United States	Region IV	EPA 904/9-79-033
Environmental Protection	Air Programs Branch	March 1979
Agency	Atlanta, Georgia 30308
Air
SEPA
Economic Impact
of Implementing
RACT Guidelines in
the State of Georgia

-------
EPA 904/9-79-033
FINAL REPOR
IT

r;;^ {	!f
iya$2fi'' sobes
ECONOMIC IMPACT OF IMPLEMENTING RACT
GUIDELINES IN THE STATE OF
GEORGIA
TASK ORDER NUMBER 6 UNDER:
Basic Ordering Number 68-02-2544
RESEARCH AND DEVELOPMENT SERVICES FOR ASSISTANCE
TO STATES AND EPA CARRYING OUT REQUIREMENTS
OF CLEAN AIR ACT AND APPLICABLE FEDERAL
AND STATE REGULATIONS
U.S. ENVIRONMENTAL PROTECTION AGENCY REGION IV
Air and Hazardous Materials Division
Atlanta, Georgia
EPA PROJECT OFFICER: Winston Smith
Prepared for:
from:
BOOZ, ALLEN & HAMILTON Inc.
May, 1979

-------
This air pollution report is issued by Region IV of the
U.S. Environmental Protection Agency (EPA) , to assist state and
local air pollution control agencies in carrying out their
program activities. Copies of this report may be obtained, for
a nominal cost, from the National Technical Information Service,
5285 Port Royal Road, Springfield, Virginia 22151.
This report was furnished to the EPA by Booz, Allen &
Hamilton Inc. in fulfillment of Task Order Number 6 of Basic
Ordering Agreement Number 68-02-2544. This report has been
reviewed by EPA Region IV and approved for publication. Approval
does not signify that the contents necessarily reflect the views
and policies of the EPA, nor does mention of trade names or
commercial products constitute endorsement or recommendation
for use.
ii

-------
TABLE OF CONTENTS

-------
TABLE OF CONTENTS
CHAPTER	TITLE
1.0	EXECUTIVE SUMMARY
2.0	INTRODUCTION AND OVERALL
STUDY APPROACH
3.0	ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR CAN MANUFACTURING PLANTS
IN THE STATE OF GEORGIA
4.0	ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR THE SURFACE COATING OF
COILS IN THE STATE OF GEORGIA
(NOT PART OF THIS STUDY)
5. 0	ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR PLANTS SURFACE COATING
PAPER IN THE STATE OF GEORGIA
6.0	ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR PLANTS SURFACE COATING
FABRICS IN THE STATE OF GEORGIA
7.0	ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR SURFACE COATING OF
AUTOMOBILES IN THE STATE OF
GEORGIA
8.0	ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR SURFACE COATING OF METAL
FURNITURE IN THE STATE OF GEORGIA
9.0	ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR SURFACE COATING FOR
INSULATION OF MAGNET WIRES (NOT
PART OF THIS STUDY)
10.0	ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR SURFACE COATING OF
LARGE APPLIANCES IN THE STATE
OF GEORGIA
11.0	ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR SOLVENT METAL CLEANING
(DEGREASING) IN THE STATE OF
GEORGIA
ill

-------
TABLE OF CONTENTS
CHAPTER	TITLE
12.0	ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR CONTROL OF REFINERY
VACUUM PRODUCING SYSTEMS, WASTE-
WATER SEPARATORS AND PROCESS
UNIT TURNAROUNDS (NOT PART OF
THIS STUDY)
13.0	ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR TANK TRUCK GASOLINE
LOADING TERMINALS IN THE STATE
OF GEORGIA
14.0	ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR BULK GASOLINE PLANTS IN
THE STATE OF GEORGIA
15.0	ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR STORAGE OF PETROLEUM
LIQUIDS IN FIXED-ROOF TANKS IN
THE STATE OF GEORGIA
16.0	ECONOMIC IMPACT OF IMPLEMENTING
RACT STAGE I FOR GASOLINE SERVICE
STATIONS IN THE STATE OF GEORGIA
17.0	ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR USE OF CUTBACK ASPHALT
IN THE STATE OF GEORGIA
IV

-------
LIST OF EXHIBITS

-------
LIST OF EXHIBITS
Exhibit	Following Page
1-1	LISTING OF EMISSION LIMITATIONS THAT
REPRESENT THE PRESUMPTIVE NORM TO BE
ACHIEVED THROUGH APPLICATION OF RACT
FOR FIFTEEN INDUSTRY CATEGORIES	1-3
1-2	SUMMARY OF IMPACT OF IMPLEMENTING RACT
GUIDELINES IN 12 INDUSTRIAL CATEGORIES
—GEORGIA	1-7
1-3	ESTIMATED CHANGE IN ENERGY DEMAND
RESULTING FROM IMPLEMENTATION OF 12
RACT GUIDELINES IN GEORGIA	1-10
1-4 -	SUMMARY EXHIBITS OF THE FIFTEEN RACT
1-15	CATEGORIES	1-18
2-1	LISTING OF EMISSION LIMITATIONS THAT
REPRESENT THE PRESUMPTIVE NORM TO BE
ACHIEVED THROUGH APPLICATION OF RACT
FOR FIFTEEN INDUSTRY CATEGORIES	2-4
3-1	DATA QUALITY	3-5
3-2	LIST OF METAL CAN MANUFACTURING
FACILITIES POTENTIALLY AFFECTED BY
RACT IN GEORGIA	3-6
3-3	SHEET BASE COATING OPERATION	3-9
3-4	SHEET PRINTING OPERATION	3-9
3-5	CAN END, AND THREE-PIECE BEER AND
BEVERAGE CAN FABRICATING OPERATION	3-10
3-6	TWO-PIECE ALUMINUM CAN FABRICATING
AND COATING OPERATION	3-11
3-7	1977 EMISSIONS FROM CAN COATING OPERATIONS
IN GEORGIA	3-12
3-8	EMISSIONS FOR TYPICAL COATING OPERATION
USED IN THE MANUFACTURE OF TWO-PIECE CANS 3-12
3-9	COATING AND PRINTING OPERATIONS USED IN
THE MANUFACTURE OF THREE-PIECE CANS
(Sheet Coating Operation)	3-12
3-10	EMISSIONS OF TYPICAL COATING OPERATIONS
USED IN THREE-PIECE CAN ASSEMBLY	3-12
v

-------
11
12
13
14
15
16
17
18
1
2
3
4
5
6
¦7
Exhibit
Following Page
RACT GUIDELINES FOR CAN COATING OPERA-
TIONS	3-13
PERCENTAGE OF CANS MANUFACTURED USING
EACH ALTERNATIVE	3-14
EMISSIONS FROM COATING TWO-PIECE ALUMINUM
BEER AND SOFT DRINK CANS PER MILLION CANS 3-23
EMISSIONS FROM COATING THREE-PIECE CANS
PER MILLION CANS	3-23
COST OF IMPLEMENTING RACT ALTERNATIVES
FOR REPRESENTATIVE CAN MANUFACTURING
PLANTS	3-25
CALCULATION OF INFERRED PRODUCTION OF
CANS AND SHEET STOCK IN GEORGIA	3-25
COST OF COMPLIANCE TO RACT FOR THE CAN
MANUFACTURING INDUSTRY IN GEORGIA	3-25
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR CAN MANUFACTURING
PLANTS IN THE STATE OF GEORGIA	3-29
DATA QUALITY—SURFACE COATING OF PAPER	5-5
1976 INDUSTRY STATISTICS—SURFACE COATING
OF PAPER SIC GROUPS IN GEORGIA	5-6
HISTORICAL TRENDS IN VALUE OF SHIPMENTS
OF U.S. PLANTS ENGAGED IN PAPER COATING	5-7
EMISSION DATA FROM TYPICAL PAPER
COATING PLANTS	5-8
COMPANY ESTIMATES OF PAPER COATING EMIS-
SIONS AS REPORTED TO BOOZ, ALLEN AND
HAMILTON	5-10
ACHIEVABLE SOLVENT REDUCTIONS USING LOW
SOLVENT COATINGS IN PAPER COATING INDUSTRY 5-11
CARBON ADSORPTION COSTS FOR PAPER
COATING INDUSTRY	5-15
VI

-------
8
9
1
2
3
4
5
6
¦7
•8
•9
¦1
¦2
Exhibit	Following Page
SUMMARY OF ASSUMPTIONS USED IN ESTI-
MATING COST OF CARBON ADSORPTION
SYSTEM	5-16
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR PAPER COATERS
IN THE STATE OF GEORGIA	5-19
SURFACE COATING OF AUTOMOBILES DATA
QUALITY	7-4
LIST OF POTENTIALLY AFFECTED FACILITIES
BY THE RACT GUIDELINE FOR SURFACE COATING
OF AUTOMOBILES—GEORGIA	7-5
GEORGIA VOC EMISSION—SURFACE COATING
OF AUTOMOBILES	7-10
SELECTION OF THE MOST LIKELY RACT
ALTERNATIVES UNDER SCENARIO I (RACT
COMPLIANCE BY 1982)	7-13
SELECTION OF THE LIKELY RACT ALTERNATIVES
UNDER SCENARIO II (MODIFIED RACT TIMING
AND POSSIBLY LIMITATIONS)	7-13
ESTIMATED COST FOR MODEL PLANT TO MEET
AUTOMOBILE RACT REQUIREMENTS	7-18
STATEWIDE COSTS TO MEET THE RACT GUIDE-
LINES FOR AUTOMOBILE ASSEMBLY PLANTS	7-18
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT SCENARIO I FOR
AUTOMOBILE ASSEMBLY PLANTS IN THE
STATE OF GEORGIA	7-23
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT SCENARIO II FOR
AUTOMOBILE ASSEMBLY PLANTS IN THE
STATE OF GEORGIA	7-9
SURFACE COATING OF METAL FURNITURE
DATA QUALITY	8-4
LIST OF MANUFACTURERS POTENTIALLY
AFFECTED BY RACT GUIDELINES FOR SURFACE
COATING OF METAL FURNITURE IN GEORGIA	8-5
vii

-------
Exhibit
Following Page
8-3	SUMMARY OF HYDROCARBON EMISSIONS FROM
METAL FURNITURE MANUFACTURING FACILI-
TIES IN GEORGIA	8-6
8-4	EMISSION LIMITATIONS FOR RACT IN SURFACE
COATING OF METAL FURNITURE	8-6
8-5	RACT CONTROL OPTIONS FOR THE METAL FURNI-
TURE INDUSTRY	8-7
8-6	ESTIMATED COST OF CONTROL FOR MODEL
EXISTING ELECTROSTATIC SPRAY COATING LINES 8-8
8-7	STATEWIDE COSTS FOR PROCESS MODIFICATIONS
OF EXISTING METAL FURNITURE COATING LINES
TO MEET RACT GUIDELINES FOR VOC EMISSION
CONTROL	8-9
8-8	SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR SURFACE COATING
OF METAL FURNITURE IN GEORGIA	8-13
10-1	SURFACE COATING OF LARGE APPLIANCES DATA
QUALITY	10-5
10-2	LIST OF MANUFACTURERS, POTENTIALLY
AFFECTED BY RACT GUIDELINES, WHO SURFACE
COAT LARGE APPLIANCES IN GEORGIA	10-6
10-3	INDUSTRY STATISTICS—SURFACE COATING OF
LARGE APPLIANCES GEORGIA	10-6
10-4	COMPARISON OF LARGE APPLIANCE STATISTICS
WITH STATE OF GEORGIA ECONOMIC DATA	10-6
10-5	HISTORICAL U.S. SALES FIGURES—SELECTED
MAJOR HOUSEHOLD APPLIANCES FOR 1968-
1977	10-7
10-6	FIVE-YEAR U.S. SALES FORECAST FOR
SELECTED MAJOR HOUSEHOLD APPLIANCES
(1978-1982)	10-7
10-7	PRESENT MANUFACTURING TECHNOLOGY
DESCRIPTION	10-8
10-8	DIAGRAM OF A LARGE APPLIANCE COATING LINE 10-8
viii

-------
Exhibit
Following Page
10-9
10-10
10-11
10-12
10-13
10-14
10-15
10-16
11-lA
11-1
11-2
11-3
11-4
11-5
RACT DATA SUMMARY FOR ESTIMATED VOC
EMISSIONS FOR SURFACE COATING OF LARGE
APPLIANCES IN THE STATE OF GEORGIA	10-9
EMISSION LIMITATIONS FOR RACT IN THE
SURFACE COATING OF LARGE APPLIANCES	10-9
SUMMARY OF APPLICABLE CONTROL TECHNOLOGY
FOR COATING OF LARGE APPLIANCE DOORS, LIDS,
PANELS, CASES AND INTERIOR PARTS	10-9
RACT CONTROL OPTIONS FOR THE LARGE
APPLIANCE INDUSTRY	10-9
MOST LIKELY RACT CONTROL ALTERNATIVES FOR
SURFACE COATING OF LARGE APPLIANCES IN
THE STATE OF GEORGIA	10-10
ESTIMATED COST FOR PROCESS MODIFICATION
OF EXISTING LARGE APPLIANCE COATING LINES
TO MEET RACT GUIDELINES FOR VOC EMISSION
CONTROL	10-11
STATEWIDE COSTS FOR PROCESS MODIFICATIONS
OF EXISTING LARGE APPLIANCE COATING LINES
TO MEET RACT GUIDELINES FOR VOC EMISSION
CONTROL GEORGIA	10-12
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR SURFACE COATING
OF LARGE APPLIANCES IN THE STATE OF
GEORGIA	10-16
DATA QUALITY	11-13
ESTIMATED NUMBER OF VAPOR DEGREASERS
IN GEORGIA IN 12 COUNTY NON-ATTAINMENT
AREA OF GEORGIA	11-15
ESTIMATED NUMBER OF COLD CLEANERS IN
12 COUNTY NON-ATTAINMENT AREA OF GEORGIA	11-15
ESTIMATE OF AFFECTED SOLVENT METAL
CLEANERS IN GEORGIA	11-15
CONTROL SYSTEMS FOR COLD CLEANING	11-17
EPA PROPOSED CONTROL SYSTEMS FOR OPEN
TOP VAPOR DEGREASERS	11-17
ix

-------
Exhibit	Following Page
11-6	EPA PROPOSED CONTROL SYSTEMS FOR
CONVEYORIZED DEGREASERS	11-17
11-7	AVERAGE UNIT EMISSION RATES AND EXPECTED
EMISSION REDUCTIONS	11-19
11-8	ESTIMATED CURRENT AND REDUCED EMISSIONS
FROM SOLVENT METAL CLEANING IN GEORGIA	11-19
11-9	CONTROL COSTS FOR COLD CLEANER WITH
5.25 FT.2 AREA	11-20
11-10	CONTROL COSTS FOR AVERAGE-SIZED OPEN TOP
VAPOR AND CONVEYORIZED CLEANERS	11-20
11-11	ESTIMATED CONTROL COSTS FOR COLD CLEANERS
FOR THE STATE OF GEORGIA	11-2 0
11-12	ESTIMATED CONTROL COSTS FOR OPEN TOP
VAPOR DEGREASERS FOR THE STATE OF GEORGIA 11-20
11-13	ESTIMATED CONTROL COSTS FOR CONVEYORIZED
DEGREASERS FOR THE STATE OF GEORGIA	11-20
11-14	ESTIMATED NUMBER OF COLD CLEANERS NEEDING
CONTROLS IN THE STATE OF GEORGIA	11-20
11-15	ESTIMATED NUMBER OF OPEN TOP VAPOR
DEGREASERS NEEDING CONTROL IN THE STATE
OF GEORGIA	11-20
11-16	ESTIMATED NUMBER OF CONVEYORIZED DEGREASERS
NEEDING CONTROLS IN THE STATE OF GEORGIA	11-20
11-17	SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR SOLVENT METAL
DEGREASING IN THE STATE OF GEORGIA	11-23
13-1	DATA QUALITY	13-5
13-2	INDUSTRY STATISTICS FOR BULK GASOLINE
PLANTS IN GEORGIA	13-6
13-3	GASOLINE DISTRIBUTION NETWORK	13-6
13-4	DISTRIBUTION OF TANK TRUCK GASOLINE
LOADING TERMINALS BY AMOUNT OF THROUGHPUT
IN THE UNITED STATES	13-7
X

-------
5
6
7
8
9
1'
1
2
3
4
5
6
•7
•8
•9
Exhibit
Following Page
VOC EMISSIONS FROM TANK TRUCK GASOLINE
LOADING TERMINALS IN GEORGIA	13-8
VOC EMISSION CONTROL TECHNOLOGY FOR
TANK TRUCK GASOLINE LOADING TERMINALS	13-9
FACTORY COSTS OF ALTERNATIVE VAPOR
CONTROL SYSTEMS	13-12
DESCRIPTION AND COST OF MODEL TANK
TRUCK GASOLINE LOADING TERMINALS
EQUIPPED WITH VAPOR CONTROL SYSTEMS	13-13
STATEWIDE COSTS OF VAPOR CONTROL SYSTEMS
FOR TANK TRUCK GASOLINE LOADING TERMINALS 13-13
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR TANK TRUCK
GASOLINE LOADING TERMINALS IN GEORGIA	13-17
DATA QUALITY	14-6
INDUSTRY STATISTICS FOR BULK GASOLINE
PLANTS IN GEORGIA	14-7
GASOLINE DISTRIBUTION NETWORK	14-7
DISTRIBUTION OF BULK GASOLINE
PLANTS BY AMOUNT OF THROUGHPUT	14-8
VOC EMISSIONS FROM BULK GASOLINE PLANTS
IN GEORGIA	14-9
VOC EMISSION CONTROL TECHNOLOGY FOR BULK
GASOLINE PLANTS	14-10
ALTERNATIVE CONTROL METHODS FOR VAPOR
CONTROL AT BULK GASOLINE PLANTS	14-10
COSTS OF ALTERNATIVE VAPOR CONTROL
SYSTEMS	14-12
DESCRIPTION AND COST OF MODEL BULK PLANTS
EQUIPPED WITH VAPOR CONTROL SYSTEMS	14-13
GEORGIA COSTS OF VAPOR CONTROL SYSTEMS
FOR BULK GASOLINE PLANTS IN THE 12 COUNTY
AREA	14-14
STATEWIDE COSTS OF VAPOR CONTROL SYSTEM
BY SIZE OF BULK GASOLINE PLANT	14-14
XI

