPENSES
61%
1%
4%
5%
16%
13%
100%
Source: Arthur D. Little, Inc.
C.8
-------
TABLE C.8
REQUIRED TARIFF (PRE-VAPOR CONTROL)
OF SMALL MARINE TERMINAL PROTOTYPE
Net Investment
(Thousand Dollars)
Total Investment 1,951.6
x Annual Capital Recovery Factor
(20% BFIT, 20 Years) .2054
400.9
Annual Cost Required Tariff
(Thousand Dollars) ($/Annual Throughput
Gallon)
Operating Expenses 502.9 .00394
Capital Recovery 400.9 .00314
Total 903.8 .00708
Source: Arthur D. Little, Inc.
C.9
-------
TABLE C.9
LARGE PIPELINE TERMINAL PROTOTYPE
OPERATIONS
Storage
(Thousand Barrels)
Annual Tank Turnovers
Annual Throughput
(Mil-lion Gallons)
Daily Throughput
(Thousand Gallons)
PRODUCT GROUP-
Gasoline Distillate
Total
145
30
182.5
500
141
20
118.6
325
286
23
301.1
750
FACILITIES
No. of Tanks
Land (Acres)
No. of Employees -
Method of Receipt -
8
15
16
Colonial Pipeline
Source: Arthur D. Little, Inc.
C.lff
-------
TABLE C.10
ESTIMATED INVESTMENT PROFILE OF
LARGE PIPELINE TERMINAL PROTOTYPE
(Thousands of Dollars)
INVESTMENT
A.
B.
C.
Depreciable Fixed Assets
Tanks
Building
Meters, Piping, Pumps
Loading Racks, etc.
Miscellaneous Equipment
Total Depreciable Assets
Other Fixed Assets
Land
Engineering
.Capitalized Interest
Working Capital**
GROSS NET
INVESTMENT INVESTMENT* NET COST
; ($/Shell Barrel)
858.0 429.0 1.50
30.0 16.0
175.0 153.1
1,000.0 940.0
300.0 150.0
2,363.0 1,688.1 5.90
275.0
250.0
225.0
750.0 2.62
35.0 0.12
TOTAL INVESTMENT
2,473.1
8.64
*Book value of 10 year old facility
**Excluding inventory allocated to class of trade sales profit centers
Source: Arthur D. Little, Inc.
C.ll
-------
TABLE C.11
ESTIMATED OPERATING EXPENSES OF
LARGE PIPELINE TERMINAL PROTOTYPE
(Thousands of
LABOR
a)
b)
c)
d)
e)
Straight Time
12 men X 52 X $280/wk
($7.00/hr)
2 Supervisors
Plant Manager
Plant Secretary/Clerk
Straight Time (S&W)
Overtime
12 men X 47 X $42/wk
(4 hr 9 $10.50/hr)
Benefits (25% of a)
PICA (6.13% of a+b)
Employee Expenses
Total Labor Expense
1 . Total Labor Expense
2. Miscellaneous Services
3. Maintenance & Repairs
4. Utilities & Misc.
Operating Expenses
5. Local Taxes
6. Insurance/Mi sc. Fixed Costs
Dol 1 ars )
$/ANNUAL PERCENT OF
ANNUAL THROUGHPUT TOTAL
EXPENSE GALLON EXPENSES
174.7
40.0
30.0
12.0
236.7
23.7
59.2
16.8
14.1
350.5
350.5 .00117 49%
9.8 .00003 1%
32.9 .00011 4%
57.1 .00019 8%
133.0 .00044 18%
149.0 .00049 20%
Total Expenses
Source: Arthur D. Little, Inc.
732.3
.00243
100%
C.12
-------
TABLE C.I2
REQUIRED TARIFF (PRE-VAPOR CONTROL)
OF LARGE PIPELINE TERMINAL PROTOTYPE
Net Investment
(Thousand Dollars)
Total Investment 2,473.1
x Annual Capital Recovery Factor
(20% BFIT, 20 Years) .2054
508.0
Annual Cost Required Tariff
(Thousand Dollars) ($/Annual Throughput
Gallon)
Operating Expenses 732.3 .00243
Capital Recovery 508.0 .00169
Total 1,240.3 .00412
Source: Arthur D. Little, Inc.
C.13
-------
TABLE C.I3
SMALL PIPELINE TERMINAL PROTOTYPE
OPERATIONS
Storage
(Thousand Barrels)
Annual Tank Turnovers
Annual Throughput
(Million Gallons)
Daily Throughput
(Thousand Gallons)
Gasoline
72.5
30
91.3
250
TKUUUUI unuui
Distillate
56.5
20
47.5
130
Total
129
25
138.8
380
FACILITIES
No. of Tanks
Land (Acres)
No. of Employees -
Method of Receipt -
6
10
11
Colonial Pipeline
Source: Arthur D. Little, Inc.
C.l*
-------
TABLE C.I4
ESTIMATED INVESTMENT PROFILE OF
SMALL PIPELINE TERMINAL PROTOTYPE
(Thousands of Dollars)
INVESTMENT
A.
B.
C.
Depreciable Fixed Assets
Tank
Building
Meters, Piping, Pumps
Loading Racks, etc.
Miscellaneous Equipment
Total Depreciable Assets
Other Fixed Assets
Land
Engineering
Capitalized Interest
Working Capital**
TOTAL INVESTMENT
GROSS NET
INVESTMENT INVESTMENT* NET COST
($/ Shell Barrel)
444.7 222.4 1.72
7.0 3.4
40.2 35.2
364.5 342.6
73.5 37.0
929.9 640.6 4.97
182.4
94.3
107.8
384.5 2.98
16.0 .12
989.9 8.07
*Book value of 10 year old facility
**Excluding inventory allocated to class of trade sales profit centers,
Source: Arthur D. Little, Inc.
C.15
-------
TABLE C.I5
LABOR
Straight Time
8 men X 52 X $280/wk
($7.00/hr)
1 Supervisor
Plant Manager
Plant Secretary/Clerk
a) Straight Time (S&W)
b) Overtime
8 men X 47 X $42/wk
(4 hr @ $10.50/hr)
c) Benefits (25% of a)
d) PICA (6.13% of a+b)
e) Employee Expenses
Total Labor Expense
1. Total Labi
2. Miscellant
3. Maintenam
4. Utilities
5.
6.
Local Taxes
Insurance/M
Total Expenses
ESTIMATED OPERATING EXPENSES OF
SMALL PIPELINE TERMINAL PROTOTYPE
(Thousands
50/wk
'Clerk
;&w)
!/wk
T)
:a)
i+b)
IS
inse
Expense
is Services
& Repairs
Misc.
:penses
sc. Fixed Costs
of Dollars)
ANNUAL
EXPENSE
116.5
20.0
30.0
12.0
178.5
15.8
44.6
11.5
9.4
250.4
250.4
4.5
11.4
26.3
60.0
70.9
S/ANNUAL PERCENT OF
THROUGHPUT TOTAL
GALLON EXPENSE
.00182 59%
.00003 1%
.00008 3%
.00019 6%
.00043 14%
.00052 17%
423.5
.00305
100%
Source: Arthur D. Little, Inc.
C.16
-------
TABLE C.I6
REQUIRED TARIFF (PRE-VAPOR CONTROL)
OF SMALL PIPELINE TERMINAL PROTOTYPE
Net Investment
(Thousand Dollars)
Total Investment 989.9
x Annual Capital Recovery Factor
(20% BFIT, 20 Years) . .2054
203.3
Annual Cost Required Tariff
(Thousand Dollars) ($/Annual Throughput
Gallon)
Operating Expenses 423.5 .00305
Capital Recovery 203.3 .00146
Total 627.8 .00451
Source: Arthur D. Little, Inc.
C.17
-------
TABLE C.I7
LARGE BULK PLANT PROTOTYPE
OPERATIONS
PRODUCT GROUP-
Gasoline Distillate Total
Storage
(Thousand Gallons) 183 182 365
Annual Tank Turnovers 40 20 30
Annual Throughput
(Thousand Gallons) 7,300 3,650 10,950
Daily Throughput
(Thousand Gallons) 20 10 30
FACILITIES
No. of Tanks - 4
Land (Acres) - 5
No. of Bulk Plant Employees - 4
Method of Receipt - Tank transport from a primary terminal
Source: Arthur D. Little, Inc.
C.181
-------
TABLE C.I8
ESTIMATED INVESTMENT PROFILE OF
LARGE BULK PLANT PROTOTYPE
(Thousands of Dollars)
GROSS
INVESTMENT (Bulk Plant Only) INVESTMENT
NET
INVESTMENT*
NET COST
($/Shell Gallon)
A.
B.
C.
Depreciable Fixed Assets
Tanks
Building
Meters, Piping, Pumps
Loading Racks, Tankwagons (4)
Miscellaneous Equipment
Total Depreciable Assets
Other Fixed Assets
Land
Working Capital**
TOTAL INVESTMENT
48.0
20.0
26.0
79.0
18.0
214.0
234.0
31.0
12.0
16.0
51.0
13.0
123.0
10.0
10.0
143.0
0.08
0.34
0.13
0.03
0.50
*Book value of 25 year old facility
**Bulk plant operations only. Excludes inventory allocated to class of trade
profit centers.
Source: Arthur D. Little, Inc.
C.19
-------
TABLE C.I9
ESTIMATED OPERATING EXPENSES OF
LARGE BULK PLANT PROTOTYPE
(Thousands of Dollars)
LABOR
a) Straight Time
4 men X 52 X $260/wk
($6.50/hr)
b) Overtime
4 men X 47 wks X $39/wk
(4 hr 0 $9.75/hr)
c) Benefits (20% of a)
d) PICA (6.13% of a+b)
e) Employee Expenses
Total Labor Expense
ANNUAL
EXPENSE
54.1
7.3
10.8
3.8
2.0
78.0
$/ANNUAL
THROUGHPUT
GALLON
PERCENT OF
TOTAL
EXPENSE
1. Total Labor Expense
2. Maintenance & Repairs
3. Utilities & Misc. Operating
Expenses & Services
4. Local Taxes
5. Insurance/Misc. Fixed Costs
Total Expenses
78.0
10.1
17.5
31.9
25.0
162.5
0.00714
0.00092
0.00160
0.00291
0.00228
0.01486
48%
6%
11%
20%
15%
100%
Source: Arthur D. Little, Inc.
C.20
-------
TABLE C.20
REQUIRED TARIFF (PRE-VAPOR CONTROL)
OF LARGE BULK PLANT PROTOTYPE
Net Investment
(Thousand Dollars)
Total Investment 143.0
x Annual Capital Recovery Factor
(20% BFIT, 20 Years) .2054
29.4
Annual Cost Required Tariff
(Thousand Dollars) ($/Annual Throughput
Gallon)
Operating Expenses 162.5 0.01486
Capital Recovery 29.4 0.00268
Total 191.9 0.01754
Source: Arthur D. Little, Inc.
C.21
-------
TABLE C.21
SMALL BULK PLANT PROTOTYPE
OPERATIONS
PRODUCT GROUP-
Gasoline Distillate Total
Storage
(Thousand Gallons) 45 30 75
Annual Tank Turnovers 32 20 27
Annual Throughput
(Thousand Gallons) 1,460 600 2,060
Daily Throughput
(Thousand Gallons) 4.0 1.6 5.6
FACILITIES
No. of Tanks - 4
Land (Acres) - 5
No. of Bulk Plant Employees - 2
Method of Receipt - Tank transport from a primary terminal
Source: Arthur D. Little, Inc.
C.22
-------
TABLE C.22
ESTIMATED INVESTMENT PROFILE OF
SMALL BULK PLANT PROTOTYPE
(Thousands of Dollars)
INVESTMENT (Bulk Plant Only)
A.
Depreciable Fixed Assets
Tanks
Building
Meters, Piping, Pumps
Loading Racks, Tankwagons (2)
Miscellaneous Equipment
Total Depreciable Assets
B. Other Fixed Assets
Land
C. Working Capital
**
GROSS NET
INVESTMENT INVESTMENT*
71
NET COST
14
14
7
30
5
9
8
4
22
3
TOTAL INVESTMENT
83
45
10
2
57
($/Shell Gallon)
0.12
0.60
0.13
0.03
0.76
*Book value of 25 year old facility
**Bulk plant operations only. Excludes inventory allocated to class of trade
profit centers.
Source: Arthur D. Little, Inc.
C.23
-------
TABLE C.23
ESTIMATED OPERATING EXPENSES OF
SMALL BULK PLANT PROTOTYPE
(Thousands of Dollars)
LABOR
a) Straight Time
2 men X 52 X $260/wk
($6.50/hr)
b) Overtime
2 men X 47 wks X $39/wk
(4 hrs 0 $9.75/hr)
c) Benefits (20% of a)
d) PICA (6.13% of a+b)
e) Employee Expenses
Total Labor Expense
1. Total Labor Expense
2. Maintenance & Repairs
3. Utilities & Misc. Operating
Expenses & Services
4. Local Taxes
5. Insurance/Misc. Fixed Costs
Total Expenses
ANNUAL
EXPENSE
27.0
3.7
5.4
1.9
1.0
39.0
$/ANNUAL
THROUGHPUT
GALLON
PERCENT OF
TOTAL
EXPENSE
39.0
1.9
3.3
6.0
4.7
54.9
0.01898
0.00092
0.00160
0.00291
0.00228
0.02670
71%
3%
6%
11%
9%
100%
Source: Arthur D. Little, Inc.
C.24
-------
TABLE C.24
REQUIRED TARIFF (PRE-VAPOR CONTROL)
OF SMALL BULK PLANT PROTOTYPE
Net Investment
(Thousand Dollars)
Total Investment 57.0
x Annual Capital Recovery Factor
(20% BFIT, 20 Years) .2054
11.7
Annual Cost Required Tariff
(Thousand Dollars) ($/Annual Throughput
Gallons)
Operating Expenses 54.9 0.02670
Capital Recovery 11.7 0.00568
Total 66.6 0.03238
Source: Arthur D. Little, Inc.
C.25
-------
APPENDIX D
VAPOR CONTROL COSTS PROVIDED BY EPA
D.I
-------
TABLE D.I
MODEL TERMINAL PARAMETERS
Average Daily Loading Rate:
m3/day
gallons/day
DESIGN FACTORS
(a)
(b
a) Number of rack positions
,b) Number of loading arms per position
(c) Method of loading
(d) Pumps (each)
(e) Tank truck capacities
(f) Tank truck loading time (total)
(g) Peak hour loading
(e) * (f) x 60 x (a)
(h) Maximum instantaneous loading
(a) x (b) x (d)
EMISSION FACTORS
Uncontrolled:
Total hydrocarbon
Benzene
Controlled3:
Total hydrocarbon
Benzene (95% reduction)
TERMINAL OPERATING SCHEDULE
950
250,000
2
3
Submerged (top or
bottom)
1.9 m3/min
(500 gpm)
30 m3
(8,000 gallons)
20 minutes/truck
180 m3/hr
(48.000 gph)
11 nr/min
(3,000 gpm)
960 mg/liter
8 mg/liter
80 mg/liter
0.4 mg/liter
1,900
500,000
4
3
Submerged (top or bottom)
1.9 m3/min (500 gpm)
30 m3 (8,000 gallons)
20 minutes/truck
360 m3/hr (96,000 gph)
22 m3/min (6,000 gpm)
960 mg/liter
8 mg/liter
80 mg/Inter
0.4 mg/liter
300 days/year)
300 days/year
aAssumes 100 percent vapor collection ar rack during loading and no losses in vapor collection system
Source: U.S. Environmental Protection Agency
-------
TABLE D.2
COST FACTORS USED IN DEVELOPING
ANNUALIZED COST ESTIMATES FOR MODEL TERMINALS
Utilities:
- Electricity
- Propane
Operating Labor
Maintenance (percent of equipment cost)
- Refrigeration (RF) Vapor Recovery
- Compression-Refrigeration-Absorption
(CRA) Vapor Recovery
- Adsorption-Absorption (AA) Vapor
Recovery
- Oxidizer (OX)
Capital Charges (percent of capital cost):
- Interest and depreciation, plus
- Property taxes, insurance and
administrative overhead
Gasoline Value (recovered) FOB
Terminal Before Tax:
Carbon for AA unit (replacement cost)
$.017/106 joules (S.Oe/Kw-hr)1
$.10/1 Her ($.40/gal Ion)
$10/man-hour
6 percent
2
4 percent
3
4 percent (carbon replacement
is additional)
4 percent
16 percent
4 percent
$.10/liter ($.40/gallon)!
$21/Kg ($.90/lb)
Industry data reported to EPA
2
Based upon actual maintenance costs reported to EPA
Assumed to be comparable to CRA
4
Calculated using capital recovery factor formula assuming 10 year equipment
life and 10 percent interest rate.
50il Daily - March 1978.
Source: U.S. Environmental Protection Agency
D.3
-------
TABLE D.3
o j
ESTIMATED CONTROL COSTS FOR MODEL EXISTING TERMINALS
SINGLE VAPOR CONTROL SYSTEM ALTERNATIVES
(Thousands of January 1978 Dollars)
Gasoline Loaded:
Vapor Control System:
investment
Purchase Cost (FOB factory)*
Total Installed Cost
Annual izt'd Cost(credit)
Electricity0
Propane(pilot)
Maintenance
Operating labor6
Carbon Replacement
Subtotal (Direct operating costs)
Capital Charges
Gasoline Recovery(credit)^
Net Annual izod Cost(credit)
950 m3/day
1250,000 gallons/day)
AA
120
240
3.9
4.8
1.5
2.4
12.6
48.0
(39.2)
21.4
CRA
128b
256
5.1
' 6.)
1.5
11.7
51.2
(39.2)
23.7
OX
72
144
2.9
1.0
2.9
1.5
8.3
28.8
«*.
37.1
RF
102
204
9.9
6.1
1.5
17.5
40.0
(39.2)
19.1
AA
155
310
7.8
6.2
1.5
4.7
20.2
62.0
(78.4)
3.U
1900 m3/day
(500,000 gallons/day)
CRA
I64b
328
8.3
6.6
1.5
16.4
65.6
(78.4)
3.6
OX
95
190
5.8
1.0
3.8
1.5
12.1
30.0
__
50.1
RF
153
306
19.8
9.2
1.5
30.5
61.2
(78.4)
13.3
Vendor quotes
Includes vapor holder
All systems except CRA calculated at 12 hours/day of vendor estimated nominal Kw draw - CRA hours based upon design flow rate.
Estimated jt ./J gal/hour operation
£
Inspections at .5 man-hr/day.
Estimated based upon three year carbon life
Calculated jt 16°C (60°F) and 100K vapor collection at rack.
Source: I1. S. Environmental Protection Agency
-------
TABLE D.4
ESTIMATED CONTROL COSTS FOR MODEL EXISTIf
STAND-BY CONTROL SYSTEM ALTERNATIVE
Gasoline Loaded:
Total Installed Capital Cost
Direct Operating Costs
Utilities
Maintenance and Labor and materials
Capital Charges
Gasoline (credit)
Net Annual Ized Cost(credit)
(Thousands
of January
1978 Dollc
950 ni3/day
(250,000 yal Ions/day)
Stand-by System
Only (OX)a
95
Footnote b
2.9
19.0
-
21.9
Primary/Stand-by System
(Rf/OX)
299
9.9
10.5
59.3
(37.2)c
43
(OX/OX)
239
3.9
7.3
47. 0
-
b'J.O
«3 TERMINALS
:s
irsl
1900
(bOO.OOO
Stand-by System
Only (OX)a
126
Footnote b
3.8
25.2
.-
29.0
m /day
gallons/day)
Primavj/Stand-Lu' System
(A/VOX) (OX/OX)
436 316
17.8 b.ti
16.2 D.I
U7.2 63.2
(74.5)c
36.7 79.1
aStand-by system costs are shown separately for those terminals that have already installed vapor controls to comply with existing SIP
requirements for hydrocarbons.
These will vary but should not significantly effect net operating costs of the primary/stand-by combination.
GKecovery reductions will vary but are estimated at 5 percent or 15 days down time on primary system.
Source: U.S. Environmental Protection Agency
-------
TABLE D.5
MODEL BULK PLANT PARAMETERS
Small Model
cr>
1. Throughput, (liters/day)
2. Loading Racks
3. Loading Arms per Rack
4. Storage Tanks (above-ground)
5. Account Trucks (Tank Wagons)
6. Account Trucks Converted to Vapor Control
7. Compartments per Account Truck
8. Density of Gasoline (Ib/gallon)
9. Emissions of HC.Prevented (mg/liter)
Option 1
Option 3
Option 4
10. Working Days per Year
11. Working Hours per Day
12. Peak Loading Rate (liters per minute)
13. Liquid to Vapor Ratio
?14. Operating Labor Cost ($/hour)
15. Propane for Oxidizer (gallons/hour)
16. Price of Propane ($/gallon)
17. Price of Electricity ($/KWH)
18. Capital Recovery Factors (interest)
a. Vapor Balance Equipment at 20-year life,
10% interest
b. Refrigeration or oxidation equipment at
10-year life, 10% interest
c. Taxes, insurance, administration on
capital (all equipment)
15,000 (4,000 gallons/day)
1
3
3
2
1
4
Large Model
76,000 (20,000 gallons/day)
1
3
3
4
2
4
800
1260
3429
286
8
490 (130 gallons/minute)
7.5
10.0
0.72
0.40
0.05
0.118
0.163
0.04
800
1260
3429
286
8
490 (130 gallons/minute)
7.5
10.0
0.72
0.40
0.05
0.118
0.163
0.04
Source: U.S. Environmental Protection Agency
-------
TABLE D.6
o
1. Truck (Tank Wagon) Conversion, Including
Labor
2. Rack Conversion, including labor
3. Installation, excluding labor
4. TOTAL INSTALLED CAPITAL
5. Operating Labor
6. Utilities
/. Maintenance Labor and Materials
8. Capital Charges
9. TOTAL ANNUAL I ZED COST
10. Less Recovery Credit
11. NET ANNUAL I ZED COST
OPTIONS 1 AND 2 COST ESTIMATES (NOJC COSTS)
(Thousands of January
Option 1
1978 Dollars)
Bottom or' Top-Submerged
Loadimj wild Incoming Vapor Balance
Bottom l.oadina
Top -Submerged
15,000 76,000 15,000 76,000
. ,. _ Ipd Ipd Ipd jpd
luding c ' c *
6.27 12.54
35.45 35.45
5.31 b.82
47.03 53.ol
NONE
NONE
1.41 l.bl
7.41 U.4U
8. 02 10.09
0.51 2.59
8.31 7.50
N/A N/A
3.54 3.54
0.71 0.71
4.25 4.2b
NONE
NONE
0.13 0.13
0.67 0.6/
0.80 0.80
0.51 2.59
0.29 (1.79)
Option 2
Bottom or lop-Submerged Loading UiLh
Incoming and Outgoing Vapor Balance
Uottoni Loading
15,000 76,000
7.02 14.05
35.45 35.45
b.52 6.22
t/.9U 55.72
NONE
NOME
1.43 1.67
/.56 8./6
0.99 10.43
0.81 4.08
8.18 6.35
Top-Submerged
15,000 76,000
lyd Ipd
2.3U 4.76
18.30 18.30
2.36 2.6/
23. U3 *5.7J
NONE
NONE
0.69 0.77
3.63 4. Ob
4.32 4.S?
0.81 4.08
3.51 0.74
Source: U.S. Environmental Protection Agency
-------
TABLE D.7
P.
CO
Recovery Equipment
Processing Equipment
Recovery Installation
Processina installation
TOTAL INSTALLED CAPITAL
Recovery Operating Labor
Processing Operating Labor
Recovery Utilities
Processing Utilities
Recovery Maintenance
Processing Maintenance
Recovery Capital Charges
Processing Capital Charges
TOTAL ANNUAL I ZED COST
Les»s: Processing Recovery Credit
MET ANNUALIZED COST
OPTION 3 COST ESTIMATE (NOJC COSTS)
(thousands
of January 1978 Dollars)
SINGLE
SYSTEMS
Refrlqeratlon
Bottom
15,000
Ipd
42.47
43.22
5.52,
25.93
117.14
NONE
1.43
NONE
2.17
1.43
2.59
7.56
14.02
29.20
2.19
27.01
Loading
76.000
Ipd
49.50
43.22
6.22
25.93
124.'07
NONE
1.43
NONE
2.17
1.67
2.59
U./6
14.02
30.64'
11.11
19. SJ
Top Submerged
15,000
Ipd
20.68
43.22
2.35
25.93
92.18
NONE
1.43
NONE
2.17
0.69
2.59
3.63
14.02
24.63
2.19
22.34
76,000
Ipd
23.06
43.22
2.67
25.93
94.08
NONE
1.43
NONE
2.17
0.77
2.59
4.05"
14.02
25.03
11.11
13.92
Bottom
15,000
Ipd
42.47
15.50
5.52
9.76
73.25
NONE
1.43
NONE
0.16
1.43
0.62
7.56
5.12
16:32
NONE
16.32
Oxidation
Loading
?6,000
Ipd
49.50
15.50
b.22
9.76
80. 9R
NONE
1.43
NONE
0.16
l.b/
0.62
8-76
; 5.12
17.76
NONE
1 7 '. 76
Top
15,000
Submerged
76,000
Ipd
20.68 23.06
lb.50
2.'36
9.76
48:32
NONE
1.43
NONE
0.16
U.b9
0.62
3.63
5.12
^.es
NONE
11.65
15.50
2.67
9./6
60.99
NONE
1.43
NONE
0.16
0.77
0.62
4.05
5.)
-------
TABLE D.7
continued
OPTION 3 COST ESTIMATE (NOJC COSTS
(Thousands of January 1978 Dollars
DUAL SYSTEMS
Refrigeration Plus Oxidation
Oxidation Plus Oxidation
Recovery Equipment
Processing Equipment
Recovery Installation
Processing Installation
TOTAL INSTALLED CAPITAL
Recovery Operating Labor
Processing operating Labor
Recovery Utilities
Processing utilities
Recovery Maintenance
Processing Maintenance
Recovery Capital Charge
Processing Capital Charges
TOTAL ANNUAL IZED COST
Less: Processing Recovery Credit
NET ANNUAL IZED COS I
Bottom Loading
15,000
Ipd
42.47
5U.70
5.52
35.69
142.38
NONE
1.42
NONE
2.17
1.43
2.90
' 7.56
19.54
35.03
2.19
32.84
76,000
Ipd
49.50
58.70
5.52
35,69
149.41
NONE
1.43
NONE
2.17
1.67
2.90
8.76
19.54
36.47
11.11
25.36
Top Submerged
15,000
Ipd
20.68
50.70
2.35
35.69
117.42
NONE
1.43
NONE
2.17
0.69
2.90
3.63
19.54
30.36
2.19
28.17
76,000
Ipd
22.06
58.70
2.67
35.69
120.12
NONE
1.43
NONE
2.17
0.77
2.90
4.05
19.54
30.86
11.11
19.75
Bottom Loading
15,000
Ipd
42.47
31.00
5.52
19.52
9(1.51
NONE
1.43
NONE
0.16
1.43
U.93
7.56
10.24
21.75
NONE
21.75
76,000
Ipd
49.50
31.00
5.52
19.52
105.54
NONE
1.43
NONE
0.16
1.67
0.93
8;76
10.24
23.19
NONE
23.19
Top Submerged
15,000
Ipd
20.68
31.00
2.35
19'. 52
73.55
NONE
1.43
NONE
0.16
0.69
0.93
3.63
10.24
17.08
NONE
17.08
76,000
Ipd
23.06
31.00
2.67
19.52
76.25
NONE
1.43
NONE
0.16
0.77
0.93
4.05
10.24
17.58
NONE
17.58
-------
TABLE D.8
OPTIONS 1 AND 2 COST
ESTIMATES
(Thousands of
(WIGGINS AND HOUSTON-GALVESTON COSTS)
January 1978 Do
Option 1 '
liars)
Bottom or Top-Submerged
Loading with Incoming Vapor Balance
Bottom Loading
15,000 76,000
Ipd Ipd
Truck (tank wagon) conversion, including
labor
Rack conversion. Including labor
Piping rack to storage, Including
labor
Installation, excluding labor
TOTAL INSTALLED CAPITAL
Operating Labor
Utilities
Maintenance Labor and Material
Capital charges
TOFAL ANNUAL IZED COST
Less Recovery Credit
NET ANNUAL 1 ZED COST (credit)
0.97
7.47
1.58
2.29
12.31
NONE
NONE
0.37
1.94
2.31
0.51
1.7.0
1.95
7.47
1.58
2.34
13.34
NONE
NONE
0.40
2.10
2.50
2.59
(0.09)
Top-Submerged
15,000 76,000
Ipd Ipd
N/A
3.54
N/A
0.71
4.25
NONE
NONE
0,13
0.67
0.80
0.51
0.29
N/A
3.54
N/A
0.71
4.25
NONE
NONE
0.13
0.67
0.80
2.59
(1.79)
Option 2
Bottom or Top-Submerged Loading With
Incoming and Outgoing Vapor Balance
Bottom
T5.000
Ipd
1.95
7.47
1.58
2.34
13.34
NONE
NONE
0.40
2.10
2.50
0.81
1.69
Loading
76,000
_.JP.