-------
Exhibit	Following Page
14-12	SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR BULK GASOLINE
PLANTS IN GEORGIA	14-20
15-1	DATA QUALITY	15-4
15-2	INSTALLED COST OF SINGLE SEAL FLOATING
ROOF TANKS	15-7
15-3	VOC EMISSIONS CONTROL COSTS FOR STORAGE
OF PETROLEUM LIQUIDS IN FIXED-ROOF TANKS
IN GEORGIA	15-7
15-4	SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR STORAGE OF
PETROLEUM LIQUIDS IN THE STATE OF
GEORGIA	15-8
16-1	DATA QUALITY	16-4
16-2	INDUSTRY STATISTICS FOR GASOLINE
SERVICE STATIONS IN GEORGIA	16-5
16-3	GASOLINE DISTRIBUTION NETWORK	16-6
16-4	U.S. RETAIL GASOLINE DISPENSING FACILITIES	16-6
16-5	U.S. PRIVATE GASOLINE DISPENSING FACILITIES	16-6
16-6	VOC EMISSIONS FROM GASOLINE	16-9
16-7	VOC EMISSION CONTROL TECHNOLOGY FOR
GASOLINE DISPENSING FACILITIES	16-9
16-8	STAGE I VAPOR CONTROL COSTS FOR A
TYPICAL RETAIL GASOLINE DISPENSING
FACILITY	16-11
16-9	STAGE I VAPOR CONTROL COSTS FOR A
TYPICAL GASOLINE DISPENSING TRUCK	16-12
16-10	NON-ATTAINMENT AREA COSTS FOR STAGE I
VAPOR CONTROL OF GASOLINE DISPENSING
FACILITIES	16-12
16-11	SUMMARY OFoDIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR GASOLINE DIS-
PENSING FACILITIES	16-17
xii

-------
Exhibit
Following Page
17-1	DATA QUALITY	17-4
17-2	HISTORICAL NATIONAL SALES OF ASPHALT
CEMENT, CUTBACK ASPHALT AND ASPHALT
EMULSIONS	17-6 ,
17-3	ESTIMATED HYDROCARBON EMISSIONS FROM
USE OF CUTBACK ASPHALT IN GEORGIA	17-9
17-4	COSTS IN GEORGIA FOR APPLYING RACT TO
THE USE OF CUTBACK ASPHALT	17-12
17-5	SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR USE OF CUTBACK
ASPHALT IN THE STATE OF GEORGIA	17-13
xiii

-------
1.	EXECUTIVE SUMMARY

-------
1.	EXECUTIVE SUMMARY
This chapter summarizes the major elements and most
significant findings of the study to determine the economic
impact of implementing Reasonably Available Control Tech-
nology (RACT) guidelines for volatile organic compounds for
twelve industrial categories in the state of Georgia. Further
discussion and data are presented in detail in the subsequent
chapters of the report. This Executive Summary is
divided into three sections:
Objectives, Scope and Approach
Statewide Aggregate Economic Impact for the
15 RACT Guidelines
Economic Implications of Each RACT Guideline.
1-1

-------
OBJECTIVES, SCOPE AND APPROACH

-------
1.1	OBJECTIVES, SCOPE AND APPROACH
The Clean Air Act Amendments of 1977 required the states
to revise their State Implementation Plans (SIPs) to provide
for the attainment and maintenance of national ambient air
quality standards in areas designated as nonattainment. The
Amendments require that each state submit the SIP revisions
to the U.S. Environmental Protection Agency (EPA) by January
1, 1979. These proposed regulations should contain an oxident
plan submission for major urban areas to reflect the applica-
tion of Reasonably Available Control Technology (RACT) to
stationary sources for which the EPA has published guidelines.
The Amendments also require that the states identify and analyze
the air quality, health, welfare, economic, energy and social
effects of the plan provisions.
1.1.1	Objectives
The major objective of the contract effort was to assist
the states in the determination of the direct economic impact
of selected segments of their SIPs for six states (Alabama,
Georgia, Kentucky, North Carolina, South Carolina and Tennessee)
of Region IV of the U.S. Environmental Protection Agency. These
studies will be used primarily to assist EPA decisions on achieving
emission limitations.
1.1.2	Scope
The scope of this project for Georgia was to determine
the costs and direct impacts of control to achieve RACT guide-
line limitations in twelve industrial categories. The impact was
addressed for each industry and for each state so that the
respective studies are applicable to individual state regula-
tions. Direct economic costs and benefits from the implementa-
tion of the RACT guidelines were identified and quantified.
While secondary (social, energy, employment, etc.) impacts
were addressed, they were not a major emphasis in the study.
In summary, direct economic impact analysis of each industrial
category was aggregated on a statewide basis for the RACT
categories studied.
1-2

-------
In Georgia, the economic impact was analyzed for the
implementation of RACT guidelines for the following 12 industry
categories:
Surface coating of metal cans
Surface coating of paper
Surface coating of fabrics
Surface coating of automobiles and light duty trucks
Surface coating of metal furniture
Surface coating of large appliances
Solvent metal cleaning
Bulk gasoline terminals
Bulk gasoline plants
Storage of petroleum liquids in fixed roof tanks
Service stations—Stage I
Use of cutback asphalt.
The major study guidelines in the determination of the
economic impact of the RACT guidelines are discussed below.
The emission limitations for each industrial
category was studied at the control level
established by the RACT guidelines. These are
presented in Exhibit 1-1, on the following page.
All costs and emisssion data were presented for
1977.
Emissions sources included were existing stationary
point sources in most^ of the applicable industrial
categories with VOC emissions greater than 5 pounds
in any hour or 50 pounds in any day in 12 counties
that were classified as non-attainment for ozone.2
In the rest of the state, only sources with greater
than 100 tons/year of potential VOC emissions were
included in the study.
1.	For two industrial categories (Service Stations and Solvent Metal Cleaning)
size characteristics were used as the basis for inclusion, rather than
emissions.
2.	The non-attainment counties included: Clayton, Cobb, Coweta, DeKalb,
Douglas, Fayette, Fulton, Gwinnett, Henry, Paulding, Rockdale, and
Muscogee (Columbus).
1-3

-------
EXHIBIT 1-1(1)
U.S. Environmental Protection Agency
LISTING OF EMISSION LIMITATIONS THAT REPRESENT
THE PRESUMPTIVE NORM TO BE ACHIEVED THROUGH
APPLICATION OF RACT FOR FIFTEEN INDUSTRY CATEGORIES
Category
RACT Guideline Emission Limitations3
Surface Coating Categories Based on
Low Organic Solvent Coatings (lbs.
solvent per gallon of coating, minus
water)
Surface Coating Of:
Cans
. Sheet basecoat (exterior and interior)
Overvarnish
Two-piece can exterior (basecoat and overvarnish)
. Two and three-piece can interior body spray
Two-piece can exterior end (spray or rollcoat)
. Three-piece can side-seam spray
. End sealing compound
Coils
. Prime and topcoat or single coat
Paper
Fabrics and vinyl coating
. Fabric
. Vinyl
Automobiles and Light Duty Trucks
. Prime application, flashoff and oven
. Topcoat application, flashoff and oven
. Final repair application, flashoff and oven
Metal Furniture
. Prime and topcoat or single coat
Magnet Wire
Large appliance
. Prime, single or topcoat
Solvent Metal Cleaning
Cold cleaning
Conveyorized degreaser
Open top degreaser
Petroleum Refinery Sources
. Vacuum producing systems
2.8
4.2
5.5
3.7
2.6
2.9
2.9
3.8
1.9
2.8
4.8
3.0
1.7
2.8
Provide cleaners with: cover; facility
to drain clean parts; additional free-
board; chiller or carbon absorber.
Follow suggested procedures to minimize
carryout.
Provide cleaners with: refrigerated chillers;
or carbon adsorption system; drying tunnel
or rotating basket; safety switches; covers.
Follow suggested procedures to minimize
carryout.
Provide cleaner with: safety switches;
powered cover; chiller; carbon absorber.
Follow suggested procedures to minimize
carryout.
No emissions of any noncondensible VOC
from condensers, hot wells or accumulators
to a firebox, incinerator or boiler.

-------
EXHIBIT 1-1(2)
U.S. Environmental Protection Agency
Category
. Wastewater separators
. Process unit turnaround
Bulk Gasoline Terminals
Bulk Gasoline Plants
Storage of Petroleum Liquids in Fixed
Roof Tanks
Service Stations (Stage I)
Use of Cutback Asphalt
RACT Guidelines Emission Limitations3-
Minimize emissions of VOC by providing
covers and seals on all separators and
forebays and following suggested operating
procedures to minimize emissions
Minimize emissions of VOC by depressurization
venting to vapor recovery, flare or firebox.
No emissions of VOC from a process unit
or vessel until its internal pressure
is 136 kilo Pascals (17.7 psia) or less
Equipment such as vapor control system
to prevent mass emissions of VOC from
control equipment to exceed 30 milligrams
per liter (.4.7 grains per gallon) of gaso-
line loaded
Provide submerged filling and vapor bal-
ancing or equivalent control to reduce
VOC emissions. Follow suggested procedures
to minimize vapor losses.
Provide single seal and internal floating
roof to all fixed roof storage vessels
with capacities greater than 150,000
liters (39,000 gal.) containing volatile
petroleum liquids for which true vapor
pressure is greater than 10.5 kilo
Pascals (.1-52 psia)
Provide submerged fill and vapor balance
for amy stationary storage tank located
at a gasoline dispensing facility with a
capacity of 7,500 liters (2,000 gal.) or
greater which is in place before January
1, 1979, or any stationary storage tank
located at a gasoline dispensing facility
with a capacity of 948 liters (250 gal.)
or more which is in place before January
1, 1978. Follow suggested procedure to
minimize vapor losses
The manufacture, mixing, storage, use
or application may be approved where:
long-life stockpile storage is necessary;
the use or application is an ambient tem-
perature less than 10°C (50°F) is necessary;
or it is to be used solely as a penetrating
prime coat
Note: An alternative scenario to the recommended RACT guidelines for surface coating
of automobiles is also studied. It assumes that the timing requirements and
possible limitations are modified to meet developing technologies.
a. Annotated description of RACT guidelines
Source: Regulatory Guidance for Control of Volatile Organic Compound Emissions from 15
Categories of Stationary Sources, U.S. Environmental Protection Agency, EPA-90512-
78-001, April 1973.

-------
Service stations, bulk plants, solvent metal
cleaning, and the use of cutback asphalt were
studied for the 12 non-attainment counties only.
The following volatile organic compounds were
exempted:
Methane
Ethane
Trichlorotrifluorethane (Freon 113)
1,1,1-trichloroethane (methyl chloroform).1
The timing requirement for implementation of con-
trols to meet RACT emission limitations was
January 1, 1981 for cutback asphalt and July 1,
1982 for the other industry categories.
The exemption status of methyl chloroform under these guidelines
may be subject to change.

-------
1.1.3 Approach
The approach applied to the overall study was: a study
team with technology and economic backgrounds utilized avail-
able secondary sources to estimate the emissions, statistics
and costs for each RACT industrial category; then, the study
team completed, calibrated and refined these estimates based
on interviews with industry representatives in the state.
Because of the number of point sources and the data
available in the state emission inventory, the methodology was
specific for each RACT industrial category studied. However,
the general methodology applied for two major classes of indus-
trial categories was:
Surface coating RACT industrial categories (cans,
fabrics, paper, automobles and light duty trucks,
metal furniture and large appliances)—The poten-
tially affected facilities and emissions were
obtained primarily from the Georgia Department of
Natural Resources and interviews. Therefore, the
following general methodology was applied:
A list of potentially affected facilities
was compiled from secondary reference sources.
Data from the Georgia emission inventory were
categorized and compiled for each RACT indus-
trial category by the Georgia Department of
Natural Resources.
Firms not listed in the emission inventory
were identified. All of these facilities
were then interviewed by the Georgia Depart-
ment of Natural Resources when there was
doubt concerning their inclusion.
Emissions, emission characteristics, control
options and control costs were studied for
relevant firms.
Interviews were conducted by Booz, Allen to
determine emissions (when not available),
applicable control options and potential
control costs.
The study team then evaluated the control cost
to meet the RACT requirements and the potential
emission reduction.
1-5

-------
Nonsurface coating RACT industrial categories (bulk
gasoline plants, bulk gasoline terminals and refin-
eries, service stations, fixed roof tanks and solvent
metal cleaning)—Each category either represented an
exhaustive list of potentially affected facities
or emissions data were not available (or categorized)
for these types of sources. Therefore, the following
generalized methodology was applied:
Industry statistical data were collected
from secondary reference sources.
The Georgia Department of Natural Resources
identified facilities which would be affected
by the proposed regulation for bulk gasoline
plants, terminals and fixed roof tanks.
Emissions were estimated by applying relevant
factors (e.g., emissions per facility or
throughput) which have been determined by
the EPA.
Control options and estimated costs to
meet the RACT guidelines were reviewed.
Interviews were conducted to determine
applicable associated control options
and the cost of control.
1.1.4 Quality of Estimates
The quality of the estimates that are presented in this
report can be judged by evaluating the basis for estimates
of the individual study components. In each of the chapters
that deal with the development of estimated compliance cost,
the sources of information are fully documented. In addition,
the study team has categorically ranked by qualitative judgment
the overall data quality of the major sources and, therefore,
of the outcomes. These data quality estimates were ranked into
three categories:
High quality ("hard data")—study inputs with
variation of not more than + 25 percent
Medium quality ("extrapolated data")—study
inputs with variation of + 25 to 75 percent
Low quality ("rough data")—study inputs with
variation of + 50 to 150 percent.
Each of these data quality estimates is presented in
the individual chapters. The overall quality ranking of the
study inputs for each RACT industrial category was generally
in the medium quality range.
1-6

-------
1.2 STATEWIDE AGGREGATE ECONOMIC IMPACT
FOR THE TWELVE RACT GUIDELINES

-------
1.2 STATEWIDE AGGREGATE ECONOMIC IMPACT
FOR THE TWELVE RACT GUIDELINES
The implementation of RACT emission limitations for 12
industrial categories in Georgia involves an estimated $182
million capital cost and $29 million annualized cost per
year. The net VOC emission reduction is estimated to be
43,000 tons annually from a 1977 baseline of 54,000 tons.
Exhibit 1-2, on the following page, presents a quantitative
summary of the emissions, estimated cost of control, cost
indicators and cost effectiveness of implementing RACT guide-
lines for 12 industrial categories.1
Approximately 6,750 facilities are potentially
affected by the 12 RACT guidelines in Georgia.
Ninety-eight percent of the potentially
affected facilities are represented by the
solvent metal cleaning (2,300 facilities)
and service station (.4, 325 facilities) in-
dustrial categories.
Less than 1 percent (26 facilities) of the
potentially affected facilities are repre-
sented by the six surface coating industrial
categories (cans, paper, fabrics, automobiles,
metal furniture and large appliances).
In 1977, the estimated annual VOC emissions (.in-
cluding those already controlled) for the 12
RACT industrial categories totalled approximately
54,000 tons.
Four gas marketing categories (tank truck
loading terminals, bulk gas plants, fixed
roof tanks and service stations) repre-
sented 51 percent of the total VOC
emissions.
Solvent metal cleaning represented 9 percent
of the total VOC emissions (from the 12 RACT
categories studied).
1 An alternative scenario for the surface coating of automobiles
is also presented in the text of Chapter 7. The EPA recommended
RACT limitations for automobile assembly plants represent a
waterborne topcoat system which would require extensive modi-
fication of the current production lines. Under the alterna-
tive scenario, it is assumed that RACT timing requirements
and possibly limitations are modified to meet developing
technologies that are more cost and energy effective.
1-7