-------
TABLE D.9
OPTION 3 COST ESTIMATES (WIGGINS AND HOUSTON-GALVESTON COSTS)
(Thousands of January 1978 Dol
Refrigeration
Bottom Loading
15,000 76,000
Ipd Ipd
Recovery Equipment
Processing Equipment
Recovery Installation
Processing Installation
TOTAL INSTALLED CAPITAL
Recovery Operating tabor
Processing Operating Labor
Recovery Utilities
Processing Utilities
Recovery Maintenance
Processing Maintenance
Recovery Capital Charges
Processing Capital Charges
TOTAL ANNUAL I ZED COST
Less: Processing Recovery Credit
NET ANNUAL I ZED COST
11.00
43.22
2.34
25.93
82.49
NONE
1.43
NONE
2.17
0.40
2.59
2.10
14.02
22.71
2.19
20.52
12.95
43.22
2.45
25.93
84.55
NONE
1.43
NONE
2.17
0.46
2.59
2.43
14.02
23.10
11.11
11.99
lars)
Top Submerged
15,000 76,000
Ipd Ipd
8.87
43.22
1.83
25.93
79.85
NONE
1.43
NONE
2.17
0.32
2.59
1.69
14.02
22.22
2,19
20.03
11.04
43.22
1.94
25.93
82.13
NONE
1.43
NONE
2.17
0.39
2.59
2.04
14.02
22.64
11.11
11.53
Oxidation
Bottom Loading
15,000 76,000
]pd Ipd
11.00
15.50
2.34
9.76
38.60
NONE
1.43
NONE
0.16
0.40
0.62
2.10
S.12
9.83
NONE
9.83
12.95
15.50
2.45
9.76
40.66
NONE
1.43
NONE
0.16
0.46
0.62
2.43
S.12
10.22
NONE
10.22
Top Submerged
15,000 76,000
Ipd Ipd
8.87
15.50
1.83
9.76
35.96
NONE
1.43
NONE
0.16
0.32
0.62
1.69
5.12
9.34
NONE
9.34
11.04
15.50
1.94
9.76
38.24
NONE
1.43
NONE
0.16
0.39
0.62
2.04
5.12
9.76
NONE
9.76
-------
ro
Recovery Equipment
Processing Equipment
Recovery Installation
Processing Installation
TOTAL INSTALLED CAPITAL
Recovery Operating Labor
Processing Operating Labor
Recovery Utilities
Processing Utilities
Recovery Maintenance
Processing Maintenance
Recovery Capital Charge
Processing Capital Charges
TOTAL ANNUAL I ZED COST
Less: Processing Recovery Credit
NET ANNUAL I ZED COST
TABLE D.9
continued
OPTION 3 COST ESTIMATES (WIGGINS AND HOUSTON- GAL VESTON COSTS)
(Thousands of January 1973 Dollars)
Refrigeration Plus Oxidation
Bottom Loading
15,000 76,000
Ipd Ipd
4.00
58.70
2^34
35.69
107.73
NONE
1.42
NONE
2.17
0.40
2.90
2.10
19.54
28.53
edit 2.19
26.34
12.95
58.70
2.45
35.69
109.79
NONE
1.43
NONE
2.17
0.46
2.90
2.43
19.54
28.93
11.11
17.82
Top Submerged
15,000 76.000
Ipd Ipd
8.87
58.70
1.83
35.69
105.09
NONE.
1.43
NONE
2.17
0.32
2.90
1.69
19.54
22.05
2.19
25.86
11.04
58.70
1.94
35.69
107.37
NONE
1.43
NONE
2.17
0.39
2.90
2.04
19.54
28.47
11.11
17.36
Oxidation Plus Oxidation
Bottom Loading
15,000 76,000
Ipd Ipd
11.00
31.00
2.34
19.52
63.86
NONE
1.43
NONE
0.16
0.40
0.93
2.10
10.24
15.26
NONE
15.26
12.95
31.00
2.45
19.52
65.92
NONE
1.43
NONE
0.16
0.46
0.93
2.43
10.24
15.65
NONE
15.65
Top Submerged
15,000 76,000
Ipd Ipd
8.87
31.00
1.83
19.52
61.22
NONE
1.43
NONE
0.16
0.32
0.93
1.69
10.24
14.77
NONE
14.77
11.04
31.00
1.94
19.52
63.50
NONE
1.43
NONE
0.16
0.39
0.93
2.04
10.24
15.19
NONE
15.19
-------
TABLE D.10
.
labor"
2. Rack Conversion, including laborc
3. Installation, excluding labor
4. TOTAL INSTALLED CAPITAL
5. Operating Labor
6. Utilities
7. Maintenance Labor and Materials
6. Capital Charges5
9. TOTAL ANNUAL IZED COST
10. Less Recovery Credit
11. NET ANNUALI ZED COST
OPTIONS 1 AND 2 COST ESTIMATES (COLORADO APCD COSTS)
(Thousands of January 1978 Dollars)
Option
1
Bottom or Top-Submerged
Loading with Incoming Vapor Balance
Bottom Loading
15,000 76,000
Ipd Ipd
sion, including 0.97 1.94
Ing laborc 1.08 1.08
labord 0.28 0.41
2.33 3.43
NONE
NONE
iterials 0.07 0.10
0.37 0.54
0.44 0.64
0.51 2,59
(0.07) (1.95)
Top-Submerged
15,000 76,000
Ipd Ipd
0.75 0.75
0.75 0.75
0.20 0.20
1.70 1.70
NONE
NONE
0.05 0.05
0.27 0.27
0.32 0.32
0.51 2.59
(0.19) (2.27)
Option 2
Bottom or Top-Submerged Loading With
Incoming and Outgoing Vapor Balance
Bottom Loading
T5.000 76,000
_l£d_ Ipd
1.61 3.23
1.08 1.08
0.36 0.58
3.05 4.89
NONE
NONE
0.09 0.15
0.48 0.77
0.57 0.92
0.81 4.08
(0.24) (3.16)
Top-Submerged
jpd Ipd
1.69 2.15
1.69 2.15
0.46 0.58
3.84 4.88
NONE
NONE
0.12 0.15
0.60 0.77
0.72 0.92
0.81 4.08
(0.09) (3.16)
-------
TABLE D.n
OPTION 3 COST ESTIMATES (COLORADO APCD COSTS)
(Thousands of January 1978 Dollars)
Oxidation
Recovery Equipment
Processing Equipment
Recovery Installation
Processing Installation
TOTAL INSTALLED CAPITAL
Recovery Operating Labor
Processing Operating Labor
Recovery Utilities
Processing Utilities
Recovery Maintenance
Processing Maintenance
Recovery Capital Charges
Processing Capital Charges
TOTAL ANNUAL I ZED COST
Less: Processing Recovery Credit
NET ANNUAL IZED COST
Bottom Loading
15,000
Ipd
2.69
43.22
0.36 >
25.93
72.20
NONE
1.43
NONE
2.17
0.09
2.59
0.48
14.02
20.78
2.19
18.59
76,000
Ipd
4.31
43.22
0.58
25.93
74.04
NONE
1.43
NONE
2.17
0.15
2.59
0.77
14.02
21.13
11.11
10.02
Top-Submerged
15.000
Ipd
3.38
43.22
0.46
25.93
73.99
NONE
1.43
NONE
2.17
0.12
2.59
0.60
14.02
20.93
2.19
18.74
76.000
Ipd
4.30
43.22
0.58
25.93
74.03
NONE
1.43
NONE
2.17
0.15
2.59
0.77
14.02
21.13
11.11
10.02
Bottom Loading
15.000
Ipd
2.69
15.50
0.36
9.76
28.31
NONE
1.43
NONE
0.16
0.09
0.62
0.48
5.12
7.90
NONE
7.90
76,000
Ipd
4.31
15.50
0.58
9.76
30.15
NONE
1.43
NONE
0.16
0.15
0.62
0.77
5.12
8.25
NONE
8.25
Top Submerged
15,000
IpH
3.38
15.50
0.46
9.76
29.10
NONE
1.43
NONE
0.16
0.12
0.62
0.60
5.12
8.05
NONE
8.05
76,000
IP"
4.30
15.50
0.58
9.76
30.14
NONE
1.43
NONE
0.16
0.15
0.62
0.77
5.12
8.25
NONE
8.25
-------
TABLE D.11
Continued
OPTION 3 COST ESTIMATES (COLORADO APCD COSTS)
(Thousands of January 1978 Dollars)
en
Recovery Equipment
Processing Equipment
Recovery Installation
Processing Installation
TOTAL INSTALLED CAPITAL
Recovery Operating Labor
Processing Operating Labor
Recovery Utilities
Processing Utilities
Recovery Maintenance
Processing Maintenance
Recovery Capital Charge
Processing Capital Charges
TOTAL ANNUAL IZED COST
Less: Processing Recovery Credit
NET.ANNUAL IZED COST
Refrigeration Plus Oxidation
Bottom Loading
15,000
Ipd
2.69
58.70
0.36
35.69
97.68
NONE
1.43
NONE
2.17
0.09
2.90
0.48
19.54
26.61
2.19
24.42
76,000
Ipd
4.31
50.70
0.58
35.69
99.28
NONE
1.43
NONE
2.17
0.15
2.90
0.77
19.54
26.96
11.11
15.85
Top-Submerged
15.000
Ipd
3.38
58.70
0.46
35.69
98.23
NONE
1.43
NONE
2.17
0.12
2.90
0.60
19.54
26.76
2.19
24.57
76,000
Ipd
4,30
58.70
0.58
35.69
99.27
NONE
1.43
NONE
2.17
0.15
2.90
0.77
19.54
26.96
11.11
15.85
Oxidatjon Plus Oxidation
Bottom LoadTng
15,000 76,000
Ipd Ipd
4.31
19^52
55.41
NONE
1.43
NONE
0.16
0.15
0.93
0.77
10.24
13.68
NONE
13.68
Top Submerged
53.57
NONE
1.43
NONE
0.16
0.09
0.93
0.48
10.24
13.33
NONE
13.33
15.000
Ipd
3.38
3A:«
19.52
54.36
NONE
1.43
NONE
0.16
0.12
0.93
0.60
10.24
13.36
NONE
13.36
76,000
Ipd
4.30
19.52
55.40
NONE
1.43
NONE
0.16
0.15
0.93
0.77
10.24
13.58
NONE
1.1.58
-------
APPENDIX E
EXISTING STATE AND LOCAL VAPOR CONTROL
REGULATIONS FOR GASOLINE MARKETING
E.l
-------
TABLE E.I
PO
STATE AND LOCAL REGULATION OF HYDROCARBONS
State
Alabama
Alaska
Arkansas
Arizona
California*
Bay Area
San Diego
South Coast
Colorado
Connecticut
Washington, DC
Delaware
Florida
Terminal
Loading Rack
Submerged Fill
None
None
Submerged Fill
Vapor Recovery 90%
Vapor Recovery
Vapor Recovery
Vapor Collection &
Disposal = 90%
Vapor Collection &
Disposal
Vapor Collection &
Disposal = 90%
None
None
Bulk Plant
Storage
Tank Loading
Submerged Fill
None
None
Submerged Fill
Balance & Submerged
Fill
Submerged Fill/
Balance
Submerged Fill/
Balance
Submerged Fill &
Collection = 1.15 lb/
1000 gal
Submerged Fill
Submerged Fill
& 90% Collection
None
None
Loading Rack
None
None
None
Submerged Fill
Balance & Submerged
Fill
Submerged Fill/
Balance
Submerged Fill/
Balance
Vapor Collection &
Disposal = 90%
<1 0,000 gal /day
exempted
Submerged Fill
& 90% Collection
None
None
Service Stations
Underground Storage Tank
Loading
Submerged Fill
None
None
Submerged Fill
90% Collection
90% Collection
90% Collection
Submerged Fill & Collection
Equivalent to 1.15 lb/1000 gal
Submerged Fill
Submerged Fill & 90% Collection
None
None
* Regulated by Regional Agencies
-------
TABLE E.I (continued)
STATE AND LOCAL REGULATION OF HYDROCARBONS
State
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
m Kentucky
GO
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Terminal
Loading Rack
None
None
None
Submerged Fill
Submerged Fill
None
None
90% Control
Submerged Fill
None
None
None
None
None
None
None
None
Storage
Tank Loading
None
Submerged Fill
None
Submerged Fill
Submerged Fill
None
None
Submerged Fill
Submerged Fill
None
None
None
None
Submerged Fill
None
None
None
Bulk Plant
Loading Rack
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
Service Stations
Underground Storage Tank
Loading
None
Submerged Fill
None
Submerged Fill
Submerged Fill
None
None
Submerged Fill
Submerged Fill
None
None
None
None
Submerged Fill
None
None
None
-------
m
State
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
»«
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Termi nal
Loading Rack
None
Submerged Fill
None
Submerged Fill
(Region requires
90% control)
None
None
Submerged Fill
Submerged Fill
Vapor Collection
& Recovery
Bottom Loading
None
Vapor Collection
Submerged Fill
None
None
TABLE E.I (continued)
STATE AND LOCAL REGULATION OF HYDROCARBONS
Bulk Plant
Storage
Tank Loading
None
Submerged Fill
None
Submerged Fill
None
None
None
Submerged Fill
Submerged Fill
Submerged Fill
None
Submerged Fill
Submerged Fill
None
None
Loading Rack
None
Submerged Fill
None
Submerged Fill
None
None
None
None
None
Submerged Fill
None
None
None
None
None
Service Stations
Underground Storage Tank
Loading
None
Submerged Fill
None
90% Collection
None
None
None
Submerged Fill
Submerged Fill
Submerged Fill
None
Submerged Fill
Submerged Fill
None
None
-------
TABLE E.I (continued)
State
Tennessee
Texas
Utah
Virginia
Vermont
Washington
West Virginia
Wisconsin
Wyomi ng
Terminal
Loading Rack
None
Vapor Recovery
None
Vapor Control
None
None
None
None
None
STATE AND LOCAL
Storage
Tank Loading
None
Submerged Fill
None
None
None
None
None
None
Submerged Fill
REGULATION OF HYDROCARBONS
Bulk Plant
Loading Rack
None
None
None
None
None
None
None
None
None
Service Stations
Underground Storage Tank
Loading
None
Submerged Fill
None
None
None
None
None
None
Submerged Fill
Source: U.S. Environmental Protection Agency
-------
APPENDIX F
CASH FLOW WORKSHEETS
F.I
-------
TABLE F.I
CASH
FOR LARGE
FLOW WORKSHEET
MARINE TERMINAL1
(Thousand dollars/year)
PRIMARY SYSTEM
BJ
Present Term Debt 2
New Term Debt 3
Total Debt
Pre-Tax Profit4
Interest Expense5
Vapor Control Operating Expense
Adjusted Net Profit (BFIT)
Tax @ 50%
»
Adjusted Net Profit (AFT)
Present Depreciation
Vapor Control Equipment Depreciation
Total Depreciation
Estimated Cash Flow
Debt as % of Cash Flow (Pre Control)
Debt as % of Cash Flow (Post Control)
EFRIGERATIQN
58.9
38.3
97.2
840.0
(8.2)
35.7
867.5
(433.8)
433.8
118.8
30.6
149.4
583.2
11%
17%
INCINERATION
58.9
23.8
82.7
869.2
(6.9)
(19.7)
842.6
(421. 3)
421.3
118.8
19.0
137.8
559.1
11%
15%
PRIMARY SYSTEM
REFRIGERATION/
INCINERATION
58.9
54.0
112.9
882.0
(9.6)
22.9
895.3
(447.7)
447.7
118.8
43.2
162.0
609.7
11%
19%
WITH STANDBY
INCINERATION/
INCINERATION
58.9
39.5
98.4
907.5
(8.3)
(28.5)
870.7
(435.4)
435.4
118.8
31.6
150.4
585.8
11%
17%
2Assumes competitive pass through
g30% of net plant investment
^100% debt financing of vapor control equipment
5Ann-ual throughput times adjusted tariffs less pre-vapur control operating expense
sJl^T!811?611? mort9a9ed for 20 years @ 8%-, vapor control equipment mortgaged for 8 years (?