-------
EXHIBIT 1-2
U.S. Environmental Protection Agency
SUMMARY OF IMPACT 0? IMPLEMENTING RACT
GUIDELINES IN 12 INDUSTRIAL CATEGORIES — GEORGIA
Emissions
Industry Category
Surface coating
of cans
Surface coating
of paper
Surface coating
of fabric*
Surface costing
of automobile®
Number of
Facilities
Potentially 1977 VOC
Affected Emissions
(tons/yr.)
6	3,210
13,700
Estimated VOC
Emissions
After
Implementing
RACT
(tons/yr.)
2,300
Net voc
Emission
Reductions
(tons/yr.)
2,390c
11,400
Coat of RACT Control
Cost Indicators
Capital
Cost*
Annualized
Cost as	Annualized
Percent of	Cost Per
Annualized Value of	Unit
Cost (credit) Shipments**	Shipment
Cost
Effectiveness
Annualized
Cost (credit)
Per Ton of VOC
Reduction
(S millions) ($ millions) (percent) (cost per unit) (S per tons/yr.)
1.5
0.5
0.2
SO.OOOl/can
545/auto
230
2,360
Surface coating of	3
ut&i furruture
Surface coating of	5
large appliances
Solvent metal	2,300
cleaning
Tank truck gas-	33
oline loading
terminals
Bulk gasoline	35
pLants
Storage of petro-	31
leuin liquids in
fixed roof tanks
Op To
(0.010)
Up To
(35)
34
3,700
2,040
147
196
1,100
19,356
586
2,238
0.150
$0.25/
household unit
Negligible
50.0049/gal. 225
-------
Use of cutback asphalt represented 5 percent
of the total VOC emissions.
Six surface coating categories represented
35 percent of the total VOC emissions.
The net emission reduction achievable by implementing
the 12 RACT guidelines is estimated to be approximately
43,000 tons annually. The approximate percent of the
total VOC emissions reduced by implementing RACT
by industrial category group is:
Gas marketing categories—53 percent of VOC
emission reduction
Surface coating categories—36 percent of
VOC emission reduction
Use of cutback asphalt—3 percent of VOC
emission reduction
Solvent metal cleaning category—3 percent
of VOC emission reduction.
The capital cost for the twelve industrial categories
to achieve the RACT guidelines is estimated to be
$182 million.
Approximately 88 percent of the total estimated
capital cost is for control of automobile
assembly plants. The capital required to
meet RACT guidelines for automobile surface
coating is estimated to be $160 million. (An
alternative scenario to the recommended RACT
limitations for automobiles was also studied.
This alternative scenario would represent an
estimated capital cost of $43 million.)
The four industrial categories dealing with
petroleum marketing (bulk gasoline plants
bulk gasoline terminals, fixed roof tanks
and service stations) account for approximately
$15 million (or 8 percent of the total) of
the estimated capital cost.
1-8
-------
The annualized cost of the twelve RACT industrial
categories to achieve the RACT guidelines is
estimated to be $29 million. The control of
automobile assembly plants is estimated to be
$27 million annualized cost (the alternative
scenario for auto assembly was an estimated
annualized cost of $6 million). In terms of
cost indicators, the annualized compliance cost
per value of shipments will have the largest effect
on the following industrial categories:
Paper coating—The annualized costs rep-
resent approximately 1.8 percent of the
1977 affected industry's value of ship-
ments.
Surface coating of automobiles—The
annualized compliance costs represent
approximately 0.9 percent of 1977 state-
wide value of shipments.
Bulk gasoline plants—The annualized
compliance costs represent approximately
0.5 percent of the 1977 statewide value of
shipments.
Technology developments and delivery of equipment
could present problems in achieving the 1982
timing requirements in some of the RACT guidelines.
The recommended RACT guidelines for
automobile assembly plants would require
a waterborne topcoating. Manufacturers
could not convert facilities on a nation-
wide basis to waterborne topcoat systems
by the 19 8 2 timeframe.
Low solvent coating technology requires
some further development for cost- or
energy-effective implementation of the
RACT guidelines in the following indus-
trial categories:
Surface coating of automobiles
Surface coating of large appliances
Surface coating of cans (end sealing
compound)
Surface coating of metal furniture
(full color line).
1-9
-------
Equipment delivery and installation of control
equipment were identified as potential prob-
lems on a nationwide basis in the following
industrial categories:
Surface coating of paper
Solvent metal degreasing
Tank truck gasoline loading terminals
Gasoline service stations.
The implementation of the RACT guidelines is
expected to create further concentration for
some industrial sectors requiring major capital
and annualized cost increases for compliance.
RACT requirements may have the effect of being
another contributing factor to the industry trends
of high throughput facilities in the following
RACT industrial categories:
Bulk gasoline plants
Service stations.
The annualized cost of compliance for the four
gasoline marketing categories is estimated to be
approximately $1 million. Assuming a "direct
cost pass-through" for the affected facilities
(the 12 non-attainment county area) the annual-
ized cost would represent a price increase of 0.1
cents per gallon. This cost analysis assumes
that vapors collected at the service station
are recovered eventually at bulk terminals and
refineries. To the extent that some service
stations having controls may purchase gaso-
line from bulk gasoline plants (outside the
12 county non-attainment area) without vapor
collection equipment, the product recovered may
be overstated.
The implementation of the RACT guidelines for
the twelve industrial categories is estimated
to represent a net energy savings of 16,600
equivalent barrels of oil annually as shown in
Exhibit 1-3, on the following page. Assuming
a value of oil at $13 per barrel, this is an
equivalent energy savings of $215,000 annually.
RACT compliance requirement for five
of the surface coating industrial cate-
gories (cans, paper, fabrics, metal furni-
ture and large appliances) represent a
net energy demand of approximately 3,500
equivalent barrels of oil annually.
1-10
-------
EXHIBIT 1-3
U.S. Environmental Protection Agency
ESTIMATED CHANGE IN ENERGY DEMAND RESULTING
FROM IMPLEMENTATION OF 12 RACT GUIDELINES IN GEORGIA
Industry Category
Surface coating of cans
Surface coating of paper
Surface coating of fabrics
Surface coating of automobiles
Surface coating of metal
furniture
Surface coating of large
appliances
Solvent metal cleaning
Tank truck gasoline loading
terminals
Bulk gasoline plants
Storage of petroleum
liquids in fixed
roof tanks
Service stations (STAGE I)
Use of cutback asphalt
TOTAL
Energy Demand Change
Increased (Decrease)
(Equivalent barrels of oil)
2,000
7, 300
150,000
(5,000)
(800)
Negligible
(125,000)
(4,000)
(13,000)
(26,000)
(2,900)
(16,600)
Energy Demand Change
Cost/(Savings)a
($ million)
0.026
0.095
1.95
(0.065)
(0.010)
Negligible
(1.625)
(0.052)
(0.169)
(0.337)
(0.37)
(0.215)
a. Based on the assumption that the cost of oil is $13 per barrel.
Source: Booz, Allen & Hamilton Inc.
-------
RACT compliance requirements for the four
industrial categories dealing with petroleum
marketing (service stations, bulk gasoline
terminals, bulk gasoline plants and tank
truck gas loading terminals) represent a
net energy savings of approximately 168,000
barrels of oil annually. However, the
feasibility of control efficiency has not
been totally demonstrated and these estimates
are likely to overstate the achievable
energy savings for bulk gasoline plants and
service stations.
RACT compliance requirements for automobile
assembly plants to convert to waterborne
topcoat represents a net energy demand of
approximately 150,000 equivalent barrels
of oil annually. However, the alternative
scenario studied is not energy intensive.
In 1977, the statewide value of shipments of the twelve
industrial categories potentially affected by RACT was $7.3
billion, which represents approximately 23 percent of Georgia's
total value of shipment of manufacturing goods. The estimated
annualized cost of implementing the RACT guidelines ($29 million)
represents 0.4 percent of the value of shipments for the twelve
RACT industrial categories affected. The annualized cost
represents 0.09 percent of the statewide total value of shipment
of all manufactured goods.
1-11
-------
ECONOMIC IMPLICATIONS OF EACH RACT GUIDELINE
-------
1.3 ECONOMIC IMPLICATIONS OF EACH RACT GUIDELINE
This section presents a summary of the economic impact
for each of the 12 RACT industrial categories studied.
Following this section is a series of summary exhibits which
highlight the study findings for each industrial category.
1.3.1	Surface Coating of Cans
Currently there are six major can coating facilities in
the state of Georgia. Three of the major can assembly plants
in Georgia are located near Atlanta.
The industry preferred method of control to meet the RACT
requirements is to convert to low solvent (waterborne) coatings.
However, low solvent coatings for end sealing compounds are
presently not available and may not be available by 1982. To
meet the RACT requirements, can manufacturers may convert three-
piece can lines to waterborne coatings or install thermal incin-
eration for controlling high solvent coatings. In addition,
some three-piece can facilities may convert to two-piece for
economic or market reasons which would have the effect of lower
VOC emissions.
Emission controls are expected to cost the industry $1.5
million in capital and $0.5 million in annualized cost. This
represents approximately 0.2 percent of the affected industry's
value of shipments. No major employment, productivity or
market structure changes are expected from the implementation
of the RACT guidelines.
The industry trend towards production of two-piece aluminum
cans with print-only coatings (rather than print and varnish)
is predicted to continue because of economic advantages and market
demands. The conversion to print-only technology will reduce
current VOC emissions. Because the industry is planning to
convert some facilities to print-only technology in the near
term, associated economic advantages of the conversion have
not been included in the economic analysis of the RACT require-
ments .
1.3.2	Surface Coating of Paper
This study covered nine plants identified from the RACT
requirements for paper coaters. Excluded from this study
are facilities engaged in publishing, who may coat paper as
a segment of the processing line. The study assumes that
these facilities would fall under other RACT guidelines
currently being developed, such as Graphic Arts. Further
definition of the paper coating category should be established
prior to enforcement.
1-12
-------
The retrofit situations and installation costs for add-
on controls-are highly variable. Based on these variations,
the estimated capital cost to the industry is between $3.4
million and $4.1 million, with an annualized cost of $0.4
million to $0.5 million (approximately 1.8 percent of the
statewide value of shipments).
Assuming 70 percent heat recovery, the annual energy
requirements are expected to increase by approximately
7,300 equivalent barrels of oil per year. Energy consumption
may decrease if further efficient recovery of incinerator heat
is possible.
Incinerator equipment manufacturers have stated that
there may be significant problems in meeting the anticipated
demand for high heat recovery incinerators on a nationwide
basis.
1.3.3. Surface Coating of Fabrics
None of fabric coating facilities in Georgia are antici-
pated to incur major economic costs to meet the RACT require-
ments. A preliminary list of 43 facilities were identified
as potentially being affected by the RACT requirements.
Interviews with all of these firms revealed that either the
facilities would not be subject to the RACT requirements (i.e.,
they were not coaters of fabric or they utilized spray or
extrusion methods of coating) or the facilities utilized latex
coating materials. Therefore, although there may be some
associated costs for RACT compliance (monitoring, recordkeeping,
etc.) no major costs or emission reductions are anticipated
for this RACT industrial category.
1.3.4	Surface Coating of Automobiles
There are two major companies operating three automobile
assembly plants in Georgia. Of all states, Georgia ranks sixth
in automobile production. The EPA recommended RACT guidelines
would require conversion to waterborne paints. However, the
EPA is currently considering some modifications of the RACT
requirements for automobile assembly plants. Therefore, two
scenarios of RACT guidelines were studied:
Scenario I—Current RACT limitations implemented by
1982. Under this scenario it is assumed that automobile
assembly plants will convert facilities to the following
available paint technologies to meet the RACT requirements:
Cathodic electrodeposition for prime coat
Waterborne enamels for topcoat
High solids enamels for final repair.
1-13
-------
The implementation of these technologies would require
extensive modification to the three facilities in Georgia.
The capital required would be approximately $160 million.
The estimated annualized compliance cost is $27 million and
would represent an increased energy demand of approximately
150,000 barrels of oil annually. If this increased cost
were passed on directly, it would represent an increase in
price of $45 per automobile manufactured. These major modi-
fications would require approximately three to four years
for completion; and, although possibly achievable in Georgia,
all assembly plants in the U.S. could not convert to these
technologies by 1982.
Scenario II—RACT timing requirements and possibly
limitations are modified to meet developing technologies.
Under this scenario it is assumed that automobile assembly
plants will develop and apply the following paint technologies:
Cathodic electrodeposition for prime coat
High solids enamels, urethane enamels, powder
coating or equivalent technologies for topcoat
High solids enamels for final repair.
The major area of modification in this scenario is the
technology applied for topcoat paints. Under this scenario, it
it assumed that the RACT limitations could not be achieved by
the 1982 timeframe. It is assumed that manufacturers currently
using enamel paints would develop higher solids enamels that
would approach or achieve the emission reduction of waterborne
paints. The capital requirements for Scenario II are estimated
to be $4 3 million. The estimated annualized compliance cost
is $6 million. If this increased cost were passed on directly,
it would represent an increase in price of $10 per automobile
manufactured.
1.3.5	Surface Coating of Metal Furniture
There are three facilities in Georgia identified as
manufacturers and coaters of metal furniture, which would
be affected by the proposed limitations for the RACT indus-
trial category. None of the facilities currently have
controls which would meet the proposed limitations.
To meet the RACT requirements, these facilities will
need to invest approximately $260,000 in capital, and
the annualized savings of control could be up to $10,000.
No significant productivity, employment or market
structure dislocations should be associated with the imple-
mentation of the RACT guidelines.
1-14
-------
To meet the RACT requirements, the low solvent coating
materials may not totally be available in the quality,
color variety or specifications of each of the manufacturers.
The development of totally suitable coating materials (or
changes in current manufacturing requirements) is the key to
successful implementation of the RACT requirements within
the given time limitations.
1.3.6	Surface Coating of Large Appliances
There are five large appliance manufacturing facilities
in Georgia, but only one is expected to be affected by the RACT
guidelines. This manufacturer would be required to invest approxi-
mately $75,000 in capital and incur additional annualized costs
of $35,000 (approximately 0.05 percent of industry statewide value
of shipments).
Assuming a "direct cost pass-through," the cost increase
for household appliances relates to a price increase of approxi-
mately $0.25 per unit. No major productivity, employment or
market structure dislocations appear to be associated with
implementation of the RACT guidelines.
The high solids (greater than 62 percent by volume) top-
coat application technique preferred by the industry has not
been proven under normal operating conditions although it
appears to be technically feasible.
1.3.7	Solvent Metal Cleaning
This category includes equipment to clean	the surface
for removing oil, dirt, grease and other foreign material by
immersing the article in a vaporized or liquid	organic solvent.
The cleaning is done in one of three devices:	a cold cleaner,
an open top vapor degreaser, or a conveyorized	degreaser. This
type of cleaning is done by many firms in many	different types
of industries.
Implementation of the proposed RACT guidelines for the
12 county areas in Georgia will affect an estimated 2,300
facilities. The regulation is expected to have a negligible
economic effect on industry because of the relatively minor
changes required. For Georgia, the 2,300 facilities poten-
tially affected represent a capital cost of $1.1 million and
an annualized cost of $0.14 million (<0.01 percent of industry
value of shipments).
Because of the large number of degeasers nationwide that
require retrofit to meet RACT and the inability of manufacturers
to provide equipment on such a large scale, it is doubtful if
all degreasers nationwide can be retrofitted within the 1982
timeframe.
No major productivity, employment and market structure
dislocations will result from RACT implementation.
1-15
-------
1.3.8	Tank Truck Gasoline Loading Terminals
There are 33 facilities identified in the state of
Georgia as tank truck gasoline loading terminals and affected
by the limitation requirements. Emission control of these
facilities is expected to require a capital investment of
$6.0 million. Product recovery of gasoline will be accrued
to bulk terminal operations not only from bulk terminal
emission control installations but also from the recovery
of vapors from service stations and bulk gasoline plants.
This recovery represents an annual product savings of over
$34 million. Based on this savings, the net annualized
credit for implementation of RACT for bulk gasoline loading
terminals is estimated to be $40,000.
No significant productivity, employment or market
structure dislocations should be associated with implementing
the RACT guidelines.
1.3.9 Bulk Gasoline Plants
This industry is characterized by many small plants.
Of these plants, only a few percent are either new or modern-
ized. The majority of the plants are over 20 years old.
Most bulk plants are located in rural areas where imple-
mentation of RACT to stationary sources is not required in
the state of Georgia.
To meet the RACT requirements, 35 bulk gas plants in
the nonattainment areas must be equipped with vapor balance
and submerged fill systems. This recommended control system
is not cost-effective for the bulk plant operator as most of
the economic credit (for recovered vapors) would be accrued
to a bulk terminal or refinery.
The estimated capital cost and annualized cost to meet
compliance requirements for the 35 facilities represent $0.5
million and $0.13 million (approximately 0.5 percent of affected
industry's value of shipments), respectively. The compliance
costs may create market price increase. For these facilities,
the price of gasoline (assuming a "direct cost pass-through")
would be increased $0,005 per gallon. Because of the compet-
itiveness and low profit structure in the industry, further
cost increases could force some marginal operations out of the
business, thus further concentrating the market structure.
In urban areas, the bulk gasoline plant markets have been
declining because of competition from retailers and tank truck
terminals, and will continue to decline regardless of the RACT
guidelines.
1-16
-------
1.3.10 Storage of Petroleum Liquids in Fixed Roof Tanks
There are an estimated 31 fixed roof tanks (27 in the
12 county nonattainment areas) in the state of Georgia
which would have to be equipped with a internal floating roof
to comply with the proposed RACT requirements. These VOC
emissions (1977) for these tanks are estimated to be over
2,100 tons.
These tanks are primarily owned by major oil companies
and bulk gasoline tank terminal companies. The capital cost
to equip these tanks with a single seal floating roof is
estimated to be $2.1 million. The estimated annualized cost
is $0.3 million, which would represent a price increase
(assuming "direct cost pass-through") of less than $0,001
per gallon of throughput.
No significant productivity, employment or market struc-
ture changes should be associated with the implementation of
the RACT guideline.
Implementation of the RACT guideline is estimated to
represent a net energy savings of $17,000 equivalent barrels
of oil annually (assuming 90 percent control efficiency).
1.3.11 Service Stations
There are approximately 4,300 service stations located
in the 12 county nonattainment areas of Georgia. The
implementation of submerged fill and vapor balancing at these
stations is estimated to be $2.5 million in capital. In
addition, tank trucks supplying these stations must be equipped
with appropriate vapor control modifications for top submerged
fill or bottom fill. The capital cost to equip the existing
fleet (not including those tanks owned by the affected bulk
plant and terminal RACT requirements) is estimated to be $0.2
million. Therefore, the total capital requirement is estimated
to be $2.7 million and the annualized cost is estimated to be
$0.53 million. This annualized cost represents an average
cost increase of approximately $0,001 per gallon; however,
larger stations will experience a much smaller unit cost
increase. The service stations could experience loss of
business while vapor control systems are being installed.
Implementation of the RACT guidelines may accelerate the
trend to high throughput stations because of the increasing
overhead costs. However, the RACT guidelines will not cause
major productivity and employment dislocations to the industry
as a whole.
1-17
-------
It is estimated that implementing RACT guidelines for
service stations in Georgia will result in a net energy
savings equivalent to 26,000 barrels of oil per year,
assuming 95 percent recovery of gasoline- This assumed
control efficiency has not been fully demonstrated. Only
a small percent of the economic benefit from the recovered
gasoline vapors will directly accrue to the service stations.
1.3.12 Use of Cutback Asphalt
In 1977, it is estimated that 12,800 tons of cutback
asphalt was utilized in the nonattainment areas of Georgia.
Replacement of the solvent-based asphalt with asphalt emulsion
will cause no dislocation in employment or worker productivity.
Capital and training cost investment is estimated at $60,000.
No change in paving costs are expected from the implementation
of the RACT guideline.
It is anticipated that sufficient lead time is available
to assure an adequate supply of asphalt emulsion to meet the
increased demand and provide training for municipal employees.
* * * *
A summary of the direct economic implications of imple-
menting RACT in each of the 12 industrial categories studied
is presented in Exhibits 1-4 through 1-15, on the following
pages.
1-18
-------
EXHIBIT 1-4
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR CAN MANUFACTURING
PLANTS IN THE STATE OF GEORGIA
Current Situation
Numoer of potentially affected facilities
Indication of relative importance of indus-
trial section to state economy
Current industry technology trends
VOC emissions
Industry preferred method of VOC control
to meet RACT guidelines
Discussion
There are six can manufacturing
facilities
The 1977 value of shipment was about
$290 million.
Beer and beverage containers rapidly
changing to two-piece construction
3,200 tons per year
Low solvent coatings (waterborne) with
incineration as an interim approach for
older facilities
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
Problem area
VOC emission after control
Cost effectiveness of control
$1.5 million
$10.5 million
Assuming a direct pass-through of costs,
no significant change in price
2,000 equivalent barrels of oil annually
to operate incinerators
No major impact
No ma3or impact
Accelerated technology conversion to
two-piece cans
Low solvent coating technology for end
sealing compound
820 tons per year (25 percent of current
emission level)3
$230 annualized cost/annual ton of VOC
reduction from current level of control
a. This represents emission after control due to RACT and industry changes to print-only
(not resulting from RACT), 330 tons of the reduction is credited to print-only change.
Source: Booz, Allen & Hamilton Inc.
-------
EXHIBIT 1-5
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR PAPER COATERS
IN THE STATE OF GEORGIA
Current Situation
Number of potentially affected
facilities
Indication of relative importance
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of control to meet
RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Discussion
Three plants in Georgia are expected to
suffer major impact under these regula-
tions. However, if this category is
interpreted to include all types of paper
coating, including publishing, far more
firms would be affected
The 1977 value of shipments of these is
estimated to be $25 million. These
plants are estimated to employ 300
employees
Gravure coating replacing older systems
Approximately 1,411 tons per year were
identified from the emission inventory
Use of solventless systems is increas-
ing and several plants in Georgia have
converted to them
Thermal incineration with primary heat
recovery and carbon adsorption
Discussion
Estimated to be 3.4 million to 4.1 mil-
lion depending on retrofit situations.
This is likely to be more than 100
percent of normal expenditures for the
affected paper coaters
$385,000 to $505,000 annually. This
may represent 1.5 to 2.0 percent of
the 1977 annual sales for the affected
paper coaters
Assuming 70 percent heat recovery annua]
energy requirements are expected to in-
crease by approximately 7,000 equivalent
barrels of oil annually
No major impact
Assuming a "direct cost pass-through"—
.1.5 to 2.0 percent
-------
EXHIBIT 1-5 (2)
U.S. Environmental Protection Agency
Affected Areas in Meeting RACT
Employment
Market structure
RACT timing requirements (1982)
Problem areas
VOC emissions after control
Cost effectiveness of control
Discussion
No major impact
No major impact
RACT guideline needs clear definition
for rule making
Nationwide equipment deliverables and
installation of incineration systems
prior to 1982 are expected to present
problems
Retrofit situations and installation
costs are highly variable
Type and cost of control depend on
particular solvent systems used and
reduction in air flow