^Adjusted to include recovery credit .
10 year operating life
-------
CASH FLOW WORKSHEET
FOR. SMALL MARINE TERMINAL1
(Thousand dollars/year)
PRIMARY SYSTEM
REFRIGERATION INCINERATION
29.3
25.5
54.8
426.0
(.4.6)
13.5
434.9
(217.5)
217.5
7 54.6
n 20.4
75.0
292.5
12%
) 19%
29.3
i8.0
47.3
436.0
(4.0)
(14.1)
417.9
(209.0)
209.0
54.6
14.4
69.0
278.0
12%
17%
PRIMARY SYSTEM
REFRIGERATION/
INCINERATION
29.3
37.4
66.7
448.8
(5.7)
4.8
447.9
(224.0)
224.0
54.6
29.9
84.5
308.5
12%
22%
WITH STAND-BY
INCINERATION/
INCINERATION
29.3
29.9
59.2
457.0
(5.0)
(20.8)
431.2
(215.6)
215.6
54.6
23.9
78.5
294.1
12%
20%
Present Term
New Term Debt
Total Debt
Pre-Tax Profit 4 ,.
Interest Expense b ,
Vapor Control Operating Expense
Adjusted Net Profit (BFIT)
Tax (a 50%
Adjusted Net Profit (AFT)
Present Depredation
Vapor Control Equipment Depreciation
Total Depreciation
Estimated Cash Flow
Debt as % of Cash Flow (Pre Control)
Debt as % of Cash Flow (Post Control)
.^Assumes competitive pass through
^30% of net plant investment
debt financing of vapor control equipment
throughput times adjusted tariffs less ore-vapor control.operating expense
,,,«, investment mortgaged for 20 years e 8%; vapor control equipment mortgaged for 8 years 9 9A
^Adjusted to include recovery credit
10 year operating life
-------
TABLE F.3
Present Term Debt
New Term Debt3
Total Debt
Pre-Tax Profit c
Interest Expense0
Vapor Control Operating Expense
Adjusted Net Profit (BFIT)
Tax @ 50%
*
"Adjusted Net Profit (AFT)
Present Depreciation
Vapor Control Equipment Depreciation
Total Depreciation
Estimated Cash Flow
Debt as % of Cash Flow (Pre Control)
Debt as % of Cash Flow (Post Control)
oAssumes competitive pass through
CASH FLOW WORKSHEET
FOR LARGE PIPELINE TERMINAL1
(Thousand dollars/year)
PRIMARY SYSTEM
REFRIGERATION INCINERATION
37.1
38.3
75.4
544.4
(6.4)
35.7
573.7
286.9
286.9
7 84.4
i 30.6
HJLJ)
401.9
11%
) 19%
37.1
23.8
60.9
573.6
(5.1)
(19.7)
548.8
274.4
274.4
84.4
19.0
103.4
377.8
11%
16%
PRIMARY SYSTEM
REFRIGERATION/
INCINERATION
37.1
.54J3
91.1
586.9
(7.8)
22.9
602.0
301.0
301.0
84.4
43.2
127.6
428.6
11%
21%
WITH STAND-BY
INCINERATION/
INCINERATION
37.1
39 J[
76.6
612.0
(6.5)
(28.5)
577.0
288.5
288.5
84.4
31.6
116.0
404.5
11%
19%
o of net plant investment
?100% debt financing of vapor control equipment
rAnnual throughput times adjusted tariffs less pre-vapor control operating expense
cPlant investment mortgaged for 20 years @ 8%; vapor control equipment mortgaged for 8 years @ 9%
Adjusted to include recovery credit
10 year operating life
-------
TABLE F.4
en
CASH FLOW WORKSHEET
FOR SMALL PIPELINE TERMINAL1
(Thousand dollars/year)
PRIMARY SYSTEM
REFRIGERATION INCINERATION
14.8
25.5
40.3
226.9
(3.5)
13.5
236.9
(118.5)
118.5
, 32.0
i 20.4
52.4
170.6
11%
) 24%
14.8
18.0
32.8
237.0
(2.8)
(14.1)
220.1
(110.1)
110.1
'' 32 . 0
14.4
46.4
156.5
11%
21%
PRIMARY SYSTEM
REFRIGERATION/
INCINERATION
14.8
37.4
52.2
249.8
(4.6)
4.8
250.0
(125.0)
125.0
32.0
29.9
61.9
186.9
11%
28%
WITH STAND-BY
INCINERATION/
INCINERATION
14.8
29.9
44.7
258.0
(3.9)
(20.8)
233.3
(116.7)
116.7
32.0
23.9
55.9
172.6
11%
26%
Present Terra Debt
New Term
Total Debt
Pre-Tax Profit ,.
Interest Expense5
Vapor Control Operating Expense
Adjusted Net Profit (BFIT)
Tax @ 50%
Adjusted Net Profit (AFT)
Present Depreciation
Vapor Control Equipment Depreciation
Total Depreciation
Estimated Cash Flow
Debt as % of Cash Flow (Pre Control)
Debt as % of Cash Flow (Post Control)
^Assumes competitive pass through
.,30% of net plant investment
.100% debt financing of vapor control equipment
rAnnual throughput times adjusted tariffs less pre-vapor control operating expense
gPlant investment mortgaged for 20 years @ 8%; vapor control equipment mortgaged for 8 years @ 9%
^Adjusted to include recovery credit
10 year operating life
-------
TABLE F.5
BALANCE
INCOMING
ONLY
4.3
0.9
5.2
28.0
(0.4)
2.4
30.0
(15.0)
15.0
? 6.2
in 0.4
6.6
21.6
) 23%
il) 24%
CASH FLOH
FOR LARGE BULK
MOMSHEET
PLANT ( NO JC COSTS)1
(Thousand dollars/year)
BALANCE PRIMARY
INCOMING &
OUTGOING REFRIGERATION
4.3
5.1
9.4
32.6
(0.9)
2.9
34.6
(17.31
17.3
6.2
2.6
8.8
26.1
23%
.36%
4.3
19.0
23.3
51.0
(2.4)
1.0
49.6
(24.8)
24.8
6.2
9.5
15.7
40.5
23%
58%
SYSTEM
INCINERATION
4.3
10.2
14.5
46.0
(1.5)
(4.4)
40.1
(20.1)
20.1
6.2
5.1
11.3
31.4
23%
46%
PRIMARY SYSTEM
REFRIGERATION/
INCINERATION
4.3
24.0
28.3
58.9
(3.0)
(0.9)
55.0
(27.5)
27.5
6.2
12.0
18.2
45.7
23%
62%
WITH STAND-BY
INCINERATION/
INCINERATION
4.3
15.3
19.6
53.3
(2.0)
(5.7)
45.6
(22.8)
22.8
6.2
7.6
13.8
36.6
23%
54%
Present Term Debt2
New Term Debt 3
Total Debt
Pre-Tax Profit4 5
Interest Expense a
Vapor Control Operating Expense
Adjusted Net Profit (BFIT)
TI
o> Tax @ 50%
Adjusted Net Profit (AFT)
Present Depredation /
Vapor Control Equipment Depreciation 0.4
Total Depredation
Estimated Cash Flow
Debt'as % of Cash Flow (Pre Control) 23%
Debt as % of Cash Flow (Post Control) 24%
lAssunies competitive pass through
,60% of net plant investment
^100% debt financing of vapor control equipment
Annual throughput times adjusted tariffs less pre-vapor control operating expense
Slant investment mortgaged for 20 years 0 9%; vapor control equipment mortgaged fo4 5 years 9 1U
^Mjusted to include recovery credit
10 year operating life.
-------
TABLE F.6
CASH FLOW WORKSHEET
2
Present Term Debt
NPW Tprm D*»ht
Total Debt
Pre-Tax Profit4 5
Interest Expense g
Vann *» f* An + v*n1 Hno »*a ^ 1 n n P v none A
Adjusted Net Profit (BFIT)
T-y A CM
I OA I? 3U»
Adjusted Net Profit (AFT)
FOR LARGE
BALANCE
INCOMING
ONLY
4.3
0.9
5.2
28.0
(0.5)
2.4
29.9
(15.0)
15.0
Present Depreciation 76 -2
V/annr- Pnntr>n1 Fnili nmont Dpfi TPC.! flt 1 00 0.4
Total Depreciation 6.6
Estimated Cash Flow
Debt as % of Cash Flow (Pre Control
HoKt AC °L nf fa«;h Flow (Post Contrc
21.6
) 23%
il )24%
BULK PLANT (HOUSTON-GALVESTON COSTS)1
(Thousand dollars/year)
BALANCE
INCOMING &
OUTGOING
4.3
2.6
6.9
29.1
(0.7)
3.4
31.8
(15.9)
15.9
6.2
1.3
7.5
23.4
23%
29%
PRIMARY
REFRIGERATION
4.3
16.4
20.7
47.7
(2.2)
1.2
46.7
(23.4)
23.4
6.2
8.2
14.4
37.8
23%
55%
SYSTEM
INCINERATION
4.3
7.6
11.9
42.6
(1.2)
(4.1)
37.3
(18.7)
18.7
6.2
3.8
1 0 .0
28.7
23%
41%
PRIMARY SYSTEM
REFRIGERATION/
INCINERATION
4.3
21.5
25.8
55.6
(2.8)
(0.6)
52.2
(26.1)
26.1
6.2
10.7
16.9
43.0
23%
60%
WITH STAND-BY
INCINERATION/
INCINERATION
4.3
12.7
17.0
49.9
(1.8)
(5.4)
42.7
(21.41
21 .4
6.2
6.4
12.6
34.0
23%
50%
Assumes competitive pass through
o60% of net plant investment
?100% debt financing of vapor control equipment QvnQnCQ
%nual throughput times adjusted tariffs less pre-vapor control operating expense
^Plant investment mortgaged for 20 years 0 9%; vapor control equipment mortgaged for 5
^Adjusted tn include recover" credit
10 year operating ]ife
years @ 11%
-------
TABLE F.7
CASH
FLOW WORKSHEET
FOR LARGE BULK PLANT (COLORADO APCD
COSTS)1
(Thousand dollars/year)
2
Present Term Debt
New Term Debt
Total Debt
4
Pre-Tax Profit 5
Interest Expense
Vapor Control Operating Expense b
Adjusted Net Profit (BFIT)
Tax 0 50%
Adjusted Net Profit (AFT)
BALANCE
INCOMING
ONLY
4.3
o ,1
4.6
27.3
(0.4)
2 5
29.4
(11/71
14.7
Present Depredation . 7°'£
Vapor Control Equipment Depreciation^
T.^
|
c
s"
8
Total Depredation
Estimated Cash Flow
Debt as % of Cash Flow (Pre Control
Jbl
21.1
) 23%
Debt as % of Cash Flow (Post Control )22%
^Assumes competitive pass through
BALANCE
INCOMING &
OUTGOING
4.3
_1?P=
5.3
26.8
(0.5)
3.7
30.0
(15,01
15.0
60
. c.
0.5
6.7
21.7
23%
24%
PRIMARY
REFRI-GERATION
4.3
14.8
19.1
45.2
(2.0)
1.8
45.0
(22.5)
22^5
6 ">
7.4
13.6
___
36.1
23%
53%
SYSTEM
INCINERATION
4.3
6.0
10.3
69.5
(i.o)
(3.6)
64.9
(32.5)
32.5
6.2
3.0
9.2
41.7
23%
25%
PRIMARY SYSTEM
REFRIGERATION/
INCINERATION
4.3
19.9
24.2
53.1
(2.6)
(0.1)
50.4
(25.2)
25.2
6.2
9.9
16.1
41.3
23%
59%
WITH STAND-BY
INCINERATION/
INCINERATION
4.3
11.1
15.4
47.5
(1.6)
(4.9)
41.0
(20.5)
20.5
6.2
5.5
11.7
32.2
23%
48%
^60% of net plant investment
^inn% Hpht financing of vapor control equipment
«iuu/o ueui. i many, iny^wi *"r. ... r- f n .,,«,/, /-nn + vnl nnoratinn PYnpn<;p
rAnnual throughput times adjusted i
;ariTTS ie:
v/oa^c 0 Q<
«. [)'" £on1
:rol equipment me
)rtgaged for 5 y»
=ars (?!!%
^Adjusted to include recovery credit
10 year operating life
-------
TABLE F.8
CASH FLOW WORKSHEET
FOR SMALL BULK PLANT (NOJC
BALANCE
INCOMING
ONLY
1.7
0.9
2.6
11.4
(0.3)
0.3
11.4
(5.7)
5.7
72.3
i 0.4
2.7
8.4
21%
)31%
(Thous
BALANCE
INCOMING &
OUTGOING
1.7
4.6
6.3
12.4
(0.7)
(0.2)
11.5
(5.8)
5.8
2.3
2.3
4.6
10.4
21%
61%
COSTS)1
and dollars/year)
PRIMARY SYSTEM
REFRI-GERATION
1.7
18.4
20.1
16.0
(2.2)
(7.8)
6.0
(3.0)
3.0
2.3
9.2
11.5
14.5
21%
139%
INCINERATION
1 .7
9.7
11.4
15.0
(1.2)
(4.3)
9.5
(4.8)
4.8
2.3
4.8
7.1
11.9
21%
96%
PRIMARY SYSTEM
REFRIGERATION/
INCINERATION
1.7
23.5
25.2
17.6
(2.7)
(9.3)
5.6
(2.8)
2.8
2.3
11.7
14,0
16.8
21%
150%
WITH STAND-BY
INCINERATION/
INCINERATION
1.7
14.7
16.4
16.5
(1.8)
(5.6)
9.1
(4.6)
4.6
2.3
7.4
9.7
14.3
21%
115%
Present Term Debt
New Term Debt3
Total Debt
Pre-Tax Profit4
Interest Expense5
Vapor Control Operating Expense
Adjusted Net Profit (BFIT)
~n
10 Tax @ 50%
Adjusted Net Profit (AFT)
Present Depreciation f
Vapor Control Equipment Depreciation 0.4
Total Depreciation
Estimated Cash Flow
Debt as % of Cash Flow (Pre Control) 21
Debt as % of Cash Flow (Post Control
..Assumes competitive pass through
360% of net plant investment
4100% debt financing of vapor control equipment
cAnnual throughput times adjusted tariffs less pre-vapor control operating expense
gPlant investment mortgaged for 20 years @ 9%; vapor control equipment mortgaged for 5 years
-flHi'ustPd tn include rpcnverv crprlit
10 year operating life
-------
TABLE F.9
CASH FLOW WORKSHEET
FOR
BALANCE
INCOMING
ONLY
1.7
0.9
2.6
11.4
(0.3)
0.3
11.4
(5.7)
5.7
T2'3
/0.4
2.7
8.4
| 21%
1)31%
SMALL BULK PLANT (HOUSTON-GLAVI
(Thousand
BALANCE
INCOMING &
OUTGOING
1.7
2.1
3.8
11.6
(0.4)
0.1
11.3
J&D
5.7
2.3
1.1
3.4
9.1
21%
42%
ESTON COSTS)1
dollars/year)
PRIMARY SYSTEM
REFRI-GERATION
T.7
16.0
17.7
15.4
(1.9)
(7.5)
6.0
(3.0)
-" 3.0
2.3
8.0
10.3
13.3
21%
133%
INCINERATION
1.7
7.2
8.9
14.4
(0.9)
(4.0)
9.5
(4.8)
4.8
2.3
3.6
5.9
10.7
21%
83%
PRIMARY SYSTEM
REFRIGERATION/
INCINERATION
1.7
21.0
22.7
17.0
(2.5)
(8.9)
5.6
(2.8)
2.8
2.3
10.5
12.8
15.6
21%
146%
WITH STAND-BY
INCINERATION/
INCINERATION
1.7
12.2
13.9
15.8
(1.5)
(5.3)
9.0
(4.5)
4.5
2.3
6.1
8.4
12.9
21%
108%
Present Term Debt'
New Term DebtJ
Total Debt
Pre-Tax Profit * ,-
Interest Expense
Vapor Control Operating Expense
Adjusted Net Profit (BFIT)
*n
'o Tax 9 50%
Adjusted Net Profit (AFT)
Present Depreciation
Vapor Control Equipment Depreciation'0.4
Total Depreciation
Estimated Cash Flow
Debt as % of Cash Flow (Pre Control) 21%
Debt as % of Cash Flow (Post Control)31%
-Assumes competitive pass through
^60% of net plant investment
flOO% debt financing of vapor control equipment
^Annual throughput times adjusted tariffs less pre-vapor control operating expense
.Plant investment mortgaged for 20 years @ 9%; vapor control equipment mortgaged for 5 years 0
^Adjusted to include recovery credit
10 year operating life
-------
CASH FLOW WORKSHEET
FOR
BALANCE
INCOMING
TT ONLY
1.7
0.3
2.0
11.3
(0.2)
0.4
11.5
(5.8)
5.8
72.3
i 0.2
2.5
8.3
21%
)24%
SMALL BULK PLANT
(Thousand
BALANCE
(COLORADO APCD COSTS)1
dollars/year)
PRIMARY SYSTEM
INCOMING &
OUTGOING TT REFRI-GERATION
1.7
0.8
2.5
11.2
(0.2)
0.5
11.5
(5.8)
5.8
2.3
0.4
2.7
8.5
21%
29%
1.7
14.6
16.3
14.9
(1.8)
(7.0)
6.1
(3.1)
3.1
2.3
7.3
9.6
12.7
21%
128%
INCINERATION
1.7
5.8
7.5
19.7
(0.8)
(3.5)
15.4
(7.7)
7.7
2.3
2.9
5.2
12.9
21%
58%
PRIMARY SYSTEM
REFRIGERATION/
INCINERATION
1.7
19.6.
21.3
16.4
(2.3)
(8.5)
5.6
(2.8)
2.8
2.3
9.8
12.1
14.9
21%
143%
WITH STAND-BY
INCINERATION/
INCINERATION
1.7
10.9
12.6
15.3
(1.4)
(4.8)
9.1
(4.6)
4.6
2.3
5.4
7.7
12.3
21*
102%
Present Term Debt'
New Term Debt
Total Debt
Pre-Tax Profit 5
Interest Expense 6
Vapor Control Operating Expense
Adjusted Net Profit (BFIT)
Tax @ 50%
Adjusted Net Profit (AFT)
Present Depreciation . .-
Vapor Control Equipment Depreciation 0.2
Total Depreciation
Estimated Cash Flow
Debt as % of Cash Flow (Pre Control)
Debt as % of Cash Flow (Post Control
^Assumes competitive pass through
360% of net plant investment
^100% debt financing of vapor control equipment
gAnnual throughput times adjusted tariffs less pre-vapor control opearting expense
gPlant investment mortgaged for 20 years @ 9%; vapor control equipment mortgaged for 4 years 9 11%
7Adjusted to include recovery credit
10 year operating life
-------
APPENDIX G
VAPOR CONTROL IMPACTS ON PROTOTYPICAL
BULK STORAGE FACILITIES
G.I
-------
TABLE G.I
VAPOR CONTROL COSTS AT LARGE MARINE TERMINALS1
(Thousand dollars)
TYPE PRIME SYSTEM
Back-up System
Current Investment
Added Vapor Control
Investment
Total Investment-Post
Vapor Control
Vapor Control Operating
Expenses
Utilities
M & R
Taxes, Insurance, G
Recovery Credit
Net Expenses
Unit Operating Expenses
- Gasoline Only
Pre Control
Post Control
REFRIGERATION
VAPOR RECOVERY
NO
3926.4
306.0
4232.4
19.8
10.7
&A 12.2
(78.4)
(35.7)
($/Gal)
.00288
.00268
Tari f f Increase/ (DecreaseX . 00020)
INCENERATION
NO
3926.4
190.0
4116.4
6.8
5.3
7.6
19.7
. 00288
.00299
.00011
REFRIGERATION
VAPOR RECOVERY
YES
3926.4
432.0
4358.4
19.8
14.5
17.3
(74.5)
(22.9)
.00288
.00275
(.00013)
NO PASS THROUGH CASE
ROI Impact
2
Total Terminal Revenue
Expenses-Pre Control
Expenses-Vapor Control
Net Income-Post Control
ROI
(Thousand
1795.3
(987.2)
( 17.7)
787.2
18.64%
dollars)
1795.3
(987.2)
( 52.9)
752.0
18.31%
1795.3
(987.2)
( 52.5)
752.4
17.30%
% Increase/ (Decrease) over
Pre Control Case
( 9.3%)
(10.9%)
(15. R%)