270 tons/year (20 percent of 1977 VOC
emission level)
$350-$460 annualized cost/annual ton
of VOC reduction
Source: Booz, Allen & Hamilton Inc.
-------
EXHIBIT 1-6
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT SCENARIO I FOR
AUTOMOBILE ASSEMBLY PLANTS IN THE
STATE OF GEORGIA
SCENARIO I
(.RACT Limitations
Implemented By 19821
Current Situation
Number of potentially affected facilities
Indication of relative importance of indus-
trial sector to state enconomy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC control
to meet RACT guidelines
Assumed method of control to meet RACT
guidelines
Discussion
Two companies operating three facilities
1977 value of shipments was approximately
53.5 billion, which represents approximately
10 percent of the state's manufacturing
industry. Of all states, Georgia ranks
sixth in automobile production
Prime coat—cathodic electrodeposition
topcoats—higher solids enamels for
manufacturers using enamel systems
13,700 tons per year
Cathodic electrodeposition for prime
coat; manufacturers with enamel topcoat—
high solids enamel; manufacturers with
lacquer topcoat—unkown
Cathodic electrodeposition for prime coat
Waterborne enamels for topcoat
High solids enamels for final repair
Affected Areas in Meeting RACT
Scenario I 	 	
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity and employment
Market structure
Discussion
S160 million (approximately 300 percent
of current annual capital expenditures
for the industry in the state).
527 million (approximately 0.9 percent of
the industry's 1977 statewide value of
3hipment31
Assuming a "direct cost pass-through"
approximately 545 per automobile manufac-
tured
Increase of 150,000 equivalent barrels
of oil annually primarily for operation
of waterborne topcoating systems
Conversion to waterborne systems would
require total rework of existing processing
lines. Major modifications would probably
increase efficiency and line speed of
older units.
Accelerated technology conversion to
electrodeposition primer coat.
-------
EXHIBIT 1-6 (2)
U.S. Environmental Projection Agency
SCENARIO I
(RACT Limitations
Implemented 3y 198 2)
Current Situation
Discussion
RACT timing requirements (1982)
VOC emission after RACT control
Conversion of all automobile assembly
plants to topcoating waterbcrne systems
cannot be achieved by 1982
Prime coat RACT limitations are based on
anodic electrodeposition systems and need
to be modified to reflect cathodic pro-
cessing. Topcoat RACT limitations are
based on waterborne coatings, which is not
a cost or energy effective alternative.
Final repair RACT limitations areas based
on high solids enamel technology which
would require major modifications for
manufacturers using lacquer systems
2,300 tons per year (17 percent of 1977
emission level)
Cost effectiveness of RACT control
$2,360 annualized cost/annual ton of
VOC reduction
Source: Booz, Allen S Hamilton Inc.
-------
EXHIBIT 1-7
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT SCENARIO II FOR
AUTOMOBILE ASSEMBLY PLANTS IN THE
STATE OF GEORGIA
SCENARIO II
(RACT Timing Requirements And
Possible Limitations Are Modified
To Meet Developing Technologies)
Current Situation
Number of potentially affected facilities
Indication of relative importance of indus-
trial section to state enconomy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC control
to meet RACT guidelines
Assumed method of control to meet RACT
guidelines
Affected Areas in Meeting 3ACT
	Scenario II	
Capital investment (.statewide)
Annualized cost (statewide)
Price
Energy
Productivity and employment
Market structure
PACT timing requirements
Problem area
VOC emission after RACT control
Cost effectiveness for RACT control
Discussion
Two companies operating three facilities
1977 value of shipments was approximately
$3.5 billion which represents approximately
10 percent of the state's manufacturing
industry. Of all states, Georgia ranks
sixth in automobile production
Prime coat—cathodic electrodeposition
topcoats—higher solids enamels for
manufacturers using enamel systems
13,700 tons per year
Cathodic electrodeposition for prime
coat; manufacturers with enamel topcoat—
high sales enamel; manufacturers with
lacquer topcoat—unknown
Cathodic electrodeposition for prime coat
High solids enamels, urethane enamels or
powder coating for topcoat
High solids enamel for final repair
Discussion
543 million (approximately 80 percent
of current annual capital appropriations
for the industry in the state).
56 million (approximately 0.2 percent of
the industry's 1977 statewide value of
shipments).
Assuming a "direct cost pass-through"
approximately $10 per automobile manufac-
tured
Dependent on technology applied
No major effect
No major effect—however, General Motors
is likely to have higher conversion costs
to developing technologies
Primer and final repair limitations could
be implemented at most facilities by 19 82
Topcoat limitations could be set at a 40
percent to 62 percent solids by 1985
dependent on technology developments
Limitations for topcoat are dependent
on technology development
2,300-5,300 tons per year (17 percent to
50 percent of 1977 emission levels dependent
on limitations).
5525-5870 annualized cost/annual
ton VOC reduction
Source: 3ooz, Alien & Hamilton Inc.
-------
EXHIBIT 1-8
U.S. Environmental Protection Agency
¦SUMMARY OF DIRECT ECONOMIC INPLICATIONS OF
IMPLEMENTING RACT FOR SURFACE COATING OF METAL
FURNITURE IN GEORGIA
Current Situation
Number of potentially affected
facilities
Indication of relative importance
of industrial section to state
economy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC
control
Assumed method of control to meet
RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized savings (statewide)
Price
Energy
Productivity
Employment
Market structure
RACT timing requirements (1982)
Problem area
VOC emissions after RACT
Cost effectiveness of RACT
Discussion
There are 3 metal furniture
manufacturing facilities
1977 value of shipments was
between $30 million and $60
million industry-wide and
approximately $18.5 million
for three affected facilities
Trend is towards the use of a
variety of colors
365 tons per year
Low solvent coatings
Low solvent coatings
Discussion
$264,000
Up to $]0,000
No major change
Savings of 5,000 equivalent barrels
of oil per year
No major impact
No major impact
No major impact
Companies using a variety of
colors may face a problem finding
suitable low solvent coatings
Low solvent coating in a variety
of colors providing acceptable
quality needs to be developed
80 tons per year (approximately
22 percent of current emissions
level)
Up to $35 annualized savings/
annual ton of VOC reduction
Source: Booz, Allen & Hamilton Inc.
-------
EXHIBIT 1-9
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR SURFACE COATING OF LARGE
APPLIANCES IN THE STATE OF GEORGIA
Current Situation
Discussion
Number of potentially affected
facilities
There are five major large appliance manufacturers
and coaters, only one of which will be affected
by the guidelines
Indication of relative importance
of industrial section to state
economy
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of VOC control to
meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
RACT timing requirements (1982)
Problem area
VOC emission after RACT control
Cost effectiveness of RACT control
1977 statewide value of shipments was estimated
at $75 million and represents 0.5 percent of
the estimated $15 billion U.S. value of shipments
of the major appliance industry
280 tons per year
Waterborne primecoat and high solids topcoat
Waterborne primecoat and high solids topcoat
Discussion
$150,000
$35,000 which represents 0.05 percent of the
industry's 1977 statewide value of shipments.
Assuming a "direct cost pass-through"—increase
of $0.25/unit for household appliances (based on
an average price of $240 per unit appliance)
Reduced natural gas requirements in the curing
operation (equivalent to 800 barrels of oil
per year)
No major impact
No major impact
No major impact
Some problem meeting equipment deliveries and
installation are anticipated if equipment
vendors are overloaded with orders
Commercial application of high solids (greater
than 62% by volume) has not been proven
84 tons/year (30 percent of 1977 emission
level)
$175 annualized cost/ton VOC reduction
Source: Booz, Allen & Hamilton, Inc.
-------
EXHIBIT 1-10
U.S. Environmental Projection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT TOR SOLVENT METAJ, DEGREASING
IN THE STATS OF GEORGIA1
Current Situation
Number of potentially affected facilities
Indication of relative importance of
industrial section to state economy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of VOC control to meet
RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
RACT timing requirements (1982)
Problem Areas
VOC emission after RACT control
Cost effectiveness of RACT control
Discussion
About 2,300 plants.
Value of shipments of firms in SIC groups
affected for nonattainment counties is in the
range of 3.6 billion, about 40% of the state
total for these SIC groups.
Where technically feasible, firms are
substituting exempt solvent.
4,800 tons/year. (Including solvents classified
as exempt)
Substitution. Otherwise lowest cost option as
specified by EPA will be used.
Equipment modifications as specified by the
RACT guidelines.
Discussion
$1.1 million.
$0.14 million, (less than 0.01 percent of the
1977 affected facilities value of shipments).
Metal cleaning is only a fraction of manu-
facturing costs; price effect expected to be
less than 0.01 percent for affected facilities.
Less than 150 equivalent barrels of oil per
year increase.
5-10 percent decrease for manually operated
degreasers. Will not affect conveyorized
cleaners.
No effect except a possible slight decrease in
firms supplying metal degreasing solvents.
No change.
Equipment availability—only a few companies
now supply the recommended control modifications.
No significant problem areas seen. Most firms
will be able to absorb cost.
3,700 tons/year (11 percent of 1977 VOC
emission level—however, this does not include
emission controls for exempt solvents.)
$127 annualized cost per ton of emissions reduced.
1. These estimates were computed for nonattainment counties only. These were Clayton, Columbus,
Cobb, Coweta, DeKalb, Douglas, Fayette, Fulton, Gwinett, Henry, Paulding and Rockdale. The
proposed regulation would also apply to solvent metal cleaning operations in facilities with
potential VOC emissions over 100 tons annually outside the 12 county nonattainment area.
Although no facilities outside the nonattainment areas were identified, there may be some
affected in the state by the proposed regulations.
Source: Booz, Allen & Hamilton, Inc.
-------
EXHIBIT 1-11
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR TANK TRUCK GASOLINE
LOADING TERMINALS IN GEORGIA
Current Situation	Discussion
Number of potentially affected	33
facilities
Indication of relative importance	1977 industry sales were 52.8 billion, with
of industrial section to state	annual throughput of 6.546 billion gallons,
economy
Current industry technology trends	New terminals will be designed with vapor
recovery equipment
20,400 tons per year
Submerge fill or bottom fill and vapor
recovery
1977 voc actual emissions
Industry preferred method of VOC
control to meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized credit (statewide)
Price
Energy
Productivity
Employment
Market structure
Problem area
VOC emission after control
Cost effectiveness of control
Discussion
$10,114 million
$0,039 million (approximately 0.001 percent
of value of shipment)
Assuming "full cost pass-through," no change
in price
Assuming full recovery of gasoline—net savings
of 125,382 barrels annually from terminal
emissions
No major impact
No direct impact
No direct impact
Full gasoline credit from vapors from bulk
gasoline plants and gasoline service
stations require uniform RACT requirements
throughout the state
2,000 tons per year
$1.71 annualized credit/annual ton of VOC
reduction from terminals assuming gasoline
credit from vapors returned from bulk gasoline
plants and gasoline service stations
Source: Booz, Allen & Hamilton Inc.
-------
Current Situation
EXHIBIT 1-12
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR
BULK GASOLINE PLANTS IN GEORGIA
Discussion
Number of potentially affected
facilities
35
Indication of relative importance
of industrial sector to state
economy
Current industry technology tends
1977 VOC actual emissions
Industry preferred method of VOC
control to meet RACT guidelines
1977 affected industry sales were $27
million, with annual throughput of 0.064
billion gallons.
Only small percent of industry has new/
modernized plants
730 tons per vear
Bottom fill and vapor balancing (cost analysis
reflects top submerged fill, not bottom fill)
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
Problem area
VOC emission after control
Cost effectiveness
Discussion
$500,000
$130,000 (approximately 0.45 percent of
value of shipments from those facilities affectt*.
Assuming a "direct cost pass-through"
12 county-wide—$0.0048 per gallon increase
Small operations—$0,005 to $0.01 per
gallon increase
Assuming full recovery of gasoline—net savings
of 4,000 barrels annually
No major impact
No direct impact; however for plants closing,
potential average of 6 jobs lost per plant
closed
Regulation could further concentrate a declining
industry. Many small bulk gas plants today are
marginal operations; further cost increase
could result in some plant closings
Severe economic impact for small bulk plant
operations. Regulation could cause further
market imbalances. Technical control feasi-
bility of cost effective alternatives has not
been effectively demonstrated
150 tons per year
$225 annualized cost/annual ton of
VOC reduction
Source: Booz, Allen & Hamilton Inc.
-------
Current Situation
Number of potentially affected
Storage tanks
Indication of relative impor-
tance of industrial section
to state economy
Current industry technology
trends
VOC emissions
Preferred method of VOC control
to meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost
(statewide)
Price
Energy
Productivity
Employment
Market Structure
Problem area
VOC emission after control
Cost effectiveness of control
EXHIBIT 1-13
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR STORAGE OF PETROLEUM
LIQUIDS IN THE STATE OF GEORGIA
Discussion
31
The annual throughput was an esti-
mated 455 million gallons
Internal floating roof tanks utiliz-
ing a double seal have been proven
to be more cost effective
2,138 tons per year
Single seal and internal floating
roof
$2.11 million
$0.3 million
Assuming a "direct cost pass-through:—
less than 0.1 cents per gallon
of throughput
Assuming 90 percent reduction of
current VOC level, the net energy
savings represent an estimated
savings of 17,000 equivalent barrels
of oil annually
No major impact
No major impact
No major impact
Potential availability of equipment
to implement RACT standard
238 tons per year
$144 annualized cost/annual ton
of VOC reduction
Source: Booz, Allen & Hamilton Inc.
-------
EXHIBIT 1-14
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR
GASOLINE DISPENSING FACILITIES
IN THE STATE OF GEORGIA
Current Situation
Discussior.
Number of potentially affected
facilities
Indication of relative importance
of industrial sector to county
economy
Current industry technology
trends
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of control to meet
RACT guidelines
Affected Areas in Meeting RACT
Capital investment (12 counties)
Annualized cost
(12 counties)
Price
Energy
Productivity
Employment
Market structure
4,325
12 county industry sales are $529
million with a yearly throughput of
1.04 billion gallons
Number of stations has been declining
and throughput per station has been
increasing. By 1980, one-half of
stations m U.S. are predicted to
become totally self-service
4,026 tons per year from tank loading
operation
Submerged fill and vapor balance
Submerged fill and vapor balance
Discussion
$2.7 million
$0,686 million (less than 0.1
percent of the value of gasoline sold)
Assuming a "direct cost pass-through"—
less than $0,001 per gallon of gaso-
line sold in the 12 counties
Assuming full recovery: 1,234,000
gallons/year (24,919 equivalent barrels
of oil) saveda
No major impact
No major impact
Compliance requirements may accelerate
the industry trend towards high through-
put stations (i.e., marginal operations
may opt to shut down)
One gallon of gasoline has 125,000 BTU's. One barrel of oil
equivalent has 6,050,000 BTU's.
-------
EXHIBIT 1-14(2)
U.S. Environmental Protection Agency
RACT timing requirements (1982)
Retrofitting all service stations
within time constraints may be diffi-
cult in a few instances
Problem area	Older stations face higher retrofit
costs—potential concerns are dis-
locations during installations
VOC emission after RACT control	201 tons per year from tank loading
operation
Cost effectiveness of RACT	$170 annualized cost/annual ton of
control	VOC reduction
Source: Booz, Allen & Hamilton Inc.
-------
EXHIBIT 1-15
U.S. Environmental Procec-ion Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR USE Or
CUTBACK ASPHALT IN THE STATE OF GEORGIA
Current". Situation
Use potentially affected
Indication of relative importance
of 'industrial section to non-
actainment county economies
Current industry technology
trends
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of control to meet
RACT guidelines
Affected Areas in Meeting RACT
Capital investment in
non-attainment areas
Annualized cost
in non-attainment areas
Price
Energy
Productivity
Employment
Discussion
In 1977, use of cutback asphalt was
34,190 tons statewide and an estimated
12,321 tons m non-attainment counties.
1977 sales of cutback asphalt were
estimated to be S3.2 million state-
wide and $1.2 million in non-attam-
ment counties".
Nationally, use of cutback asphalt
has been declining.
7,070 tans annually statewide; 2,660
in non-attainment counties, 1,460 of
which are non-exempted
Replace with asphalt 'emulsions
Replace with asphalt emulsions
Discussion
$0.06 million
No changes in paving costs are expected.
No changes in paving costs are expected.
14,100 equivalent barrels of oil saved2
No major impact
No major impact
The saving accrues to manufacturer, not user. The total energy
associated with manufacturing, processing and laying one gallon
of cutback is approximately 50,200 BTUs/gallon. For emulsified
asphalts, it is 2,830 BTUs/gallon. One barrel of oil equivalent
is assumed to have 6.05 million BTUs, and one ton of cutback
asphalt is assumed to have 256 gallons.
-------
INTRODUCTION AND OVERALL
STUDY APPROACH
-------
2.0 INTRODUCTION AND OVERALL
STUDY APPROACH
This chapter presents an overview of the study's pur-
pose, scope and methodology. It is divided into six sec-
tions :
Background
Summary of State Implementation Plan revisions
and state's need for assistance
Scope
Approach
Quality of estimates
Definition of terms used.
Each of these sections is discussed below.
The approach and quality of estimates is discussed in
detail in each of the respective chapters dealing with the
specific industrial categories affected by the volatile or-
ganic compounds control regulations.
2-1
-------
2.1 BACKGROUND
The Clean Air Act Amendments of 1977 required the states
to revise their State Implementation Plans (SIPs) to provide
for the attainment and maintenance of national ambient air
quality standards in areas designated as nonattainment. The
Amendments require that each state submit the SIP revisions
to the U.S. Environmental Protection Agency (EPA) by Janu-
ary 1, 1979. These proposed regulations should contain an
oxidant plan submission for major urban areas to reflect the
application of Reasonably Available Control Technology (RACT)
to stationary sources for which the EPA has published guide-
lines. The Amendments also require that the states identify
and analyze the air quality, health, welfare, economic, energy
and social effects of the plan provisions.
Under the direction of Region IV, the EPA contracted
with Booz, Allen & Hamilton Inc. (Booz, Allen) to assist the
states of Alabama, Georgia, Kentucky, North Carolina, South
Carolina and Tennessee in analyzing the economic, energy and
social impacts of the SIP revisions proposed by these states.
The assignment was initiated on September 28, 1978, and, as
a first step, the proposed SIP revisions and the type of as-
sistance desired by each state were reviewed.
After a review with each of the states and EPA Region
IV representatives, a work scope was defined that would in-
clude in the study an analysis of the direct economic and
energy impacts for those industrial segments most likely to
have a significant impact at the statewide level. For the
most part this included industrial categories that had more
than a few facilities potentially affected. The next section
discusses those specific industrial categories included in
this work scope.
2-2
-------
2.2 SUMMARY OF PROPOSED SIP REVISIONS IN GEORGIA AND THE
STATE'S NEED FOR CONTRACTOR SUPPORT
Georgia has proposed statewide regulations to reduce
volatile organic compound (VOC) emissions by implementing
the Reasonably Available Control Technology (RACT) guide-
lines developed by the EPA for existing stationary sources.
The state is also studying implementation of motor vehicle
inspection/maintenance programs in the non-attainment areas.
In addition, the state has proposed an opacity standard for
total suspended particulates (TSP) emissions.
The state officials were interviewed to determine their
need for support in analyzing the economic impact of the SI?
revisions. The analysis of implementing the RACT guidelines
for reducing VOC emissions was expressed as the fundamental
concern. Specifically, the state needed assistance in the
analysis of 12 of the 15 industrial categories for which
the EPA has published RACT guidelines. These 12 RACT in-
dustrial categories are described in the next section. The
other three industrial categories (surface coating of coil
and magnet wire insulation and miscellaneous refinery sources)
were excluded from this study because a very limited number
of sources were affected by the proposed regulations in those
categories. Although the cost impact in those categories
excluded might be significant for an individual firm
studied, it is unlikely that the economic or energy impact
at the macrolevel (statewide) would be significant.
2-3
-------
2.3 SCOPE
The primary objective of this study is to determine the
costs and impact of compliance with the proposed SIP re-
visions for six states in EPA, Region IV. The study will em-
phasize the analysis of direct economic costs and benefits
of the proposed SIP revisions. Secondary (social and energy)
impacts will also be addressed but are not the major study
emphasis.
In Georgia, the economic impact will be analyzed for
the implementation of RACT guidelines to reduce VOC from
the following 12 industry categories:
Surface coating of metal cans
Surface coating of paper
Surface coating of fabrics
Surface coating of automobiles and light duty trucks
Surface coating of metal furniture
Surface coating of large appliances
Solvent metal cleaning
Bulk gasoline terminals
Bulk gasoline plants
Storage of petroleum liquids in fixed roof tanks
Service stations—Stage I
Use of cutback asphalt.
The major study guidelines in the determination of the
economic impact of the RACT guidelines are discussed below.
The emission limitations for each industrial
category will be studied at the control level
established by the RACT guidelines. These are
presented in Exhibit 2-1, on the following page.
All costs and emission data were presented for 19 77.
Emissions sources included were existing stationary
point sources in the applicable industrial cate-
gories with VOC emissions greater than 5 pounds in
any hour or 50 pounds in any day in 12 counties
that were classified as non-attainment for ozone.^
In the rest of the state, only sources with greater
than 10 0 tons/year of potential VOC emissions will
be included in the study.
1 The non-attainment counties include: Clayton, Cobb, Coweta, DeKalb,
Douglas, Fayette, Fulton, Gwinnett, Henry, Paulding, Rockdale, and
Muscogee (Columbus).
2-4
-------
EXHIBIT 2-1 (1)
U.S. Environmental Protection Agency
LISTING OF EMISSION LIMITATIONS THAT REPRESENT
THE PRESUMPTIVE NORM TO BE ACHIEVED THROUGH
APPLICATION OF RACT FOR FIFTEEN INDUSTRY CATEGORIES
Category	RACT Guideline Emission Limitations3
Surface Coating Categories Based on
Low Organic Solvent Coatings (lbs.
solvent per gallon of coating, minus
water)
Surface Coating Of:
Cans
. Sheet basecoat (exterior and interior)
Overvarnish
Two-piece can exterior (basecoat and overvarnish
. Two and three-piece can interior body spray
Two-piece can exterior end (spray or rollcoat)
. Three-piece can side-seam spray
. End sealing compound
Coils
. Prime and topcoat or single coat
Paper
Fabrics and vinyl coating
. Fabric
. vinyl
Automobiles and Light Duty Trucks
. Prime application, flashoff and oven
. Topcoat application, flashoff and oven
. Final repair application, flashoff and oven
Metal Furniture
. Prime and topcoat or single coat
Magnet Wire
Large appliance
. Prime, single or topcoat
Solvent Metal Cleaning
Cold cleaning
Conveyorized degreaser
Open top degreaser
Petroleum Refinery Sources
. Vacuum producing systems
2.8
4.2
5.5
3.7
2.6
2.9
2.9
3.8
1.9
2.8
4.8
3.0
1.7
2.8
Provide cleaners with: cover: facility
to drain clean parts; additional free-
board; chiller or carbon absorber.
Follow suggested procedures to minimize
carryout.
Provide cleaners with: refrigerated chillers;
or carbon adsorption system; drying tunnel
or rotating basket; safety switches; covers.
Follow suggested procedures to minimize
carryout.
Provide cleaner with: safety switches;
powered cover; chiller; carbon absorber.
Follow suggested procedures to minimize
carryout.
No emissions of any noncondensible VOC
from condensers, hot wells or accumulators
to a firebox, incinerator or boiler.
-------
Category
. Wastewater separators
. Process unit turnaround
Bulk Gasoline Terminals
Bulk Gasoline Plants
Storage of Petroleum Liquids in Fixed
Roof Tanks
Service Stations (Stage I)
Use of Cutback Asphalt
EXHIBIT 2-1(2)
U.S. Environmental Protection Agency
RACT Guidelines Emission Limitations3
Minimize emissions of VOC by providing
covers and seals on all separators and
forebays and following suggested operating
procedures to minimize emissions
Minimize emissions of VOC by depressurizatio
venting to vapor recovery, flare or firebox.
No emissions of VOC from a process unit
or vessel until its internal pressure
i3 136 kilo Pascals (17.7 psia) or less
Equipment such as vapor control system
to prevent mass emissions of VOC from
control equipment to exceed 80 milligrams
per liter (4.7 grains per gallon) of gaso-
line loaded
Provide submerged filling and vapor bal-
ancing or equivalent control to reduce
VOC emissions. Follow suggested procedures
to minimize vapor losses.