1'Gasoline Ihrougnput - 500,000 gallons/cb.y
2 Target Tariff = $.00523/Gal.
3 Includes principle and interest payments .for vapor control equipment.
INCINERATION
YES
3926.4
316.0
4242.4
6.8
9.1
12.6
28.5
,00288
.00304
.00016
1795.3
(987.2)
( 83.6)
721.3
17.04%
(17.0%)
G.2
-------
TABLE G.I (continued)
VAPOR CONTROL COSTS AT LARGE MARINE TERMINALS
(Thousand
REFRIGERATION
TYPE PRIME SYSTEM VAPOR RECOVERY
Back-up System
Capital Recovery Requirement
Pre Control'
0
Vapor Control
Total Capital Recovery
Operating Expenses
Pre Control
Vapor Control
Total Expenses-Post Control
NO
806.5
73.0
879.5
987.2
(35.7)
954.7
dollars)
INCINERATION
NO
806.5
45.3
851.3
987.2
19.7
1010.1
REFRIGERATION
VAPOR RECOVERY
YES
806.5
103.0
909.5
987.2
(22.4)
968.0
INCINERATION
YES
806.5
75.4
881.9
987.2
28.5
1018.9
FULL PASS THROUGH CASE
(Thousand
dollars)
Gasoline Tariff Required ($/Gal)
Pre Control
Vapor Control Capital
Recovery
Vapor Control Operating
Expenses
Gasoline Tariff Required-
Post Control
% Increase/(Decrease) over
Pre Control Case
.00523
.00040
(.00020)
.00543
3.8%
.00523
.00025
.00011
.00559
6.9%
.00523
.00056
(.00013)
.00566
8.2%
.00523
.00041
.00016
.00580
10.9%
1
20% BFIT, 20 years
120% BFIT, 10 years
G.3
-------
-TABLE G.2
VAPOR CONTROL COSTS AT SMALL MARINE
TERMINAL1
(Thousand dollars)
REFRIGERATION
TYPE PRIME SYSTEM VAPOR RECOVERY INCINERATION
Back-up System
Current Investment
Added Vapor Control
Investment
Total Investment-Post
Vapor Control
Vapor Control Operating
Expenses
Utilities
M & R
Taxes, Insurance, G & A
Recovery Credit
Net Expenses
Unit Operating Expenses ($/Gal)
- Gasoline Only
Pre Control
Post Control
Tariff Increase/ (DecreaseX
ROI Impact
2
Total Terminal Revenue
Expenses-Pre Control
Expenses-Vapor Control
Net Income-Post Control
ROI
NO
1951.6
204.0
2155.6
9.9
7.6
8.2
(39.2)
(13.5)
.00394
.00379
.00011)
NO PASS THROUGH
(Thousand dol
904.8
(502.9)
( 22.1)
377.8
17.53%
NO
1951.6
144.0
2095.6
3.9
4.4
5.8
--
' 14.1
.00394
.00401
.00011
CASE
lars)
904.8
(502.9)
(.39.2)
360.7
17. 21*
REFRIGERATION
VAPOR RECOVERY
YES
1951.6
299.0
2250.6
9.9
10.5
12.0
(37.2)
(4.8)
.00394
.00386
(.00004)
904.8
(502.9)
( 47.4)
352.5
15.66%
% Increase/(Decrease) over
Pre Control Case
1
(14.8%)
(16.2%)
(23.7%)
^Gasoline Throughput - 250,000 gallons/day
parget Tariff = $.00708/gallon
Includes principle and interest payments for vapor control equipment
INCINERATION
YES
1951.6
239.0
2190.6
3.9
7.3
9.6
20.8
.00394
.00406
.00016
904.8
(502.9)
( 62.5)
337.4
15.40%
(25.0%)
G.4
-------
TABLE G.2 (continued)
VAPOR CONTROL COSTS AT SMALL MARINE
(Thousand dollars)
REFRIGERATION
TYPE PRIME SYSTEM VAPOR RECOVERY INCINERATION
Back-up System
Capi tal Recovery Requi rement
Pre Control
p
Vapor Control
Total Capital Recovery
Operating Expenses
Pre Control
Vapor Control
Total Expenses-Post Control
Gasoline Tariff Required ($/Gal
Pre Control
Vapor Control Capital
Recovery
Vapor Control Operating
Expenses (
Gasoline Tariff Required-
Post Control
% Increase/(Decrease) over
f>y*a Print rnl P.a^p
NO
400.9
48.7
449.6
502.9
(13.5)
NO
400.9
34.3
435.2
502.9
14.1
489.4 517.0
FULL PASS THROUGH CASE
(Thousand
)
.00708
.00038
.00011)
.00735
3.8%
dollars)
.00708
.00027
.00011
.00746
5.4%
TERMINAL
REFRIGERATION
VAPOR RECOVERY
YES
400.9
71.3
472.2
502.9
(4.8)
498.1
.00708
.00056
(.00004)
.00760
7.4%
INCINERATION
YES
400.9
57.0
457.9
502.9
20.8
523.7
.00708
.00045
.00015
.00769
8.7%
1
20% BFIT, 20 years
:20% BFIT, 10 years
G.5
-------
TABLE G.2 (continued)
VAPOR CONTROL COSTS AT SMALL MARINE TERMINAL
(Thousand dollars)
COMPETITIVE PASS-THROUGH CASE
TYPE PRIME SYSTEM
Gasoline Tariff ($/Gal)
Pre-control
Full Pass-through of
most efficient unit
Gasoline Tariff -
Post Control
REFRIGERATION REFRIGERATION
VAPOR RECOVERY INCINERATION VAPOR RECOVERY INCINERATION
.00708
.00020
.00728
.00708
.00036
.00744
.00708
.00043
.00751
.00708
.00057
.00765
% Increase/(Decrease) over
Pre-control Case
2.8%
5.1%
6.1%
8.1%
ROI Impact
Total Terminal Revenue
Expenses - Pre-Control
2
Expenses - Vapor Control
Net Income - Post Control
923.1
(02.9)
( 22.1)
937.7
(502.9)
( 39.2)
944.1
(502.9)
( 47.4)
956.9
(502.9)
( 62.5)
398.1
395.6
393.8
391.5
ROI
18.44%
18.85%
17.47%
17.84%
% Increase/(Decrease) over
Pre-Control Case
( 10.2%)
( 8.2%)
( 14.9%)
( 13.1%)
1
on above gasoline tariffs
Includes principle and interest payments for vapor control equipment
G.6
-------
TABLE G.3
VAPOR CONTROL COSTS AT LARGE PIPELINE TERMINAL1
^Thousand dollars)
TYPE PRIME SYSTEM
Back-up System
Current Investment
Added Vapor Control
Investment
Total Investment-Post
Vapor Control
Vapor Control Operating
Expenses
Utilities
M & R
Taxes, Insurance, G
Recovery Credit
Net Expenses
Unit Operating Expenses
- Gasoline Only
Pre Control
Post Control
REFRIGERATION
VAPOR RECOVERY
NO
2473.1
306.0
2779.1
19.8
10.7
& A 12.2
(78.4)
(35.7)
l$/Gal)
.00243
.00223
Tariff Increase/ ( Decrease X- 00020)
INCENERATION
NO
2473.1
190.0
2653.1
6.8
5.3
7.6
19.7
.00243
.00254
.00011
REFRIGERATION
VAPOR RECOVERY
YES
2473.1
432.0
2905.1
19.8
14.5
'17.3
(74.5)
(22.9)
.00243
.00230
(.00013)
NO PASS THROUGH CASE
ROI Impact
z
Total Terminal Revenue
Expenses-Pre Control
Expenses-Vapor Control
Net Income-Post Control
ROI
(Thousand
1240.6
(732.3)
( 17.7)
490.0
17.64%
dollars)
1240.6
(732.3)
( 52.9)
454.8
17.09%
1240.6
(732.3)
( 52.5)
455.2
15.68%
(23.7*)
% Increase/(Decrease) over
Pre Control Case ( 14.1%) (16.8%)
Icasoline Throughput - 500,000 gallons/day
^Target Tariff = $.004127galIon
^Includes principle and interest payments for vapor control equipment
INCINERATION
YES
2473.1
316.0
2789.1
6.8
9.1
12.6
28.5
.00243
.00259
.00016
1240.6
(732.3)
( 83.6)
424.1
15.22%
( 25.9%)
G.7
-------
TABLE G.3 (continued)
VAPOR CONTROL COSTS AT LARGE PIPELINE TERMINAL
(Thousand dollars)
REFRIGERATION
TYPE PRIME SYSTEM VAPOR RECOVERY INCINERATION
Back-up System
Capital Recovery Requirement
Pre Control
9
Vapor Control
Total Capital Recovery
Operating Expenses
Pre Control
Vapor Control
Total Expenses-Post Control
NO
508.0
73.0
581.0
732.3
(35.7)
NO
508.0
45.3
553.0
732.3
19.7
696.4 752.0
FULL PASS THROUGH CASE
(Thousand
Gasoline Tariff Required ($/Gal)
Pre Control
Vapor Control Capital
Recovery
Vapor Control Operating
Expenses
Gasoline Tariff Required-
Post Control
% Increase/ (Decrease) over
Pre Control Case
.00412
.00040
(.00020)
.00432
4.9%
dollars)
.00412
.00025
.00011
.00448
8.7%
REFRIGERATION
VAPOR RECOVERY
YES
508.0
103.0
611.0
732.3
(22.9)
709.4
.00412
.00056
(.00013)
.00455
10.4%
YES
508.0
75.4
583.4
732.3
28.5
760.8
.00412
.00041
.00016
.00469
13.8%
BFIT, 20 years
BFIT, 10 years
G.8
-------
TABLE G.4
VAPOR CONTROL COSTS AT SMALL PIPELINE TERMINAL1
(Thousand dollars)
TYPE PRIME SYSTEM
Back-up System
Current Investment
Added Vapor Control
Investment
Total Investment-Post
Vapor Control
Vapor Control Operating
Expenses
Utilities
M & R
Taxes, Insurance, G
Recovery Credit
Net Expenses
Unit Operating Expenses
- Gasoline Only
Pre Control
Post Control
REFRIGERATION
VAPOR RECOVERY INCENERATION
NO
989.9
204.0
1193.9
9.9
7.6
& A 8'2
(39.2)
(13.5)
($/Gal)
.00305
.00294
Tariff Increase/(0ecrease)(. 00011 )
ROI Impact
Total Terminal Revenue ^
Expenses-Pre Control
Expenses-Vapor Control
Net Income-Post Control
Rm
NO PASS THROUGH
(Thousand doll
627.0
(423.5)
( 22.1)
181.0
15.18%
NO
989.9
144.0
1133.9
3.9
4.4
5.8
--
14.1
.00305
.00316
.00011
CASE
ars)
627.0
(423.5)
r 39. n
164.9
14.47%
REFRIGERATION
VAPOR RECOVERY
YES
989.9
299.0
1288.9
9.9
10.5
12.0
(37.2)
( 4.S)
.00305
.00296
(.00004)
627.0
(423.5)
( 47.4)
155.7
12.10%
% Increase/(Decrease) over
Pre Control Case
1
(28,1$)
(29.5%)
(41.1
'Gasoline Throughput - 250,000 gallons/day
^Target Tariff = $.00451/gallon .
Includes principle and interest payments for vapor control equipment
INCINERATION
YES
989.9
239.0
1228.9
3.9
7.3
9.6
20.8
.00305
.00321
.00016
627.0
(423.5)
( 62.5)
140.6
11.46%
(44.2%)
G.9
-------
TABLE G.4 (continued)
VAPOR CONTROL COSTS AT SMALL PIPELINE TERMINAL
(Thousand
REFRIGERATION
TYPE PRIME SYSTEM VAPOR RECOVERY
Back-up System
Capital Recovery Requirement
Pre Control
Vapor Control
Total Capital Recovery
Operating Expenses
Pre Control
Vapor Control
Total Expenses-Post Control
NO
203.3
48.7
252.0
423.5
(13.5)
410.0
dollars)
INCINERATION
NO
203.3
34.3
237.6
423.5
14.1
437.6
REFRIGERATION
VAPOR RECOVERY
YES
203.3
71.3
274.6
423.5
(4.8)
418.7
FULL PASS THROUGH CASE
Gasoline Tariff Required ($/Gal
Pre Control
Vapor Control Capital
Recovery
Vapor Control Operating
Expenses (
Gasoline Tariff Required-
Post Control
% Increase/ (Decrease) over
Pre Control Case
(Thousand
)
.00451
.00038
.00011)
.00478
S.0%
dollars)
.00451
.00027
.00011
.00489
8.4%
.00451
.00056
(.00004)
.00503
11.5%
YES
203.3
57.0
260.3
423.5
20.8
444.3
.00451
.00045
.00016
.00512
13.5%
1
20% BFIT, 20 years
-20% BFIT, 10 years
G.10
-------
TABLE 6.5
VAPOR CONTROL COSTS (NOJC) AT LARGE BULK PLANTS1
(Thousand dollars)
OPTION
TYPE PRIMARY
SYSTEM
TYPE LOADING '
BACK-UP SYSTEM
Current Investment
Added Vapor Control
Investment
Total Investment-Post
Control
Vapor Control Operating
Expenses
Utilities
Labor
N & R
Mis., Taxes, Ins. , G &
Recovery Credit
Net Expenses
1
BALANCE
Incoming
TT Only
TOP
NO
143.00
4.25
147.25
--
0.07
A 0.17
(2.59)
(2.35)
3
BALANCE
4
REFRIG-
ERATION
4
INCIN-
ERATION
Incoming VAPOR
& Outgo- CONTROL
ing Trucks
TOP
NO
143.00
25.73
168.73
--
0.17
1.03
(4.08)
(2.88)
TOP
NO
143.00
94.88
237.88
2.17
1.43
2.76
3.80
(11.11)
( 1.00)
TOP
NO
143.00
50.99
193.99
0.16
1.43
0.79
2.04
__
4.42
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
YES
143.00
120.12
263.12
2.17
1.43
3.07
4.80
(10.55)
0.92
4
INCIN-
ERATION
TOP
YES
143.00
76.25
219.25
0.16
1.43
1.10
3.05
^
5.74
Unit Operating Expenses ($/Gal)
- Gasoline Only
Pre Control
Post Control
Increase/ (Decrease)
ROI Impact
y
Bulk Plant Revenue
Expenses-Pre Control
Expenses-Vapor Control
Net Income- Post Control
Dnr/pnp
.01486
.01454
(.00032)
NO PASS
.01486
.01447
(.00039)
THROUGH
(Thousand dol l
192.10 192.10
(162.50)
3 1.25
30.45
20.81%
(162.50)
(3.77)
25.43
15.19%
.01486
.01472
(.00014)
CASE
ars)
192.10
(162.50)
(23.53)
5.67
2.47%
.01486
.01547
.00061
192.10
(162.50)
(8.76)
20.44
10.64%
.01486
.01499
.00013
192.10
(162.50)
(31.98)
(2.38)
__
.01486
.01565
.00079
192.10
(162.50)
(25.45)
3.75
1.80%
% Increase/(Decrease) over
Pre Control Case
1
1.3%
26.0%
88.0%
(48.2%)
^Gasoline Throughput - 20,000 gallons/day
^Target Tariff = $.01754/gallon
Includes principle and interest payments for vapor control equipment
G.ll
(91.2%)
-------
TABLE G.5 (continued)
VAPOR CONTROL COSTS (NOJC) AT LARGE BULK PLANTS
(Thousands dol
lars)
FULL PASS THROUGH CASE
OPTION
TYPE PRIMARY
SYSTEM
TYPE LOADING
BACK-UP SYSTEM
Capital Recovery Requirement
Pre Control
2
Vapor Control
Total Capital Recovery
Operating Expenses
Pre Control
Vapor Control
Total Expenses-Post Control
Gasoline Tariff ($/Gal)
Pre Control
Vapor Control Capital
Recovery
Vapor Control
Operating Expenses
Gasoline Tariff- Post
Control
% Increase/(0ecrease) over
Pre Control Case
1
BALANCE
Incoming
TT Only
TOP
NO
29.40
1.01
30.41
162.50
(2.35)
160.15
.01754
.00014
(.00032)
.01736
(1.0%)
3
BALANCE
Incoming
& Outgoing
Trucks
TOP
NO
29.40
6.14
35.54
162.50
(2.88)
159.62 '
.01754
.00084
(.00039)
.01799
2.6%
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
NO
29.40
22.63
52.03
162.50
(1.00)
161.50
.01754
.00310
(.00014)
.02050
16.9%
4
INCIN-
ERATION
TOP
NO
29.40
12.16
41.56
162.50
4.42
166.92
.01754
.00167
.00061
.01982
13.0%
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
YES
29.40
28.65
58.05
162.50
0.92
163.42
.01754
.00392
.00013
.02159
23.1%
4
INCIN-
ERATION
TOP
YES
29.40
18.19
47.59
162.50
5.74
168.24
.01754
.00249
.00079
.02082
18.7%
'20% BFIT, 20 years
?20% BFIT, 10 years
G.T2
-------
TABLE G.6
VAPOR CONTROL COSTS (HOUSTON-GALVESTON) AT LARGE BULK PLANTS1
OPTION
TYPE PRIMARY
SYSTEM
TYPE LOADING-
BACK-UP SYSTEM
Current Investment
Added Vapor Control
Investment
Total Investment-Post
Control
Vapor Control Operating
Expenses
Utilities
Labor
M & R
Mis., Taxes, Ins., G &
Recovery Credit
Net Expenses
Unit Operating Expenses ($/(
- Gasoline Only
Pre Control
Post Control
Increase/(Decrease)
ROI Impact
c 2
Bulk Plant Revenue
Expenses-Pre Control
Expenses-Vapor Control
Net Income-PoVst Control
DflT
(Thousand dollars)
1 3 4
REFRIG-
BALANCE BALANCE ERATION
Incoming Incoming VAPOR
TT Only & Outgo- CONTROL
inq Trucks
TOP
NO
143.00
4.25
147.25
0.07
A 0.17
(2.59)
(2.35)
3al)
.01486
.01454
(.00032)
NO PASS
TOP
NO
143.00
12.98
155.98
0.39
0.52
(4.08)
(3.17)
.01486
.01440
(.00046)
THROUGH
(Thousand do 1 1
192.10 192.10
(162.50) (162.50)
3 1.25 0.01
30.45
20.81%
29.21
18.85%
TOP
NO
143.00
82.13
225.13
2.17
1.43
2.98
3.29
(11.11)
(1.24)
.01486
.01469
(.00017)
CASE
ars)
192.10
(162.50)
(19.99)
9.21
4.18%
4
INCIN-
ERATION
TOP
NO
143.00
38.24
181.24
0.16
1.43
1.01
1.53
4.13
.01486
.01543
.00057
192.10
(162.50)
(14.02)
15.18
8.49%
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
YES
143.00
107.37
250.37
2.17
1.43
3.29
4.29
(10.55)
0.63
.01486
.01495
.00009
192.10
(162.50)
(28.39)
.81
0.4%
4
INCIN-
ERATION
TOP
YES
143.00
63.50
206.50
0.16
1.43
1.32
2.54
5.45
.01486
.01561
.00075
192.10
(162.50)
(21.87)
7.33
3.56%
% Increase/(Decrease) over
Pre Control Case
1.3%
(8.20%) (79.7%) (58.7%) (98.0%) (82.2%)
^Gasoline Throughput - 20,000 gallons/day
^Target Tariff = $.017547galIon .