Provide single seal and internal floating
roof to all fixed roof storage vessels
with capacities greater than 150,000
liters (39,000 gal.) containing volatile
petroleum liquids for which true vapor
pressure is greater than 10.5 kilo
Pascals (1.52 psia)
Provide submerged fill and vapor balance
for any stationary storage tank located
at a gasoline dispensing facility with a
capacity of 7,500 liters (2,000 gal.) or
greater which is in place before January
1, 1979, or any stationary storage tank
located at a gasoline dispensing facility
with a capacity of 948 liters (250 gal.)
or more which is in place before January
1, 1978. Follow suggested procedure to
minimize vapor losses.
The manufacture, mixing, storage, use
or application may be approved where:
long-life stockpile storage is necessary;
the use or application is an ambient tem-
perature less than 10°C (50°F) is necessary;
or it is to be used solely as a penetrating
prime coat
Note: An alternative scenario to the recommended RACT guidelines for surface coating
•of automobiles is also studied. It assumes that the timing requirements and
possible limitations are modified to meet developing technologies.
a. Annotated description of RACT guidelines
Source: Regulatory Guidance for Control of Volatile Organic Compound Dnissions from 15
Categories of Stationary Sources, U.S. Environmental Protection Agency, EPA-90512-
78-001, April 1?78.
-------
Service stations, bulk plants, solvent metal
cleaning, and the use of cutback asphalt were
studied for the 12 non-attainment counties only.
The following volatile organic compounds were
exempted:
Methane
Ethane
Trichlorotrifluorethane (Freon 113)	.
1,1,1-trichloroethane (methyl chloroform).
The timing requirement for implementation of con-
trols to meet RACT emission limitations was
January 1, 1981 for cutback asphalt and July 1,
198 2 for the other industry categories.
1 The exemption status of methyl chloroform under these guidelines
may be subject to change.
2-5
-------
2.4 APPROACH
This section describes the overall approach and method-
ology applied in this assignment. In general, the approach
varied for each state and also for each industrial category
studied. This section specifically describes the overall
approach that was applied for the State of Georgia. The
methodology applied to determine the economic impact for
each industrial category in Georgia is described in further
detail in the first section of each chapter dealing with the
specific industry category.
There are five parts to this section to describe the
approach for determining estimates of:
Industry statistics
VOC emissions
Process descriptions
Cost of controlling VOC emissions
Comparison of direct costs with selected direct
economic indicators.
2.4.1 Industry Statistics
The assembly of economic and statistical data for each
industrial category was an important element in establishing
the data base that was used for projection and evaluation of
the emissions impact. Some of the major variables for each
industrial category were:
Number of manufacturers
Number of employees
Value of shipments
Number of units manufactured
Capital expenditures
Energy consumption
Productivity indices
2-6
-------
Current economics (financial) status
Industry concentration
Business patterns (small vs. large; downstream
integration)
Age distribution of facilities
Future trends and developments.
Some of the industrial categories studied cover a large
number of potentially affected facilities. For these cate-
gories, industry statistical data were collected by applying
a categorical approach rather than by attempting to identify
all the individual firms likely to be affected. The indus-
trial categories studied by this approach included:
Solvent metal cleaning
Gasoline service stations
Use of cutback asphalt.
For these industrial categories, secondary data sources
and nonconfidential Booz, Allen files served as the primary
resources for the data base. Industry and association in-
terviews were then conducted to complete, refine and validate
the industry statistical data base.
For the remaining industrial categories studied, a more
deliberate approach was applied:
For the surface coating categories, the facilities
potentially affected by the RACT guidelines were
identified from secondary data sources. The state
officials then performed telephone interviews to
determine whether these facilities perform surface
coating operations or not. The Booz, Allen study
team then performed further telephone interviews
with the potentially affected facilities iden-
tified by the state to verify their inclusion.
For bulk gasoline plants and terminals and fixed-
roof tanks, the list of potentially affected
facilities was compiled by the Georgia Department
of Natural Resources
Industry category statistical data were compiled
using secondary sources such as:
2-7
-------
Department of Commerce
Census of Manufacturers
Trade associations
Bureau of Labor Statistics
National Technical Information Services.
The industry statistical data were refined by two
mechanisms:
Assessing the statistical data for reason-
ableness in comparison to the list of poten-
tially affected facilities
Using industry and association interviews
for completion and validation.
2.4.2 VCX: Emissions
Since no emissions data were available from the state
emissions inventory, emissions were estimated by the Booz,
Allen study team using different approaches depending upon
the availability of data on characteristics of affected
facilities.
For bulk gasoline plants and terminals and fixed-
roof tanks, emissions were estimated by using
facility characteristics data provided by the
state and emission factors developed by U.S. EPA.
For the surface coating industry categories, emis-
sions were estimated by using data provided by the
industry to Booz, Allen during telephone inter-
views .
For the other categories to be studied, the emis-
sions were estimated by applying relevant factors
(VOC emissions per facility, throughput, etc.) that
had been developed by EPA studies. Although this
categorical approach cannot be,validated to the
degree of a point source by point source approach,
the emissions can be reasonably estimated on a
statewide basis because of the large number of
sources in each RACT industrial category. Emis-
sions were estimated by this approach for the
following RACT industrial categories:
Solvent metal cleaning
Service stations
Cutback asphalt.
2-8
-------
The emission estimates for each of the 12 RACT indus-
trial categories studied were refined during industry in-
terviews .
2.4.3 Process Descriptions
For each of the industrial categories, the basic tech-
nology and emission data were reviewed and summarized con-
cisely for subsequent evaluation of engineering alternatives.
In this task, the RACT documents that had been prepared for
each industrial category and other air pollution control
engineering studies served as the basis for defining tech-
nological practice. Additional alternatives of control that
met the requirements of the RACT guidelines were identified
from literature search. The most likely control alternatives
were assessed and evaluated by:
Technical staff at Booz, Allen
Interviews with industry representatives
Interviews with EPA representatives
Interviews with equipment manufacturers.
2.4.4 Cost of Controlling VOC Emissions
The cost of control to meet the requirements of the
RACT guidelines had been presented in the RACT documents,
other technical EPA studies and trade journal technical
documents and by industry representatives. The approach
applied in developing capital and annualized cost estimates
was to:
Utilize available secondary source information as
the primary data source
Validate the control alternatives industry is
likely to apply
Calibrate these cost estimates provided in tech-
nical documents.
It was not within the purpose or the scope of this
project to provide detailed engineering costs to estimate
the cost of compliance.
Cost data presented within the body of the report were
standardized in the following manner:
2-9
-------
All cost figures are presented for a base year,
1977.
Capital cost figures represent installed equipment
cost including:
Engineering
Design
Materials
Equipment
Construction.
The capital cost estimates do not account for
costs such as:
- Clean-up of equipment
Lost sales during equipment downtime
Equipment start-up and testing
Initial provisions (spare parts).
Capital related annual costs are estimated at 24
percent of the total capital cost per year (unless
explicitly stated otherwise). The estimation pro-
cedure applied was built up from the following
factors:
Depreciation—10 percent (assuming straight-
line over a ten-year life)
Interest—10 percent
Taxes and insurance—4 percent.
The capital-related annual costs do not account
for investment costs in terms of return or invest-
ment parameters (i.e., the "opportunity cost" of
money is not included).
Annual operating costs of compliance with the RACT
guidelines were estimated for each of the control
alternatives studied. The annual operating costs
included were:
Direct labor
Raw material costs (or savings)
Energy
Product recovery cost (or savings)
Maintenance•
2-10
-------
Other types of costs, not included in this analy-
sis, involve compliance costs, such as:
Demonstration of control equipment efficiency
Supervisory or management time
Cost of labor or downtime during installation
and startup.
The annualized cost is the total of direct oper-
ating costs (including product or raw material
recovery) and the capital related annual costs.
2.4.5 Comparison of Direct Cost with Selected Direct
Economic Indicators
In each of the industrial categories studied, after the
costs (or savings) of compliance had been determined, these
costs were compared with selected economic indicators. This
comparison was performed to gain a perspective on the com-
pliance costs rather than to estimate price changes or other
secondary effects of the regulation. Presented below are
typical comparisons of direct costs with indicators that are
presented in this study.
Annualized cost in relation to current price—To
gain a perspective on the compliance cost in re-
lation to current prices of the manufactured items
at the potentially affected facilities, the annu-
alized cost is presented in terms of a price in-
crease assuming a direct pass-through of costs to
the marketplace.
This analysis was based on the average cost
change (including those facilities that may
have little or no economic impact associated
with meeting the proposed standards) divided
by the average unit price of goods manufac-
tured.
For this reason as well as many others (that
might be addressed in a rigorous input-output
study to estimate eventual price increase),
this analysis should not be interpreted as
forecast of price changes due to the proposed
standards.
2-11
-------
Annualized costs as a percent of current value of
shipment—The annualized costs applied are for all
those facilities potentially affected divided by
the estimated value of shipments for the statewide
industrial category (i.e., including those facil-
ities which currently may meet the proposed stand-
ard) . This approach tends to understate the effect
to those specific firms requiring additional ex-
penses to meet the proposed standard. Therefore,
when available, the compliance cost is also pre-
sented as a percent of the value of shipments for
only those firms not currently meeting the pro-
posed regulation.
Capital investment as a percent of current annual
capital appropriations—Estimated statewide capital
investment for the potentially affected facilities
divided by the estimated capital appropriations for
the industry affected as a whole in the state (in-
cluding those facilities that may not require any
capital investment to meet the proposed standard).
2-12
-------
2.5 QUALITY OF ESTIMATES
The quality of the estimates that are presented in this
report can be judged by evaluating the basis for estimates
of the individual study components. In each of the chapters
that deal with the development of estimated compliance cost,
the sources of information are fully documented. In addi-
tion, the study team has categorically ranked the overall
data quality of the major sources and, therefore, of the
outcomes. These data quality estimates were ranked into
three categories:
High quality ("hard data")—study inputs with
variation of not more than + 25 percent
Medium quality ("extrapolated data")—study inputs
with variation of + 25 to 75 percent
Low quality ("rough data")—study inputs with
variation of + 50 to 150 percent.
Each of these data quality estimates is presented in
the individual chapters. The overall quality ranking of the
study inputs for each RACT industrial category was generally
in the medium quality range.
2-13
-------
2.6 DEFINITIONS OF TERMS
Listed below are definitions of terms that are used
in the body of the report:
Capture system—the equipment (including
hoods, ducts, fans, etc.) used to contain,
capture, or transport a pollutant to a
control device.
Coating applicator—an apparatus used to
apply a surface coating.
Coating line—one or more apparatuses or
operations which include a coating appli-
cator, flash-off area and oven, wherein
a surface coating is applied, dried and/
or cured.
Control device—equipment (incinerator,
adsorber or the like) used to destroy
or remove air pollutant(s) prior to dis-
charge to the ambient air.
Continuous vapor control system—a vapor
control system that treats vapors displaced
from tanks during filling on a demand basis
without intermediate accumulation.
Direct cost pass-through—the relationship
of the direct annualized compliance cost
(increase or decrease) to meet the RACT
limitations in terms of units produced
(costs per unit value of manufactured goods.)
Emission—the release or discharge, whether
directly or indirectly, of any air pollutant
into the ambient air from any source.
Facility—any building, structure, installa-
tion, activity or combination thereof which
contains a stationary source of air contam-
inants.
Flashoff area—the space between the appli-
cation area and the oven.
Hydrocarbon—any organic compound of carbon
and hydrogen only.
2-14
-------
Incinerator—a combustion apparatus designed
for high temperature operation in which solid,
semisolid, liquid or gaseous combustible
wastes are ignited and burned efficiently
and from which the solid and gaseous residues
contain little or no combustible material.
Intermittent vapor control system-—a vapor
control system that employs an intermediate
vapor holder to accumulate vapors displaced
from tanks during filling. The control
device treats the accumulated vapors only
during automatically controlled cycles.
Loading rack—an aggregation or combination
of gasoline loading equipment arranged so
that all loading outlets in the combination
can be connected to a tank truck or trailer
parked in a specified loading space.
Organic material—a chemical compound of
carbon excluding carbon monoxide, carbon
dioxide, carbonic acid, metallic carbides
or carbonates, and ammonium carbonate.
Oven—a chamber within which heat is used
to bake, cure, polymerize and/or dry a
surface coating.
Prime coat—the first film of coating
applied in a two-coat operation.
Reasonably available control technology
(RACT)—the lowest emission limit as defined
by EPA that a particular source is capable
of meeting by the application of control
technology that is reasonably available
considering technological and economic
feasibility. It may require technology
that has been applied to similar, but not
necessarily identical, source categories.
Reid vapor pressure—the absolute vapor
pressure of volatile crude oil and volatile
nonviscous petroleum liquids, except liqui-
fied petroleum gases, as determined by
American Society for Testing and Materials,
Part 17, 1973, D-323-72 (Reapproved 1977).
Shutdown—the cessation of operation of
a facility or emission control equipment.
2-15
-------
Solvent—organic material which is
liquid at standard conditions and which is
used as a dissolver, viscosity reducer or
cleaning agent.
Standard conditions—a temperature of 20°C
(68°F) and pressure of 760 millimeters of
mercury (29.92 inches of mercury).
Startup—the setting in operation of a source
or emission control equipment.
Stationary source—any article, machine,
process equipment or other contrivance from
which air pollutants emanate or are emitted,
either directly or indirectly, from a fixed
location.
Topcoat—the final film of coating applied
in a multiple coat operation.
True vapor pressure—the equilibrium partial
pressure exerted by a petroleum liquid as
determined in accordance with methods described
in American Petroleum Institute Bulletin 2517,
"Evaporation Loss from Floating Roof Tanks,"
1962.
Equivalent barrel of oil—energy demand is
converted into barrels of oil at the conver-
sion rate of 6,000,000 BTU per barrel of
oil.
Vapor collection system—a vapor transport
system which uses direct displacement by the
liquid loaded to force vapors from the tank
into a vapor control system.
Vapor control system—a system that prevents
release to the atmosphere of at least 90
percent by weight of organic compounds in
the vapors displaced from a tank during
the transfer of gasoline.
Volatile organic compound (VOC)—any compound
of carbon that has a vapor pressure greater
than 0.1 millimeters of mercury at standard
conditions excluding carbon monoxide, carbon
dioxide, carbonic acid, metallic carbides
or carbonates and ammonium carbonate.
2-16
-------
3.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
CAN MANUFACTURING PLANTS
IN THE STATE OF GEORGIA
-------
3.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
CAN MANUFACTURING PLANTS
IN THE STATE OF GEORGIA
This chapter presents a detailed economic analysis of
implementing RACT controls for can manufacturing plants in the
State of Georgia. The chapter is divided into five sections:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Cost and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic implications and selected secondary
impacts.
Each section presents detailed data and findings based
on analyses of the RACT guidelines, previous studies of can
manufacturing plants, interviews and analysis.
3.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining
estimates of:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Cost of controlling VOC emissions
Economic impact of emission control
for can manufacturing plants in Georgia.
The quality of the estimates is described in detail in
the latter part of this section.
3-1
-------
3.1.1	Industry Statistics
Industry statistics on can manufacturing plants in
Georgia were unavailable from the standard sources. No data
for Georgia were given in Current Industrial Reports, Metal
Cans, Summary for 1976. Most industry statistics for Georgia
were withheld in the 1972 Census of Manufactures, though one
table (6B) reported value of shipments of $76.7 million.
Interviews in the state revealed, however, that extrapolations
based on this figure were unrealistically low, so this number
was not utilized in the report.
Emissions data provided the best source of current data
on can manufacturing in Georgia. Emissions data were correlated
with emissions factors developed for typical plants, and the
number of cans manufactured in Georgia was developed from these
data. The exact calculations are shown in Exhibit 3-16.
Georgia value of shipments estimates were developed by
relating the Georgia production figures to U.S. statistics
for can production, and applying a ratio of value of shipments
to can production from U.S. statistics.
The basis for this analysis is the 1976 U.S. statistics
for the can industry as presented in Current Industrial Reports.
These statistics are excerpted below, along with 1977 projections
which were based on the estimates in U.S. Industrial Outlook,
1977, that production of cans in 1977 increased by 3 percent,
and value of shipments by 10 percent.
Industry	1976	1977
Statistics	U.S. Data	Projections
Number of cans (millions)	83,972	86,500
Quantity (1,000 base	180,141	185,500
boxes of metal)a
Value of shipments	6,357.5	6,990
($ million)
Ratio of value of	75,700	80,800
shipments to number of
cans ($/million cans)
a. A base box is an area of 31,360 sguare inches, equivalent
to 112 sheets, 14 inches X 20 inches in size.
3-2
-------
The 1977 ratio of value of shipments to number of cans
was used to estimate the value of shipments in the State of
Georgia.
Employment figures in the can industry were obtained from
County Business Patterns, 1976. Capital investment was roughly
estimated by prorating the statistics presented in Current
Industrial Reports for the U.S. to the proportion of the industry
in Georgia and adjusted to 1977 by applying the proportion of
the value of shipments for the U.S. industry in 1977 ($6.99 billion)
to that of 1972 ($4.5 billion).
3.1.2	VOC Emissions
The data for determining the current level of emissions
from six plants were provided by the State of Georgia, Department
of Natural Resources, from its permit files, supplemented by
direct input from the firms involved, where no data were available
from the state.
3.1.3	Processes for Controlling VOC Emissions
Processes for controlling VOC emissions for can manufacturing
plants are described in Control of Volatile Organic Emissions
from Stationary Sources, EPA-450/2-77-008. These data provide
the alternatives available for controlling VOC emissions from
can manufacturing plants. Several studies of VOC emission con-
trol were analyzed in detail, and the industry trade association
and can manufacturers were interviewed to ascertain the most
likely types of control techniques to be used in can manufacturing
plants. The specific studies analyzed were Air Pollution Control
Engineering and Cost Study of General Surface Coating Industry,
Second Interim Report, Springborn Laboratories, and informational
literature supplied by the Can Manufacturers Institute to the
state EPA programs.
The alternative approaches to VOC control as presented in
the RACT document were supplemented by several other approaches.
The approaches were arrayed and the emissions to be reduced from
using each type of control were determined. This scheme forms
the basis of the cost analysis, for which the methodology is
described in the following paragraphs.
3.1.4	Cost of Control Approaches and the Resulting Reduction
in VOCs
The costs of VOC control approaches were developed by:
Separating the manufacturing process into discrete
coating operations on a national basis:
By can manufacturing technology
By type of can manufactured; i.e., beverage vs. food
3-3
-------
Determining the alternative approaches to control
likely to be used for each type of coating operation
and the cost factors involved
Estimating installed capital costs for each approach
Estimating the probable use of each approach to
control considering:
Installed capital cost
Annualized operating cost
- Incremental costs for materials and energy
Technical feasibility by 1981
Aggregating costs to the total industry in Georgia.
Costs were determined from analysis of the previously
mentioned studies:
Control of Volatile Organic Emissions from
Stationary Sources, EPA-450/2-77-008
Air Pollution Control Engineering and Cost
Study of General Surface Coating Industry,
Second Interim Report, Springborn Laboratories.
and from informational data supplied by the Can Manufacturers
Institute and from interviews with major can manufacturing
companies.
The cost of compliance and the expected emission reduction
in Georgia were developed based on can industry operational data
and refined using interviews with can manufacturers. Based upon
the assessment of the degree and types of controls currently in
place, the cost of VOC emission control and the net reduction in
emissions were estimated.
3.1.5 Economic Impact
The economic impact was analyzed by considering the lead
time requirements needed to implement RACT, assessing the
feasibility of instituting RACT controls in terms of available
technology, comparing the direct costs of RACT control to
various state economic indicators and assessing the secondary
impacts on market structure, employment and productivity from
implementing RACT controls in Georgia.
3-4
-------
3.1.6	Quality of Estimates
Several sources of information were utilized in assessing
the emissions, cost and economic impact of implementing RACT
controls on can manufacturing plants in Georgia. A rating scheme
is presented in this section to indicate the quality of the data
available for use in this study. A rating of "A" indicates hard
data, "B" . indicates data were extrapolated from hard data and
"C" indicates data were estimated based on interviews, analyses
of previous studies and best engineering judgment. Exhibit 3-1,
on the following page, rates each study output and overall quality
of the data.
3-5
-------
EXHIBIT 3-1
U.S. Environmental Protection Agency
DATA QUALITY
A B	C
"Hard	"Extrapolated	"Estimated
	Study Outputs	 Data"		Data"	Data"
Industry statistics	X
Emissions	X	X
Cost of emissions
control	X
Statewide costs of
emissions control	X
Overall quality of
data
Source: Booz, Allen & Hamilton Inc.
-------
3.2 INDUSTRY STATISTICS
Industry characteristics,, statistics and business trends
for can manufacturing plants in Georgia are presented in this
section. Data in this section form the basis for assessing the
impact of implementing RACT to VOC emissions for can manufactur-
ing plants in the state.
3.2.1	Size of the Industry
Six can manufacturing facilities in Georgia, representing
three companies, have been identified as potentially affected
by the proposed regulations. Four of these are located in
nonattainment areas. The other two, located in unclassified
areas, are included because their VOC emissions are above 100
tons per year, the level above which the proposed regulations
are to apply.
There are three modes of operation in the state:
Assembly of cans from precoated stock—three
plants
Sheet coating and assembly—two plants
Manufacture of two-piece cans from uncoated
coiled metal stock—one plant.
Exhibit 3-2, on the following page, presents a list of
the six can facilities in the state that have been identified.
The can industry in Georgia manufactured an estimated
3.6 billion cans, with an estimated value of $290 million in
1977. Employment is estimated at about 1,600. Can industry
capital expenditures are estimated to have been $10 million
in the state of Georgia in 1977, based on extrapolation of
197 2 data. Because of the protection methodology, the capital
expenditure figure might be grossly different in any single
year.
3.2.2	Comparison of the Industry to the State Economy
The Georgia can manufacturing industry employs 0.1 percent
of the state labor force, excluding government employees.
3-6
-------
EXHIBIT 3-2
U.S. Environmental Protection Agency
LIST OF METAL CAN MANUFACTURING FACILITIES
POTENTIALLY AFFECTED BY RACT IN GEORGIA
Name of Firm
Location
Product