Includes principle and interest payments for vapor control equipment
G.13
-------
TABLE G.6 (continued)
VAPOR CONTROL COSTS (HOUSTON-GALVESTON) AT LARGE BULK PLANTS
(Thousand dollars)
FULL PASS THROUGH CASE
OPTION
TYPE PRIMARY
SYSTEM
TYPE LOADING
BACK-UP SYSTEM
Capital Recovery Requirement
Pre Control
Vapor Control2
Total Capital Recovery
Operating Expenses
Pre Control
Vapor Control
Total Expenses-Post Control
Gasoline Tariff ($/Gal)
Pre Control
Vapor Control Capital
Recovery
Vapor Control
Operating Expenses
Gasoline Tariff-Post
Control
1
BALANCE
Incoming
TT Only
TOP
NO
29.40
1.01
29.41
162.50
(2.35)
160.15
.01754
.00014
(.00032)
.01736
3
BALANCE
Incoming
& Outgoing
Trucks
TOP
NO
29.40
3.10
31.50
162.50
(3.17)
158.93
.01754
.00042
(.00046)
.01750
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
NO
29.40
19.59
47.99
162.50
(1.24)
161.26
.01754
.00268
(.00017)
.02005
4
INCIN-
ERATION
TOP
NO
29.40
9.12
37.52
162.50
4.13
166.63
.01754
.00125
.00057
.01936
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
YES
29.40
25.61
54.01
162.50
0.63
163.13
.01754
.00351
.00009
.02114
4
INCIN-
ERATION
TOP
YES
29.40
15.14
43.54
162.50
5.45
167.95
.01754
.00207
.00075
.02036
% Increase/(Decrease) over
Pre Control Case (1.0%)
(0.2%) 14.3%
10.4% 20.5%
1
20% BFIT, 20 years
BFIT, 10 years
1 6.1".',
G.14
-------
TABLE 6.7
VAPOR CONTROL COSTS
(COLORADO APCD) AT LARGE BULK PLANTS1
(Thousand dollars)
OPTION
TYPE PRIMARY
SYSTEM
TYPE LOADING '
BACK-UP SYSTEM
Current Investment
Added Vapor Control
Investment
Total In vestment- Post
Control
Vapor Control Operating
Expenses
Utilities
Labor
M & R
1
BALANCE
Incoming
TT Only
TOP
NO
143.00
1.70
144.70
0.05
Mis., Taxes, Ins., G & A 0.07
Bornvpw CrpHl t"
Net Expenses
(2.59)
(2.47)
3 4
REFRIG-
BALANCE ERATION
Incoming VAPOR
& Outgo- CONTROL
inq Trucks
TOP TOP
NO NO
143.00 143.00
4.88 74.03
147.88 217.03
2.17
1.43
0.15 2.74
0.20 2.96
(4.08) (11.11)
(3.73) (1.81)
4 4
INCIN- REFRIG-
ERATION ERATION
VAPOR
CONTROL
TOP TOP
NO YES
143.00 143.00
30.14 99.27
173.14 242.27
0.16 2.17
1.43 1.43
0.77 3.05
1.21 3.97
(10.55)
3.57 0.07
4
INCIN-
ERATION
TOP
YES
143.00
55.40
198.40
0.16
1.43
1.08
2.22
4.89
Unit Operating Expenses ($/Gal)
- Gasoline Only
Pre Control
Post Control
Increase/ (Decrease)
.01486
.01452
(.00034)
.01486 .01486
.01435 .01461
(.00051) (.00025)
.01486 .01486
.01535 .01487
.00049 .00001
.01486
.01553
.00067
NO PASS THROUGH CASE
(Thousand dollars)
ROI Impact
2
Bulk Plant Revenue
Expenses-Pre Control
Expenses-Vapor Contro
Net Income- Post Control
ROI
% Increase/ (Decrease) over
Pre Control Case
192.10
(162.50)
I3 2.03
31.23
21.72%
5.7%
192.10 192.10
(162.50) (162.50)
2.47 (17.33)
31.67 11.87
21.55% 5.56%
4.9% (72.9%)
192.10 192.10
(162.50) (162.50)
(11.36) (25.74)
17.84 3.46
10.42% 1.51%
(49.3%) (92.6%)
192.10
(162.50)
(19.21)
.99
5.14%
(75.0%)
ltWW^^*l**l^* w»»w --
iGasoline Throughput - 20,000 gallons/day
^Target Tariff = $.01754/gallon
^Includes principle and interest payments for vapor control
G.I 5
equipment
-------
TABLE G.7 (continued)
VAPOR CONTROL COSTS (COLORADO APCD) AT LARGE BULK PLANTS
(Thousand dollars)
FULL PASS THROUGH CASE
OPTION
TYPE PRIMARY
SYSTEM
TYPE LOADING
BACK-UP SYSTEM
Capital Recovery Requirement
Pre Control ^
Vapor Control2
Total Capital Recovery
Operating Expenses
Pre Control
Vapor Control
Total Expenses-Post Control
Gasoline Tariff ($/Gal)
Pre Control
Vapor Control Capital
Recovery
Vapor Control
Operating Expenses
Gasoline Tariff-Post
Control
1
BALANCE
Incoming
TT Only
TOP
NO
29.40
0.41
29.81
162.50
(2.47)
164.97
.01754
.00006
(.00034)
.01726
3
BALANCE
Incoming
& Outgoing
Trucks
TOP
NO
29.40
1.16
30.56
162.50
(3.73)
166.23
,01 754
.00016
(.00051)
.01719
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
NO
29.40
17.66
47.06
162.50
(1.81)
164.31
.01754
. 00242
(.00025)
.01971
4
INCIN-
ERATION
TOP
NO
29.40
7.19
36.59
162. 50'
3.57
166.07
.01754
.00098
.00049
.01901
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
YES
29.40
23.68
53.08
1 62 . 50
0.07
162.57
.01754
.00324
.00001
.02079
4
INCIN-
ERATION
TOP
YES
29.40
13.21
42.61
162.50
4.89
167.39
.01754
.00181
.00067
.02002
% Increase/(Decrease) over
Pre .Control Case (1.6%)
(2.0%) 12.4%
8.4%
18.5%
1
20% BFIT, 20 years
?10% BFIT, 10 years
14.1%
G.16
-------
TABLE G.8
VAPOR
CONTROL COSTS (NOJC)
AT SMALL BUL
K PLANTS1
I Thousand dollars)
OPTION
TYPE PRIMARY
SYSTEM
1
BALANCE
Incoming
TT Only
3
BALANCE
Incoming
& Outgo-
4
REFRIG-
ERATION
VAPOR
CONTROL
4
INCIN-
ERATION
ing Trucks
TYPE LOADING .
BACK-UP SYSTEM
Current Investment
Added Vapor Control
Investment
Total Investment-Post
Control
Vapor Control Operating
Expenses
Utilities
Labor
M & R
Mis. , Taxes, Ins. , G &
Recovery Credit
Net Expenses
TOP
NO
57.00
4.25
61.25
--
--
0.07
A 0.17
(0.51)
(0.27)
TOP
NO
57.00
23.03
80.03
--
--
0.07
0.92
(0.81)
0.18
TOP
NO
57.00
92.18
149.18
2.17
1.43
2.75
3.69
(2.19)
7.85
TOP
NO
57.00
48.32
105.32
0.16
1.43
0.78
1.93
__
4.30
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
YES
57.00
117.42
174.42
2.17
1.43
3.06
4.70
(2.08)
9.28
4
INCIN-
ERATION
TOP
YES
57.00
73.55
130.55
0.16
1.43
1.09
2.94
_
5.62
Unit Operating Expenses ($/Gal)
- Gasoline Only
Pre Control
Post Control
Increase/(Decrease)
.02670
.02652
(.00018)
NO PASS
.02670
.02682
.00012
THROUGH
(Thousand doll
ROI Impact
2
Bulk Plant Revenue
Expenses-Pre Control
Expenses-Vapor Control
Net Income- Post Control
ROI /ROE
66.70
(54.90)
(0.83)
10.77
17.75%
66.70
(54.90)
(6.13)
5.47
6.96%
.02670
.03208
.00538
CASE
ars)
66.70
(54.90)
(31.68)
(19.88)
___
.02670
.02965
.00295
66.70
(54.90)
(16.79)
(4.99)
___
.02670
.03306
.00636
66.70
(54.90)
(39.64)
(27.84)
___
.02670
.03055
.00385
66.70
(54.90)
(24.64)
(12.84)
___
% Increase/(Decrease) over
Pre Control Case (13.6%) (66.1%)
?Gasoline Throughput - 4,000 gallons/day
^Target Tariff = $.03238/gallon
Includes principle and interest payments for vapor control equipment
6.17
-------
TABLE 6.8 (continued)
VAPOR CONTROL COSTS (NOJC) AT SMALL BULK PLANTS
(Thousand dollars)
FULL PASS THROUGH CASE
OPTION
TYPE PRIMARY
SYSTEM
TYPE LOADING
BACK-UP SYSTEM
Capital Recovery Requirement
Pre Control
2
Vapor Control
Total Capital Recovery
Operating Expenses
Pre Control
Vapor Control
Total Expenses-Post Control
Gasoline Tariff ($/Gal)
Pre Control
Vapor Control Capital
Recovery
Vapor Control
Operating Expenses
Gasoline Tariff-Post
Control
1
BALANCE
Incoming
TT Only
TOP
NO
11.70
1.01
12.71
54.90
(0.27)
54.63
.03238
.00069
(.00018)
.03289
3
BALANCE
Incoming
& Outgoing
TrucRs
TOP
NO
11.70
5.49
17.19
54.90
0.18
55.08
*
.03238
.00376
.00012
.03626
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
NO
11.70
21.98
33.68
54.90
7.85
62.75
.03238
.01505
.00538
.05281
4
INCIN-
ERATION
TOP
NO
11.70
11.52
23.22
54.90
4.30
59.20
.03238
.00789
.00295
.04322
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
YES
11.70
28.00
39.70
54.90
9.28
64.18
.03238
.01918
.00636
.05792
4
INCIN-
ERATION
TOP
YES
11 .70
17.54
29.24
54.90
5.62
60.52
.03238
.01201
.00385
.04824
% Increase/(Decrease) over
Pre Control Case
1
1.6*
12.0%
63.1%
33.5%
78.9%
20* BFIT, 20 years
210% BFIT, 10 years
49.0%
G.18
-------
TABLE G.8 (continued)
VAPOR CONTROL COSTS (NOJC) AT SMALL BULK PLANTS
(Thousand dollars)
COMPETITIVE PASS THROUGH CASE
OPTION
TYPE PRIMARY -
SYSTEM
TYPE LOADING
BACK-UP SYSTEM
Gasoline Tariff ($/Gal)
Pre Control
Capital Recovery-Most
Efficient Unit
Operating Expense-Most
Efficient Unit
Gasoline Tariff-Post
Control
? Increase/ (Decrease) over
?re Control Case
ROI Impact
Bulk Plant Revenue
Expenses-Pre Control
o
Expenses-Vapor Control
Net Income-Post Control
1
BALANCE
Incoming
TT Only
TOP
NO
.03238
.00014
(.00032)
.03220
(0.6%)
66.44
(54.90)
(0.83)
10.51
3
BALANCE
Incoming
& Outgo-
ing Trucks
TOP
NO
.03238
.00084
(.00039)
..03283
1.4%
67.36
(54.90)
(6.13)
6.13
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
NO
.03238
.00310
(.00014)
.03534
9.1%
71.02
(54.90)
(31.68)
(15.56)
4
INCIN-
ERATION
TOP
NO
.03238
.00167
.00061
.03466
7.0%
70.03
(54.90)
(16.79)
(1.66)
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
YES
.03238
.00392
.00013
.03643
12.5%
72.62
(54.90)
(39.64)
(21.92)
4
INCIN-
ERATION
TOP
YES
.03238
.00249
.00079
.03566
10.1%
71.49
(54.90)
(24.64)
(8.05)
ROI/ROE
17.32%
7.78%
lncrease/(Decrease) over
^re Control Case (15.7%) (62.1%)
1
Based on above gasoline tariffs
2Includes principle and interest payments for vapor control equipment
G.19
-------
TABLE G.9
VAPOR CONTROL COSTS (HOUSTON -GAL VESTON) AT SMALL BULK PLANTS1
(Thousand doll
OPTION
TYPE PRIMARY
SYSTEM
TYPE LOADING
BACK-UP SYSTEM
Current Investment
Added Vapor Control
Investment
Total Investment-Post
Control
Vapor Control Operating
Expenses
Utilities
Labor
M & R
Mis., Taxes. Ins., G &
Recovery Credit
Net Expenses
1
BALANCE
Incoming
TT Only
TOP
NO
57.00
4.25
61.25
--
0.07
A 0.17
(0.51)
(0.27)
3
BALANCE
Incoming
& Outgo-
ing Trucks
TOP
NO
57.00
10.70
67.70
--
0.32
0.43
(0.81)
(0.06)
lars)
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
NO
57.00
79.85
136.85
2.17
1.43
2.91
3.19
(2.19)
7.51
4
INCIN-
ERATION
TOP
NO
57.00
35.96
92.96
0.16
1.43
0.94
1.44
3.97
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
YES
57.00
105.09
162.09
2.17
1.43
3.22
4.20
(2.08)
8.94
4
INCIN-
ERATION
TOP
YES
57.00
61.22
118.22
0.16
1.43
1.25
2.45
5.29
Unit Operating Expenses ($/Gal)
- Gasoline Only
Pre Control
Post Control
Increase/ (Decrease)
.02670
.02652
(.00018)
.02670
.02666
(.00004)
.02670
.03184
.00514
.02670
.02942
.00272
.02670
.03282
.00612
.02670
.03032
.00362
NO PASS THROUGH CASE
(Thousand dollars)
ROI Impact
Bulk Plant Revenue
Expenses-Pre Control
Expenses-Vapor ControV
Net Income-Post Control
ROI
66.70
(54.90)
(0.83)
10.77
17.75%
66.70
(54.90)
(2.71)
8.89
13.28%
66.70