Notes

American Can Company
College Park
3-piece
beverage
cans
Assembly only

American Can Company
Forest Park
3-piece
food
beverage
cans
and
Sheet coating
assembly
and
American Can Company
Columbus
3-piece
beverage
cans
Assembly only

Continental Can Group
Forest Park
3-piece
beverage
cans
Assembly only

Continental Can Group
Perry
2-piece
beverage
cans
Assembly only

Standard Container Company
Homerville
3-piece
type
paint cans, cone
cans, gasoline cans
Sheet coating
assembly
and
Source: State of Georgia
Department of Natural Resources,
and Booz,
Allen &
Hamilton Inc.
interviews

-------
3.2.3	Characterization of the Industry
The can industry is composed of independent and captive
manufacturers. Nationwide, about 70 percent of all cans are
produced by independent manufacturers and about 30 percent by
captive producers. The majority of captive can producers use
the cans to package canned food/soup and beer. In Georgia, the
independent producers are the only can manufacturers, though
many of the plants are located at the site of major beverage
bottlers.
The independent can producers generally operate on a "job
shop" basis, producing cans for several customers on the same
production facilities. In addition to differences in can size
and shape, there are differences in coatings resulting from:
The need to protect different products with
varying characteristics from deterioration
through contact with the metal can
The decoration requirements of customers and
requirements for protection of the decoration.
Nationally, the can industry produces more than 600 different
shapes, styles and sizes to package more than 2,500 products. A
relatively few can sizes and coating combinations employed for
packaging beverages and food represent about 80 percent of the
market. The approximate percentage of total can production
represented by the major groups follows.
Type of Can	Percent of Total Production
Beer and soft drink	54
Fruit and vegetable	18
Food cans in the category
that includes soup cans	8
Other	20
TOTAL	100
In Georgia, the small can industry is focused on meeting
the needs of the beverage, food and specialty products canning
industries. Of the 3.6 billion cans produced in Georgia in
1977, approximately 2.8 billion (77 percent) are estimated to
have been beer and soft drink cans, and 0.8 billion (23 percent)
were food or other product cans. The distribution and the
method used for estimating are presented later, in Exhibit 3-16.
3-7
-------
Nationally, the can industry has experienced rapid techno-
logical changes since 1970 caused by the introduction of new
can making technology—the two-piece can. These changes in
can manufacturing technology have resulted in the closing of
many can plants producing the traditional three-piece product
and replacing the capacity with two-piece cans. There is
evidence that this trend will continue, so that by 1981 about
80 percent of the beverage cans and a relatively small but growing
percentage of other cans will be of two-piece construction.
In Georgia, the two-piece can lines that exist have replaced
3-piece lines.
3-8
-------
3.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents information on can manufacturing
operation, estimated VOC emissions, the extent of current
vapor control and the likely alternatives which may be used
for controlling VOC emissions in Georgia.
3.3.1	Can Manufacturing Operations
The can industry produces cans using two fundamental
technologies, the traditional three-piece method and the newer
two-piece technology.
The three-piece can technology consists of two separate
operations: sheet coating and can fabrication (assembly). Sheet
coating and can assembly operations are frequently performed in
separate facilities. The major can manufacturers operate cen-
tralized facilities for the coating and decorating of flat
sheets. These centralized plants are often called "feeder plants."
Sheets are coated at a rate of about 2.5 base boxes per minute,
which is equivalent to approximately 2,250 twelve-ounce cans per
minute. The specific operations in three-piece can manufacture
are summarized below.
Sheets of metal are coated and decorated with
28 or 35 can bodies (outs). This is accomplished
in two steps.
The sheets are base coated on the interior
side and then passed through a wicket oven.
Food cans, as well as some beer and soft drink
cans, are given an exterior base coat.
In the case of beer and soft	drink cans,
the base coated sheets are decorated (printed),
over coated with varnish and	then cured in a
smaller wicket oven.
Exhibits 3-3 and 3-4, on the	following pages,
present flow diagrams of the	base coating and
decorating operations.
3-9
-------
EXHIBIT 3-3
U.S. Environmental Protection Agency
SHEET BASE COATING OPERATION
Source: U.S. Environmental Protection Agency
-------
EXHIBIT 3-4
U.S. Environmental Protection Agency
SHEET PRINTING OPERATION
Environmental Protection Agency
-------
Can bodies are formed from the coated sheets.
The printed sheets are slit into individual
body blanks and fed into the "body maker."
The blank is rolled into a cylinder and
soldered, welded or cemented.
The seam is sprayed (striped) on the inside
and outside with an air dry lacquer to protect
the exposed metal. Sometimes this is done
only on the inside surfaces.
Can ends are formed from coated sheet stock and
fed to the end seamer where final fabrication is
completed.
Can ends are stamped from coated stock and
perimeter coated with synthetic rubber compound
gasketing.
Solvent-based compounds are air-dried and
water-based compounds are oven-dried.
The can is fabricated from the body and the end in
an "end sealer," leak tested and palletized for ship-
ment. Exhibit 3-5, on the following page, presents
a schematic diagram of can end and three-piece can
fabricating operations.
Two-piece cans are generally manufactured in an integrated
high-speed process capable of producing 600 or 800 cans per
minute. (There was one two-piece plant operating in Georgia
during 1977.)
Coil stock is formed into a shallow cup.
The cups are drawn and ironed into the form
of a can.
The cans are washed to remove the lubricant.
An exterior base coat is applied (if required) by
reverse roller coating and cured in a continuous
oven.
The cans are printed and then coated with a protective
varnish. The coating is then baked in an oven. Steel
cans are sometimes given two separate interior coatings.
3-10
-------
EXHIBIT 3-5
J.S. Environmental Protection Agency
CAN END, AND THREE-PIECE BEER AND BEVERAGE
CAN FABRICATING OPERATION
SCROlL
STRIP SHEARER
COMPOUND LINER
(NO fORMER
TAIFORMER
r 1

1
0
"rr
0
_ji .
SIDE SiAMi
• STRAY
ENOSEAMEH
OVEN
INSIDi
¦OOV
STRAY
NICKER AMD fLAHClR
fALLHUiOLOAD
LEAK KniR
Source: U.S. Environmental Protection Agency
-------
The cans are necked, flanged and tested.
The interior of the cans are spray coated and
baked in the oven.
An exterior end spray coating is applied:
For aluminum cans to prevent blocking
For steel cans to prevent rusting.
Exhibit 3-6, on the following page, is a process
diagram of a two-piece can fabricating and coating
operation.
Two-piece cans are largely made from aluminum.
Virtually all aluminum cans are of two-piece
construction.
Aluminum lends itself to two-piece construction,
yet offers no advantage to warrant converting
three-piece can lines to aluminum.
3-11
-------
EXHIBIT 3-6
U.S. Environmental Protection Agency
TWO-PIECE ALUMINUM CAN FABRICATING AND COATING
OPERATION
CANS




CD

a
	¥



COM.
curriA
WALL
IRONER
WASHER
IASE COAT TRAV
IXTIRIOR BASE COATER
i
CAMS
PRIMTIR AMO OVER VARMISH
COATER ^


IL
'V
^ 1


1



J

fooC%
'°oo°'
OVEN
INTERIOR aODV SPRAV
AMO EXTERIOR ENOSPRAV
AND/OR ROLL COATER
LEAK
TESTER
RECKER AIIO
FLAN6ER
OVEN
Source:
U.S.
Environmental Protection Agency
-------
3.3.2	Emissions and Current Controls
This section presents the estimated VOC emissions from
can manufacturing facilities in Georgia. Exhibit 3-7, on the
following page, shows the total emissions from the six can
manufacturing facilities in Georgia to be about 3,200 tons per
year. No emission controls are reported to be utilized in the
state, though a small amount of water-based coatings are reported
to be in use. Sources of this information are reports filed
with the Georgia Department of Natural Resources, supplemented
by interviews with the firms involved.
Exhibit 3-7 also presents a distribution of emissions by
type of product. These distributions, which form the basis
for later estimates of production, are believed to be generally
accurate, based on interviews with the companies involved; but
they have not been further verified because of the potential for
release of proprietary information. It should be noted, however,
that final conclusions are not likely to be grossly affected
by changes in the assumptions as to the distribution of the
totals between product types.
The can industry is moving toward products with inherently
lower VOC emissions during manufacture. Differences in the
manufacturing process between two-piece and three-piece cans
allow for a 50 percent to 60 percent reduction in emissions in
converting from a three-piece beverage can to a two-piece beverage
can decorated in a similar manner. This is caused by a greater
number of interior coating operations for three-piece cans, as
well as a tendency to eliminate certain exterior coatings on
two-piece beer and soft drink cans. The exhibits, on the
following pages, present the emissions from typical can coating
operations based upon average coating properties, can production
rates and annual hours of operation. They present data for
conventional systems, as well as low solvent systems. It is
important to note that, in most instances, can manufacturing
does not require all the coatings listed on the exhibits.
Exhibit 3-8 presents VOCs resulting from coating
operations typically involved in the manufacture
of two-piece cans.
Exhibit 3-9 presents VOCs resulting from sheet
coating operations typically involved in the
manufacture of three-piece cans.
Exhibit 3-10 presents VOCs resulting from typical
three-piece can assembly operations.
3-12
-------
EXHIBIT 3-7
U.S. Environmental Protection Agency
1977 EMISSIONS FROM CAN COATING OPERATIONS
IN GEORGIA
Facility
Emissions
(Tons/Year)
Estimated Distribution of Emissions (Tons/Year)
2-piece
Beverage
Assembly
3-piece
Beverage
Assembly
3-piece	Sheet
Food and	Sheet	Coating
Other	Coating	Food and
Assembly	Beverage	Other
American Can Company,
College Park
281
281
American Can Company,
Forest Park
987
210
210
320
247
American Can Company,
Columbus
64
64
Continental Can Group,
Forest Park
155
155
Continental Can Group,
Perry
1, 420
1,420
Standard Container Company,
Homervilie
300
110
190
TOTAL
3, 207
1,420
710
320
320
437
Note: Distributions are Booz, Allen estimates. These estimates have not been validated with the companies because of the
potential for release of proprietary information.
Source: Booz, Allen and Hamilton Inc., analysis of information reported to Georgia Department of Natural Resources,
supplemental emissions information provided by specific companies.
-------
EXHIBIT 3-B (1)
U.S. Environjnentdl Protection Agency
EMISSIONS FOR TYPICAL COATING
OPERATION USED IN THE MANUFACTURE
OF TWO-PIECE CANS
Operation
Organic
Penalty	Sol Ids	Solvnt
(Lb./gal.)	(wt. %)	(wt. «) (lb./gal.)
Coating Properties
Water
(qal./gal.
coating)
voc
(lb. solvent/
gal. lass water)
VOC
(lb. solvent/
gal. lncl. water)
Yield
(1000 can/
gal.)
Organic Syateos
Print and varnleh	8.0
Size and print	8.0
White baas coat and
print	11.0
Interior body apray	7.9
End coating A1	8.0
End coating steal	8.0
45
40
62.5
26
45
45
100
100
100
100
100
100
4.40
4. BO
13
85
40
40
4.40
4 .80
4.11
5.85
4.40
4.40
4.40
4.80
4.1]
5.85
4.40
4 .40
12
20
9
6®
200
40
Low Solvent Systems
Waterborno
Print and varnish	8.5
Swu and print	8.S
White base coat and
l>i int	11.7
Interior body bpray	8.55
End coating A1	8.5
End coating dtuu)	8.5
UV Cure High Solids
Print and varnish'1	8.0
35
30
62
20
35
35
95
20
20
20
20
20
20
100
1.11
1.19
0.89
1.	37
1 .11
1.11
0. 40
0.53
0.57
0.43
0.66
0.53
0.53
2 . 36
2.76
1 .55
3.99
2.36
2.36
0.40
11
19
0.88
1 . 36
1.11
1.11
0.40
11
17
8
5*
200
40
25
a.	Assuming 75 percent beer cana, all given a single coal, and 25 percent soft drink cans, given a double coating
b.	Book, Allen 4 Hamilton, Inc. eetlAate ba^ed on data supplied by CMIt individual can m&nufacturur:* and the
EPA document 4bU/.'- 17-00B
-------
EXHIBIT 3-8 (2)
U.S. Envirorunsntal Protection Agency
Operation
Organic Systeas
Production
(cana/mln.)
(Hi 1 lion
oana/yr.)
Coating Consumed
(g«l./hr.)
(1000 yal./yr.)
(Ib./hr.)
VOC
(tons/yr.)
(lb./mi 11 ion cana)
Print and varniuh	650
Site and print	650
White baae coat	650
and print
Interior body	650
apray
End coating Ai	650
End coating steel	650
253.5
251.5
253.5
253. 5
253.5
253.5
3.25
1 .95
4. 33
6. 50
0. 20
0. 98
21 . 1
12.7
28.1
42. 3
1. 3
6.4
14. 3
9.4
17.8
38.0
0. 9
4.3
46. 5
30.6
57.9
123.5
2.9
14.0
364
241
457
974
23
110
Low Solvent Systems
Hatarborne
Print and varniah 650
Size and print	650
White base coat	650
and print
Interior body	650
apray
End coating Al	650
End coating steel 650
UV Cured High solids
Print and varniah 650
253.5
253.5
253. 5
253.5
253.5
253.5
253.5
3.55
2. 29
4.88
7.80
0. 20
0.98
1.56
23.1
14.9
31. 7
50.7
1.3
6.4
10. 1
3.9
2.7
4.3
10.6
0.2
1.1
0.6
12.7
8.8
14.0
34.5
0.7
3.6
2.0
100
69
110
272
6
28
15
Source; Boot, Allen t Hamilton Inc. estimates based on data supplied by Can Manufacturers Institute and interviews with can companies.
-------
EXHIBIT 3-9 (1)
U.S. environmental Protection Agency
COATING AND PRINTING OPERATIONS USED IN
THE MANUFACTURE OP THREE PIECE CANS
(Sheet Coating Operation)
Operation
Density
(lb. /gal.)
Coating Properties
Organic
Solvent
Sollda
-------
EXHIBIT 3-9 (2)
U.S. Environmental Protection Agency
Operation
Production
(base box (1000 base boxes3
hr.)
year)
Coating Consumption
(gal ion
basebox)
(qa1 ion
hour)
(1000 gal.
year)
VOC
(lb.
hour)
lb*.
(tons (	
year) 1000 bast; boxes)
Conventional Organics Systems
Sizing and print	ISO
Inside basecoat	ISO
Outside white and print	ISO
Outside sheet printing and varnish	ISO
240
240
240
240
.027
. 107
. 100
. 048
4.1
16.1
15.0
7.2
6.6
25. 7
24.0
11.5
19.7
77.8
62 .0
31 .7
15.8
62. 2
49.6
130
517
413
211
Low Solvent Systems
Sizing (waterborne)	ISO
Inside basecoat
High solids	ISO
Waterborne	ISO
Outside white
High eolids	150
Waterborne	150
Outside sheet print and varnish	150
(waterborne)
24o	034	5.1
t
240	.054	0.1
240	.098	14.7
240	.072	10.8
240	.095	14.3
240	.057	B.6
8.1	6.1	4.9	41
13.0	13.0	10.4	67
23.5	15.4	12.3	103
17.3	25.9	20.7	172
22.9	12.6	10.1	841
13.8	9.5	7.6	63
a. Assuming 1,600 hours per year of operation.
Source; Boor, Allen I. Hamilton Inc. estimates based on data supplied by Can Manufacturers Institute and Interviews with can
companies.
-------
Operation
Organic
Density	Solids	Solvent
{lb./gal.)	(wt. \)	(wt. «) (lb./gal.
Organic Syata
Intarlor body apray
(bear)	7.9
Inside atrlpe
Ibear S bev.)	8.0
(food)	B.O
Outside atrlpe
(beer)	8.0
End sealing compound
(beer t bev.)	7.1
(food)	7.1
26
13.5
13.5
13.5
39
39
100
100
100
100
100
100
5.85
6.9
6.9
6.9
4.3
4.3
Low Solvent Byatena (waterborne)
Intarlor body spray
(beer)	8.55
Inside atrlpe
(beer & bev.)	B.55
(food)	8.55
Outside stripe
(beer)	8.55
End sealing coapound
(beer 1 bev.)a	9.00
(food)a	9.00
20
36
36
36
40
40
20
20
20
20
1.37
1 .09
1.09
1.09
0.16
0.16
EXHIBIT 3-10 (1)
U.S. Environmental Protection Agency
EMISSIONS OF TYPICAL COATING
OPERATIONS USED IN THREE-PIECE
CAN ASSEMBLY
Coating Properties
Water	VOC	VOC	Yield
(gal./gal.	(lb. solvent/	(lb. solvent/	(1000 can/
coating)	gal. less water) gal. lncl. water)	gal.)
5.85
5.B5
6.92
6.92
6.92
6.92
70
70
6.92
6.92
50
4.33
4.33
4.33
4.33
10
10
0.66
3.99
1.36
0.53
0.53
2.30
2. 30
1 .08
1.08
70
70
0.53
2. 30
1.08
45
0.63
0.63
0.43
0 .43
0.16
0.16
10
10
-------
EXHIBIT 3-10 (2)
U.S. Environmental Protection Agency
Operation
Production Rate*"
(cana/atln.)
(Million
cans/yr.I
Coating Consumed
(qal./hr.)
(1000 gal./yr.)
(lb./hr.)
VOC
(tons/yr.)
(lb./mi 11 ion cans)
Organic Systems
Interior body
apray (beer)
Inaide stripe
(beer t bev.)
((ood)
Outside atripe
(beer)
End sealing
compound
(beer ( bev.)
(food)
400
400
400
400
400
400
120
120
72
120
120
72
6.00
0. 30
0. 30
0. 48
2.40
2.40
30.0
1.5
0.9
2.4
12.0
7.2
35.1
2.1
2.1
3.3
10.4
10.4
B7.8
5.	3
3.2
6.	3
26.0
15.6
1,463
88
88
138
433
433
Low Solvent Syateaa
(Uaterborne)
Interior body
apray (beer)
Inside stripe
(beer t bev.)
(food) ¦
Outside atripe
(beer)
bid sealing
compound
(beer t bev.)a
(food)*
400
400
400
400
400
400
120
120
72
120
120
72
4.8
0. 30
0. 30
0. 53
2.40
2.40
24.0
1.5
0.9
2.6
12.0
7.2
6.5
0. 3
0. 3
0.6
0.4
0.4
16.3
0.8
0.5
1.5
1.0
0.6
272
13
13
25
17
17
a.	waterborne systems are currently only used on aerosol and oil cans.
b.	Assumes 4,000 hours per year, as an averaqe of 3,000 hours for food cans and 5,000 hours for beer and beverage cans.
Sourcei Booz, Allen fc Hamilton Inc. estimates baeed on data supplied by CMI and individual can companies
-------
3.3.3	RACT Guidelines
The RACT Guidelines for VOC emission control are specified
as the amount of allowable VOC, in pounds per gallon of coating,
minus any water in the solvent system. To achieve this guide-
line, RACT suggests the following options:
Low solvent coatings
Waterborne
High solids
Powder coating
Ultraviolet curing of high solids coatings.
Incineration
Carbon adsorption.
The RACT guidelines have established different limitations
for each of four groups of can coating operations. Exhibit 3-11,
on the following page, presents the recommended VOC limitations,
compared with typical, currently available, conventional coatings.
3.3.4	Selection of the Most Likely RACT Alternatives
Projecting the most likely industry response for control
of VOC emissions in can manufacturing facilities is complicated
by the thousands of different products offered by the can
industry. Several general assumptions can be made.
The industry preferred response will be to use low
solvent coatings (primarily waterborne) wherever
technically feasible.
The choice between thermal incinerators and
catalytic incinerators will be based on the
availability of fuel and the preference of
the individual companies.
Incinerators with primary heat recovery will
be used in preference to those with secondary
recovery or no heat recovery.
The industry is not likely to install carbon adsorption
systems because of the very poor performance record of
this control technique within the can manufacturing
industry.
3-13
-------
EXHIBIT 3-11
U.S. Environmental Protection Agency
RACT GUIDELINES FOR CAN COATING OPERATIONS
Coating Operation
Recommended Limitation
kg. per liter
of coating
(minus water)
Sheet basecoat (exterior)
and interior) and over-
varnish; two-piece can
exterior (basecoat and
overvarnish)
0. 34
lbs. per gallon
of coating
(minus water)
2.8
Typical Currently
Available
Conventional Coatings
lbs. per gallon
of coating
(minus water)
4.1-5.5
Two- and three-piece can
interior body spray,
two-piece can exterior
end (spray or roll coat)
0. 51
4.2
6.0
Three-piece can side-seam	0.66
spray
End sealing compound	0.44
5.5
3.7
7.0
4.3
Source: U.S. Environmental Protection Agency
-------
Ten likely control alternatives, as well as the three
base cases, are discussed in the paragraphs below.
The percentage of each type of can likely to be manu-
factured by each of the control option alternatives,
by 1982, is summarized in Exhibit 3-12, on the following
page. This distribution was based on interviews with
can companies and relates to the entire U.S. market.
The resulting emissions per million cans, based on
these distributions and the cases described below,
are summarized in Exhibits 3-13 and 3-14, at the
end of this section. For cases involving inciner-
ation, the following assumptions were made.
Incinerator air flow is assumed to be
8,000 cubic feet (CF) per pound of solvent
entering the incinerator:
Incineration air inlet temperature
equals 300°F.
Lower explosive limit (LEL) is 2,500
CF per gallon of solvent at an inlet
temperature of 70°F. or 3,600 CF
per gallon at 300°F.
The incinerator operates at 10 percent
of the LEL, thus requiring 36,000 CF
of inlet air per gallon of solvent.
Assuming an average solvent density
of 4.5 pounds per gallon, the air-
flow is 8,000 CF per pound of solvent
entering the incinerator.
90 percent of the roller coating emissions are
collected and incinerated; the balance escapes
as fugitive emissions within the plant.
30 percent of the interior spray coating emissions
are collected and incinerated; the balance escapes
as fugitive emissions.
3-14
-------
EXHIBIT 3-12
U.S. Environmental Protection Agency
PERCENTAGE OF CANS MANUFACTURED
USING EACH ALTERNATIVE
Can Type
Water-
borne or
Other Low
Solvent
Coatings
Thermal
Incineration
with Primary
Heat Recovery
Print Only,
All Low Solvent
Coatings
Low Solvent
Coatings
Except
End Sealant
Which Is
Incinerated
UV Cured
Outside Varnish
Waterborne
Inside Spray
2-piece beer
and soft
drink
40
60
3-piece beer
and soft
drink
25
20
55
3-piece food
and other
cans
25
20
55
Source: Booz, Allen & Hamilton Inc.
-------
The theoretical energy consumption was assumed
to be the total energy required to heat the air,
less a credit for the heat content of the solvent
and heat recovered in the primary heat exchanger.
The theoretical energy consumption in heating
air from 300°F to an incineration temperature
of 1100°F is 15.6 BTU/CF.
Assuming the furnace operates at 90 percent
efficiency, the energy requirement would be
16.2 BTU/CF.
The heat content of the solvent is assumed
to be 16,000 BTU per pound or 2 BTU per cubic
foot of inlet air solvent mixture, reducing
the total, external energy demand 14.2 BTU/CF.
However, the furnace recovers 60 percent of
the heat in a heat exchanger, reducing the
energy requirements to 5.7 BTU/CF.
The energy cost was assumed to be $2.25 per
million BTU.
The capital cost of an incinerator was assumed
to be $20,000 per 1,000 CFM installed7based on
industry interviews. Thus, 7.5 pound's of solvent
per hour can be incinerated in a $20,000 incinera-
tor at a fuel cost of $0.77.
3.3.4.1 Two-Piece Beer and Soft Drink Cans—1978 Base Case
At the present time, the majority of beer and soft drink
cans are produced with one exterior coating, a procedure defined
as print and varnish.
The can is printed directly over the base metal and
then varnished using a high solvent organic-borne
varnish—eliminating the base coat.
3-15
-------
The interior of the can is sprayed, using a high
solvent interior body spray.
The end of the can is spray coated, using a high
solvent body spray.
The coating consumption is approximately 250 gallons per
million cans, resulting in emissions of 0.67 tons per million
cans.
3.3.4.2 Two-Piece Beer and Soft Drink Cans—Waterborne
Coatings as Proposed in RACT
In this alternative,	all the coating operations currently
employed in the base case	are assumed to have been converted to
waterborne coatings. The	cost of converting to waterborne
systems was assumed to be	minimal.
The capital cost for converting each of three
coating operations was estimated to be $10,000.
This results in an annualized cost of $30 per
million cans—assuming that the annualized cost
of capital is 25 percent of the total installed
capital cost and that 250 million cans are pro-
duced annually on the coating line.l
The cost of the coatings is the same as for
conventional coatings—industry sources believe
that by 1980 this will be the case.
The energy consumption is the same—this would
appear reasonable since most energy consumed is
used to heat the belt and the metal cans.
The yield (spoilage) is the same—it appears that
the industry will continue to encounter significant
spoilage in changing over to new coatings. However,
as the technology is established, it is assumed
that spoilage will decline to levels currently
experienced.
The total incremental annualized compliance cost of using
waterborne solvents is estimated to be about $30 per million
cans. This represents a direct cost increase of less than 0.05
percent. The emissions would be reduced to 0.19 tons per
million cans—a 75 percent reduction at a cost of about $62
per ton of VOC removed.
It is estimated that 4 0 percent of the two-piece beer
and soft drink cans would be produced using this alternative
by 1981.
1 Annualized capital cost includes depreciation, interest,
taxes, insurance and maintenance.
3-16
-------
3.3.4.3 Two-Piece Beer and Soft Drink Cans—Base Case with
Thermal Incinerators and Primary Heat Recovery
This alternative assumes that all coating operations
currently employed in the base case are retrofitted with thermal
incinerators. This alternative is presently employed on several
two-piece can lines in other states. -As a basis for calculation
the following configuration is assumed:
The capital required for incinerators would
be about $66,000—at $20,000 installed cost
per thousand CFM.
The annualized capital cost would be about $66
per million cans.
The energy costs to operate the incinerators would
be about $62 per million cans, at $2.25 per million
BTUs.
Material cost would be comparable to the base case.
The total incremental cost to incinerate emissions from
conventional coatings would be about $128 per million cans.
This represents a cost increase of approximately 0.2 percent,
to reduce emissions by about 42 percent to 0.39 tons per million
cans. The reason for the low overall efficiency is that a
considerable portion of the VOC escapes as fugitive emissions
prior to incineration.
90 percent of the exterior coating emissions reach
the incinerator.
30 percent of the interior spray coating emissions
reach the incinerator.
The cost of incineration is about $441 per ton of emission
removed. It is estimated that no two-piece can production will
utilize this alternative by the end of 1981 because of the
high cost and because satisfactory water-based coatings are
expected to be available.
3-17
-------
3.3.4.4	Two-Piece Beer and Soft Drink Cans—Supplementary
Scenario I
This alternative is based upon combining low solvent
coatings with industry product trends that lower the product
cost. It includes:
Print only, eliminating all coating operations—
this is used for some aluminum cans at the present
time
Waterborne interior body spray as proposed by RACT
End coatings using a low solvent varnish—either
waterborne or high solids.
The elimination of one coating operation would result in
a net savings of about $750 per million cans, composed of a
material savings of about $540 and an energy savings of about
$230 per million cans. The incremental capital cost would be
$20 per million cans. Emissions are reduced by 79 percent to
0.14 tons per million cans, at a savings of about $1,450 per ton
of emissions reduced or about $1,300 per ton of emission controlled.
It is estimated that 60 percent of the cans produced in 1982 will
utilize this method.
3.3.4.5	Two-Piece Beer and Soft Drink Cans—Supplemental
Scenario II
This scenario is based upon the use of an experimental UV
cured varnish, a waterborne interior body spray and an end
coating using a low solvent varnish.
Because of the current high cost of UV cured varnishes,
this approach is only experimental. Based on today's prices
of about $6.50 per gallon for conventional varnishes and $16.25
for UV cured varnishes, this is the most expensive approach to
emission reduction, about $734 per million cans.
The incremental varnish cost is about $810 per
million cans.
The energy saving is about $105 per million cans.
The annualized capital cost for converting the