(54.90)
(28.15)
(16.35)
___
66.70
(54.90)
(13.27)
(1.47)
___
66.70
(54.90)
(36.11)
(24.31)
_
66.70
(54.90)
(21.12)
(9.32)
% Increase/(Decrease) over
Pre Control Case
1
(13.6%) (35.3%)
^Gasoline'Throughput - 4,000 gallons/day
^Target Tariff = $.03238/gallon
Includes principle and interest payments for vapor control equipment
G.20
-------
TABLE G.9 (continued)
VAPOR CONTROL
COSTS (HOUSTON-GALVESTON) AT SMALL BULK PLANTS
(Thousand dollars)
FULL PASS THROUGH CASE
OPTION
TYPE PRIMARY
SYSTEM
TYPE LOADING
BACK-UP SYSTEM
Capital Recovery Requirement
Pre Control
2
Vapor Control
Total Capital Recovery
Operating Expenses
Pre Control
Vapor Control
Total Expenses-Post Control
Gasoline Tariff ($/Gal)
Pre Control
Vapor Control Capital
Recovery
Vapor Control
Operating Expenses
Gasoline Tariff-Post
Control
% Increase/ (Decrease) over
1
BALANCE
Incoming
TT Only
TOP
NO
11.70
1.01
12.71
54.90
(0.27)
54.63
.03238
.00069
(.00018)
.03289
1 .6%
3
BALANCE
Incoming
& Outgoing
Truclcs
TOP
NO
11.70
2.55
14.25
54.90
(0.06)
54.84
.03238
.00175
(.00004)
.03409
5.3%
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
NO
11.70
19.04
30.74
54.90
7.51
62.41
.03238
.01304
.00514
.05056
56.1%
4
INCIN-
ERATION
TOP
NO
11.70
8.58
20.28
54.90
3.97
58.87
.03238
.00588
.00272
.04098
26.6%
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
YES
11.70
25.06
36.76
54.90
8.94
63.84
.03238
.01716
.00612
.05566
71.9%
4
INCIN-
ERATION
TOP
YES
11.70
14.60
26.30
54.90
5.29
60.19
.03238
.01000
.00362
.04600
42.1%
1
20% BFIT, 20 years
10% BFIT, 10 years
G.21
-------
TABLE G.9 (continued)
VAPOR CONTROL COSTS (HOUSTON-GALVESTON) AT SMALL BULK PLANTS
(Thousand dollars)
COMPETITIVE PASS THROUGH CASE
OPTION
TYPE PRIMARY
SYSTEM
TYPE LOADING
BACK-UP SYSTEM
Gasoline Tariff ($/Gal )
Pre Control
Capital Recovery-Most
Efficient Unit
Operating Expense-Most
Efficient Unit
Gasoline Tariff-Post
Control
% Increase/ (Decrease) over
Pre Control Case
ROI Impact
Bulk Plant Revenue
Expenses-Pre Control
2
Expenses- Vapor Control
Net Income- Post Control
1
BALANCE
Incoming
TT Only
TOP
NO
.03238
.00014
(.00032)
.03220
(0.6%)
66.44
(54.90)
(0.83)
10.51
3
BALANCE
Incoming
& Outgo-
ing Trucks
TOP
NO
.03238
.00042
(.00046)
.03234
(0.1%)
66.44
(54.90)
(2.71)
8.83
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
NO
.03238
.00268
(.00017)
.03489
7.8%
66.44
(54.90)
(28.15)
(12.68)
4
INCIN-
ERATION
TOP
NO
.03238
.00125
.00057
.03420
5.6%
66.44
(54.90)
(13.27)
.99
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
YES
.03238
.00351
.00009
.03598
11.1%
66.44
(54.90)
(36.11)
(19.05)
4
INCIN-
ERATION
TOP
YES
.03238
.00207
.00075
.03520
8.7%
66.44
(54.90)
(21 .12)
(5.20)
ROI
17.32%
13.19%
1.17%
% Increase/(Decrease) over
Pre Control Case (15.7%) (35.8%)
(94.3%)
2 Based on above gasoline tariffs
Includes principle and interest payments for vapor control equipment
G.22
-------
TABLE G.10
VAPOR CONTROL COSTS (COLORADO APCD) AT SMAL
1 BULK PLANTS1
(Thousand dollars)
C-VrfW
TT-f; PRIMARY
SYSTEM
TYPE LOADING-
BACK-UP SYSTEM
Current Investment
A;!ded Vapor Control
Investment
Total Investment-Post
Control
V :r Control Operating
xpenses
Utilities
Labor
M & R
Mis. , Taxes, Ins. , G &
Recovery Credit
Mat Expenses
1
BALANCE
Incoming
TT Only
TOP
NO
57.00
1.70
58.70
--
--
0.05
A 0.07
(0.51)
(0.39)
3
BALANCE
Incoming
& Outgo-
ing Trucks
TOP
NO
57.00
3.84
60.84
--
0.12
0.15
(0.81)
(0.54)
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
NO
57.00
72.99
129.99
2.17
1.43
2.71
2.92
(2.19)
7.04
4
INCIN-
ERATION
TOP
NO
57.00
29.10
86.10
0.16
1.43
0.74
1.16
__
3.49
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
YES
57.00
98.23
155.23
2.17
1.43
3.02
3.93
(2.08)
8.47
4
"- - ' i i .-
INCIN-
ERATION
TOP
YES
57.00
54.36
109.36
0.16
1.43
3.05
2.17
_ _
4.81
I;:PC Operating Expenses ($/Gal )
- Gasoline Only
Pre Control
Post Control
Increase/ (Decrease)
.02670
.02643
(.00027)
NO PASS
.02670
.02633
(.00037)
.02670
.03152
.00482
.02670
.02909
.00239
.02670
.03250
.00580
.02670
.02999
.00329
THROUGH CASE
(Thousand dollars)
ROI Impact
2
Bulk Plant Revenue
Expenses-Pre Control
Expenses-Vapor Control
Net Income-Post Control
R9I
66.70
(54.90)
3 (0.05)
11.55
19.85%
66.70
(54.90)
(0.45)
11.15
18.49%
66.70
(54.90)
(25.91)
(14.11)
66.70
(54.90)
(11.01)
0.59
0.8%
66.70
(54.90)
(33.87)
(22.07)
66.70
(54.90)
(18.86)
(7.06)
Increase/(Decrease) over
Pre Control Case
(96.1%)
(3.4%) (10.0%)
^Gasoline Throughput - 4,000 gallons/day
^Target Tariff = $.03238/gallon
Includes principle and interest payments for vapor control equipment
G.23
-------
TABLE G.10 (continued)
VAPOR CONTROL COSTS (COLORADO APCD) AT SMALL BULK PLANTS
(Thousand dollars)
FULL PASS THROUGH CASE
OPTION
TYPE PRIMARY
SYSTEM
TYPE LOADING
BACK-UP SYSTEM
Capital Recovery Requirement
Pre Control
2
Vapor Control
Total Capital Recovery
Ope rating Expenses
Pre Control
Vapor Control
Total Expenses-Post Control
Gasoline Tariff ($/Gal)
Pre Control
Vapor Control Capital
Recovery
Vapor Control
Operating Expenses
Gasoline Tariff- Post
Control
* Increase/ (Decrease) over
Pre Control Case
1
BALANCE
Incoming
TT Only
TOP
NO
11.70
0.41
12.11
54.90
(0.39)
54.51
.03238
.00028
(.00027)
.03239
0.0%
3
BALANCE
Incoming
& Outgoing
Trucks
TOP
NO
11.70
0.92
12.62
54.90
(0.54)
54.36
.03238
.00063
(.00037)
.03264
0.8%
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
NO
11.70
17.41
29.11
54.90
7.04
61.94
.03238
.01192
.00482
.04912
51.7%
4
INCIN-
ERATION
TOP
NO
11.70
6.94
18.64
54.90
3.49
58.39
.03238
.00475
.00239
.03952
22.1%
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
YES
11.70
23.43
35.13
54.90
8.47
63.37
.03238
.01605
.00580
.04523
67.5%
4
INCIN-
ERATION
TOP
YES
11.70
12.96
24.66
54.90
4.81
59.71
.03238
. 00888
.00329
.04455
37.6%
1
20* BFIT, 20 years
-20% BFIT, 10 years
G.24
-------
TABLE G.10 (continued)
VAPOR CONTROL COSTS (COLORADO APCD) AT SMALL BULK PLANTS
(Thousand dollars)
COMPETITIVE PASS THROUGH CASE
OPTION
TYPE PRIMARY
SYSTEM
TYPE LOADING
BACK-UP SYSTEM
Gasoline Tariff ($/Gal )
Pre Control
Capital Recovery-Most
Efficient Unit
Operating Expense-Most
Efficient Unit
1
BALANCE
Incoming
TT Only
TOP
NO
.03238
.00006
(.00034)
3
BALANCE
Incoming
& Outgo-
ing Trucks
TOP
NO
.03238
.00016
(.00051)
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
NO
.03238
.00242
(.00025)
4
INCIN-
ERATION
TOP
NO
.03238
.00501
.00049
4
REFRIG-
ERATION
VAPOR
CONTROL
TOP
YES
.03238
.00324
.00001
4
INCIN-
ERATION
TOP
YES
.03238
.00181
.00067
Gasoline Tariff-Post
Control
.03210
.03203 .03455
.03788 .03563 .03486
:v, Increase/(Decrease) over
Pre Control Case (0.9%) (1.1%)
6.7%
17.0%
10.0%
7.7%
.1
RQI Impact
Bulk Plant Revenue
Expenses-Pre Control
Expenses-Vapor Control
Net Income-Post Control
ROI
66.29
(54.90)
(0.05)
11.14
66.19
(54.90)
(0.45)
10.64
69.87
(54.90)
(25.91)
(10.94)
74.73
(54.90)
(11.01)
8.62
71.45
(54.90)
(33.87)
(17.32)
70.32
(54.90)
(18.86)
(3.44)
19.15%
17.65%
10.13
I Increase/(Decrease) over
Pre Control Case (6.8%)
(50.7%)
1
0Based on above gasoline tariffs nn+M-\ onm
2 Includes principle and interest payments for vapor control equi
G.25
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TECHNICAL REPORT DATA
(Please read Iiianicrions on the reverse before completing)
1 REPORT NO.
EPA 450/5-80-001
3. RECIPIENT'S ACCESSIO.VNO.
4. TITLE AND SUBTITLE
5. REPORT DATE
The Economic Impact of Vapor Control Regulations
on the Bulk Storage Industry
Final Report June 1979
6. PERFORMING ORGANIZATION CODE
7. AUTHOR(S)
Richard J. McCarthy
8. PERFORMING ORGANIZATION REPORT NO.
9. PERFORMING ORGANIZATION NAME AND ADDRESS
10. PROGRAM ELEMENT NO.
Arthur D. Little, Inc.
37 Acorn Park
Cambridge, Massachusetts
11. CONTRACT/GRANT NO.
02140
12. SPONSORING AGENCY NAME AND ADDRESS
Environmental Protection Agency
Office of Air Quality Planning and Standards
Research Triangle Park, NC 27711
13. TYPE OF REPORT AND PERIOD COVERED
Final
14. SPONSORING AGENCY CODE
IS. SUPPLEMENTARY NOTES
16. ABSTRACT
This report assesses economic impacts of several vapor control strategies
which would reduce the benzene emissions of the bulk storage industry. The
report seeks to:
o Identify and characterize the bulk storage industry
o Determine the number of facility closures expected to occur
because of the proposed vapor control regulations
o Estimate the employment levels displaced by these closures, and
o Calculate the national cost of installing and operating vapor control
systems in the remaining bulk storage population.
The U.S. Environmental Protection Agency (EPA) has analyzed alternative
regulations which would control total benzene emissions on a national basis.
A significant portion of these benzene emissions is contained in the gasoline
vapors released during the normal gasoline transfer operations of petroleum bulk
terminals and bulk plants. Possible strategies for controlling benzene in the
bulk storage industry include the on-site collection and disposal of gasoline
vapors and the collection and transportation of these vapors to a common or
central point within the gasoline marketing network for ultimate disposal.
17.
KEY WORDS AND DOCUMENT ANALYSIS
DESCRIPTORS
1 Benzene Emissions
Gasoline Bulk Terminals
; Gasoline Bulk Plants
j Marine Terminals
* Service Stations
1 Vapor Recovery Systems
j Gasoline Marketing
Socio-Economic Fac
National VOC Emiss
Economic Impacts
Tank Trailer Vehic
b.lDENTIFIERS/OPEN ENDED TERMS
ors Vapor Control
ons Regulations, bulk
Gasoline Storage/
es Marketing Network
COSAPi Held/Croup
I'i. DISTRIBUTION STATEMENT
j Available from NTIS
] Release Unlimited
19. SECURITY CLASS (This Report)
Unclassified
21. NO. OF PAGtS
256
20. SECURITY CLASS (This page}
Unclassified
22. PRICE
-J'A Form 22ZO-1 J9-73)
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