coating systems to UV cured and waterborne coatings
is about $30 per million cans.
This scenario provides a 78 percent reduction in emissions
from the base case, to 0.15 tons per million cans at a cost of
about $1,400 per ton of emission reduced. Because of the high
cost, it is not expected that this approach will be implemented
by 1982.
3-18
-------
3.3.4.6	Three-Piece Beer and Soft Drink Cans—Base Case
At the present time, the majority of three-piece beer
and soft drink cans are produced by the following coating
operations:
Interior base coat
Decoration and over varnish
Interior and exterior stripe
Interior spray coating
End sealant.
The production of beer cans differs from the production of
soft drink cans in some respects, the impact of which has not
been considered in this study.
Beer cans almost always have an exterior stripe,
but soft drink cans frequently do not.
Beer cans always have an inside spray coating but
soft drink cans usually do not. However, soft
drink cans frequently have a heavier inside base
coat to offset the elimination of the spray
coating.
Consideration of these and a variety of other differences has
been eliminated to reduce the complexity of the study. Because
of the declining importance of three-piece beer and beverage
cans, the impact of errors resulting from these simplifying
assumptions will be smaller in 19 82 than it would be currently.
The total emissions from this alternative are 1.79 tons
per million cans (2.5 times the emissions from a similar two-
piece can) .
3.3.4.7	Three-Piece Beer and Soft Drink Cans—Waterborne
Coatings as Proposed in RACT
In this alternative, all the coating operations currently
employed in the base case are assumed to be converted to water-
borne coatings. The cost of converting to waterborne systems
was assumed to be minimal.
The capital cost for converting each of five
operations on the coating line was assumed to
be $10,000. This results in an annualized
capital cost of $104 per million cans—assuming
that the cost of capital and maintenance is 25
percent of the total installed capital cost and
that 120 million cans are produced annually on
the coating line.
3-19
-------
The raw material cost of coatings is the same
as for conventional coatings.
The energy consumption is the same—this would
appear reasonable since most of the energy is
consumed to heat the wickets, belts and the can
metal.
The yield (spoilage) is the same—it appears that
the industry will continue to encounter signi-
ficant spoilage in changing over to new coatings.
However, as the technology is established, it is
assumed that spoilage will decline to current
levels.
The total incremental cost to convert to waterborne
coatings is estimated to be about $100 per million cans.
This represents a cost increase of about 0.15 percent. The
emissions would be reduced to 0.34 tons per million cans, an
80 percent reduction at a cost of about $72 per ton.
It is estimated that 25 percent of all beer and soft
drink facilities will employ this option for all their cans.-
The acceptance of this technology will be retarded by the lack
of a complete line of available coatings. Thus, even if the bulk
of the applications can be converted to water-based coating
systems, many lines will operate with solvent-based systems
part of the time and will, therefore, require installation
of control devices.
3.3.4.8 Three-Piece Beer and Soft Drink Cans—Base Case with
Thermal Incinerators and Primary Heat Recovery
This alternative assumes that all coating operations
currently employed in the base case are retrofitted with
thermal incinerators. Thermal incinerators are currently
being employed on a number of coating lines in other states.
The capital required for incinerators to control the
five emissions sources on a typical line would be about
$320,000—assuming an installed cost of $20,000 per 1, 000 CFiM.
The annualized capital cost would be about $668
per million cans.
The energy cost to operate the incinerators would
be $166 per million cans.
The material costs would be the same as the base
case.
3-20
-------
The total incremental cost of adopting thermal in-
cineration is estimated to be about $834 per million cans.
This represents a cost increase of about 1.0 percent. The
emissions would be reduced by 59 percent to 0.74 tons per
million cans at a cost of $794 per ton of emissions
removed. Because of the high costs of this alternative, it
is estimated that it will be employed only on 20 percent of
all three-piece beer and soft drink cans manufactured in
Georgia in 1982.
3.3.4.9	Three-Piece Beer and Soft Drink Cans--All Waterborne
Except End Sealant, Which Is Thermally Incinerated
It is likely that the can industry will adopt a hybrid
system which will focus on waterborne or possibly other
low solvent coatings and thermal incineration of the end
sealant and which probably will not be universally available
by 1982. Because end sealing compounds represent approximately
12 percent of the VOC from three-piece beer and soft drink can
manufacture, this case was developed under the assumption that
technology-based exceptions will not be granted.
The capital cost of converting four coating
operations and adding one incinerator would be
about $340 per million cans.
The additional energy costs of one incinerator
would be about $9 3 per million cans.
Material cost would be the same.
The total incremental cost of this scenario would be
about $171 per million cans. This represents a cost in-
crease of about 0.2 percent, to reduce emissions by 80
percent. It is estimated that about 55 percent of the beer
and soft drink cans will be produced using this technology.
3.3.4.10	Three-Piece Food Cans—Base Case
Three-piece food cans are currently produced utilizing
the following coating operations:
Interior base coat
Exterior base coat
Interior stripe
End sealant.
The emissions from this case are estimated to be 0.99
tons per million cans.
3-21
-------
3.3.4.11	Three-Piece Food Cans—Waterborne as Proposed in RACT
In this alternative, all the coating operations currently
employed in the base case have been converted to waterborne
coatings.
The total incremental cost to convert to waterborne
coatings is estimated to be $113 per million cans. A 76
percent reduction in emissions is achieved, to 0.24 tons per
million cans. It is unlikely that a complete spectrum of
waterborne coatings will be available to meet industry
requirements by 1982 because the need to achieve FDA approval
for the broad spectrum of products required has caused coating
manufacturers to focus their product development on the large-
volume coatings required for two-piece beer and soft drinks.
As a result, it is estimated that only 25 percent of
the cans will be produced using this control approach.
3.3.4.12	Three-Piece Food Cans—Base Case with Thermal
Incinerators and Primary Heat Recovery
This alternative assumes that all coating operations
currently employed in the base case are retrofitted with
thermal incinerators.
The total incremental cost of adopting this approach
is estimated to be about $690 per million cans; about $595
in capital cost and $95 in energy costs. Emissions would
be reduced by 81 percent, to 0.19 tons per million cans.
An estimated 20 percent of the cans would be produced using
this approach.
3.3.4.13	Three-Piece Food Cans—All Waterborne Except
End Sealant, Which Is Thermally Incinerated
Because waterborne and other low solvent coatings are
not yet available for many applications, it is likely that
the industry will develop a hybrid approach utilizing
waterborne coatings where available and incinerating the
balance of the emissions. The end sealing compound appears
to be the coating most likely to be unavailable in low
solvent form by 1982—end sealing compounds release about
18 percent of the VOC emissions from food can manufacturing
operations.
3-22
-------
The total incremental cost of this scenario is about
$200 per million cans; $500 in capital cost and $100 in
energy costs. The emissions are reduced by about 79 percent
to 0.25 tons per million cans. It is estimated that 55 percent
of the cans would be produced using this approach.
3.3.4.14 Sheet Coating Feeder Plant—Low Solvent As
Proposed in RACT
In this alternative, all the sheet coating and end
compounding operations will be converted to waterborne. The
total incremental cost to convert to waterborne is estimated
to be about $15 per million cans. It is unlikely that a
complete spectrum of waterborne coatings will be available
to meet industry requirements by 1982; as a result, 60 percent
of the stock will be coated with waterborne coatings. However,
because sheet coating lines are commonly used to make a variety
of cans, 80 percent of the lines would still need to be con-
trolled with incineration.
~ * * *
Exhibit 3-13, on the following page, summarizes the
emissions and incremental cost of each of the alternatives
described above for two-piece cans, per million cans produced
under that alternative. Exhibit 3-14, following Exhibit 3-13,
presents similar data for the three-piece can control
options discussed above.
3-23
-------
Alternative
Annualized Incremental Costs
Annualized
Capital Capital Coat Materials
<$> ($) ($)
1978 BASE CASE	0	0	0
Print and varnish
Noncon£irming interior
body spray (exempt
solvents)
End .coating
WATERBORNE AS PROPOSED 120	30	0
IN RACT
BASE CASE Willi THERMAL 266	66	0
INCINERATORS &
PRIMARY HEAT RECOVERY
SUPPLEMENTAL SCENARIO 1 80
Print only
Waterborne interior
body spray
End coating using a
low varnish solvent
20	(540)
SUPPLEMENTAL SCENARIO 2 120	30	610
Print
UV cured varnish
Waterborne interior
body spray
End coating using a
low solvent varnish
Energy
<$)
0
0
62
( 230 )
105
a. Not Applicable
Source: Booz, Allen & Hamilton Inc. estimates
EXHIBIT 3-13
U.S. Environmental Protection Agency
EMISSIONS FROM COATING TWO-PIECE ALUMINUM
BEER AND SOFT DRINK CANS PER MILLION CANS
	Emissions	
Coating	VOC	VOC	Incremental
Total	Input	Emissions	Decrease	Cost
<$)	(gal.)	(tons)	(tons)	»	(per ton)
0	250	0.67	a	a	a
30	340	0.19	0.48	75	63
128	250	0.39	0.29	42	441
(750)	200	0.14	0.53	79	1415
734	240	0.15	0.52	78	1411
-------
Case		Annualized Incremental Costs	
Annualized
Capital
Capital	Coat/Milliona Materials Energy Total
(S)	<$)	(5)	<$)	($>
1978 BASE CASE*3	0
Interior base coat
Decoration and/or
varnish
Interioring and
exterioring stripe
Interior spray
End sealant
WATERBORNE AS PROPOSED	416
IN RACT
BASE CASE WITH THERMAL 2670
INCINERATORS AND HEAT
RECOVERY PRIMARY
SUPPLEMENTAL SCENARIO 3 686
Waterborne except end
sealant which is incin-
erated
1978 BASE CASE C	0
Interior base coat
Exterior base coat
Interior stripe
End sealant
WATERBORNE AS PROPOSED 453
IN RACT
BASE CASE WITH THERMAL 2380
INCINERATORS AND
PRIMARY HEAT RECOVERY
SUPPLEMENTAL SCENARIO 4 768
All waterborne except
end sealant which is
incinerated
-------
3.4 COST AND VOC BENEFIT EVALUATIONS FOR THE MOST LIKELY
RACT ALTERNATIVES
Cost and benefit evaluation for alternative VOC emission
controls are presented in this section based upon the costs
per million cans that were developed in the previous section.
The extrapolation to statewide industry costs is based upon
total can production and emissions for the typical can manu-
facturing processes. It is not based upon the representative
plants.
3.4.1 Costs for Alternative Control Systems
Although there is no typical can manufacturing facility,
the following four representative plants describe the situation
in most can manufacturing facilities.
Representative Plant A produces two-piece beer and
soft drink cans on two lines. Each line operates
at 650 cans per minute for 6,500 hours annually,
to produce approximately 250 million cans—total
plant production is 500 million cans.
Representative Plant B produces 80 percent three-
piece beer and soft drink cans and 20 percent three-
piece food cans using three assembly lines. The
sheet coating lines operate at 2.5 base boxes per
minute for about 4,000 hours per year, to support
the three assembly lines. Each can assembly line
operates at 400 cans per minute, the beer lines
for 5,000 hours annually and the food can lines
for 3,000 hours annually.
Representative Plant C coats and decorates flat
stock for use in satellite assembly plants. The
plant coats at 2.5 base boxes per minute. Its
operating rate is approximately 1,000 hours per
satellite plant production line. Assuming the
plant supports four lines, its operating rate
would be 4,000 hours annually.
Representative Plant D produces food cans from
precoated stock. It contains two can assembly
lines, each of which operates at 400 cans per
minute for 5,000 hours annually. The total plant
production is 144 million cans.
3-24
-------
The capital cost to adopt the alternative controls to
the four representative plants ranges from $20,000 (to convert
the can assembly plant to waterborne coatings) to more than
$400,000 (to retrofit the three-piece coating and assembly
plant with incinerators). The incremental operating costs
(energy plus 25 percent of capital) range from a savings of
$375,000 (for the two-piece beer and soft drink plant that was
converted to "print only") to a cost of $387,000 (for operating
incinerators at the three-piece coating and assembly plant).
Capital and annual operating costs for each of the representative
plants are presented for each applicable alternative on
Exhibit 3-15, on the following page.
3.4.2	Extrapolation of the Costs to the Statewide Industry
The costs developed are incremental costs based on the
production volume and mix estimate for 1977. Industry changes
related to plant closings, conversion to two-piece lines, con-
sumption patterns or other areas not directly related to RACT
implementation were not included. One exception is that the
trend to print-only on existing lines was addressed and the
portion allocated to RACT was estimated and included in the
final figures.
Extrapolation of the costs to the statewide industry
requires first that the industry in the state of Georgia
be segmented. That segmentation and the inferred production
of each segment are shown in Exhibit 3-16, following Exhibit
3-15. The exhibit shows the method by which the production
was estimated, starting with the estimated emissions, presented
in Exhibit 3-7, and relating these to the factors developed from
Exhibits 3-8, 3-9 and 3-10 and presented in Exhibits 3-13 and 3-14.
Exhibit 3-17, following Exhibit 3-16, shows an extra-
polation of the cost of VOC emission control to the state
of Georgia. The cost were developed by undertaking the
following steps:
1.	Distribute the estimated can production (Exhibit 3-16)
by the percentage of cans manufactured using each
alternative (Exhibit 3-12). This distribution appears
under the heading "Can Production" on Exhibit 3-17.
An adjustment was made in the three-piece beverage can
figure for the estimated volume of sheet coated in
other states.
2.	Multiply these numbers by the applicable figures in
Exhibits 3-13 and 3-14. For example, to calculate
the capital investment for three-piece beer and soft
drink cans controlled by thermal incineration, multiply
the following figures:
110 million cans. This figure appears in Exhibit
3-17 under Can Production, Thermal Incineration,
three-piece beer and soft drink cans.
3-25
-------
Representative Plant
Waterborne
Capital Annual
Expense
The rma1 Inc1ne rators
Annual
Expense
Capital
A. 2-piece beer & soft
drink can
2 lines
500 million cans
60
IS
132
64
B. 3-piece beer & soft	100	25	415	387
drink and food can
coating and assembly
plant
1 coating line
1 sheet varnish line
3 assembly lines
310 million cans
C.	Sheet coating facility	30	8	255	143
for 50% beer cans &
50% food cans
1 sheet coating line
1 sheet varnishing line
1	end compounding line
Produces 135,000 base
boxes
Supplies stock for 290
mill ion cans
D.	Food can assembly plant	20	5	60	20
2	assembly lines
with inside striping
144 million cans
a.	Not applicable
b.	Not considered to be a likely response by 1982
Source: 8ouz, Allen £. Hamilton Inc. estimates
EXHIBIT 3-15
U.S. Environmental Protection Agency
COST OF IMPLEMENTING RACT ALTERNATIVES FOR
REPRESENTATIVE CAN MANUFACTURING PLANTS ($1,000)
Print Only/Waterborne
Capital	Annual
Expense
40	(375)
UV Cured/Waterborne
Capital Annual
Expense
60	367
Waterborne
Incinerate End Sealant
Capital	Annual
Expense
a	a
a	abb	138	106
a	a	b	b	82	34
-------
Type of Product
Estimated Emissions3
(tons)
2-piece beverage cans
1,420
3-piece beverage cans
Assembly
Sheet coating
Out-of-state estimate
710
320
160
Subtotal
1, 190
EXHIBIT 3-16
U.S. Environmental Protection Agency
CALCULATION OF INFERRED PRODUCTION OF CANS AND SHEET
STOCK IN GEORGIA
Emissions Factor
(tons per millioncans)^
Inferred Production0
(million cans)
0.67
2,120
1.79
665
3-piece food cans
Assembly
Sheet coating
Subtotal
320
437
0.99
765
757
TOTAL
3, 367
3,550
a.	Includes estimates of emissions incurred in the production of sheet shipped from out-of-state, derived
from industry interviews
b.	From Exhibits 3-13 and 3-14
c.	Calculated by dividing estimated emissions by emission factor
Source: Booz, Allen & Hamilton Inc.
-------
CAN TYPE
Can Production
(millions of units)
Water-
borne or	Thermal
Other Low	Incineration
Solvent	with Primary
Coatings	Heat Recovery
Print Only,
All Low Solvent
Coatings	
Low Solvent
Coatings
Except
End Sealant
Which Is
Incinerated Total
2-Piece
Beer and
Soft Drink
Cans	850	0	1,270	a	2,120
3-Piece
Beer and
Soft Drink
Equivalent*3 130	110	a	290	530
3-Piece
Food and
Other Cans 190	150	a	420	760
To tala	1,170	260	1,270	710	3,410
Amount
Not
Resulting
From
RACI'
Total
Applicable
To
RACT
EXHIBIT 3-17(1)
U.S. Environmental Protection Agency
COST OF COMPLIANCE TO RACT FOR THE
CAN MANUFACTURING INDUSTRY IN GEORGIA
Capital Investment
(thousands of $)
Water-
borne or
Other Low
Solvent
Thermal
Incineration
with Primary
Coatings Heat Recovery
Print Only,
All Low Solvent
Coatings	
Low Solvent
Coatings
Except
End Sealant
Which Is
Incinerated Total
100
100
200
50
290
200
540
90
240
360
650
100
320
520
770
1,510
50
50
240
650
50
520	1,460
-------
EXHIBIT 3-17(2)
U.S. Environmental Protection Agency
CAN TYPE
Annual Compliance Cost
(thousands of $)
Water-
borne or
Other Low
Solvent
Coatings
Thermal
Incineration
with Primary
Heat Recovery
Print Only,
All Low Solvent
Coatings	
Low Solvent
Coatings
Except
End Sealant
Which Is
Incinerated
Total
Emission Reduction
	(tons)
Water-
borne or	Thermal
Other Low	Incineration
Solvent	with Primary
Coatings	Heat Recovery
Print Only,
All Low Solvent
Coatings
Low Solvent
Coatings
Except
End Sealant
Which Is
Incinerated
Total
Annual
Unit
Cost of
Emission
Reduction
($ per ton)
2-Piece
Beer and
Soft Drink 30
(950)
(920)
410
670
1,080
(850)
3-Piece
Beer and
Soft Drink
equivalent*3
10
90
60
160
190
120
420
730	220
3-Piece
Food and
Other Cans
TOTAL
40
80
100
190
a
(950)
90
150
230
(530)
140
740
120
240
670
320
740
580
2, 390
400
(220)
Amount not
RACTC
Total RftCT
80
190
(1,010)
65
150
1,010
480
740
240
330
340
740
330
2,060
233
a.	Not applicable
b.	Adjusted downward by 20 percent to allow for sheet coating done out-of-state (33% of sheet times 60% of emissions from sheet coating) .
c.	The trend to print only is expected to occur even in the absence of RACT regulations. Therefore the costs and emission reductions related
to this are subtracted from the total*
Source: Booz, Allen & Hamilton, Inc.
-------
$2,670. This figure appears in Exhibit 14, under
capital costs for the first base case with incinerators.
The product is $293,000 which was rounded to $290,000
and positioned in the Exhibit 3-17 matrix.
3.	After all similar calculations were completed the cost for
each type of can and each control alternative was totaled.
4.	Annual unit cost of emission reduction was calculated by
dividing the annual compliance cost by the total emission
reduction for each can type and for the total.
Based on the above assumptions, the differential costs are
estimated at $1.51 million in capital expenses. Because of the
annual cost savings involved, the industry will probably take
the steps indicated for two-piece cans whether or not the regula-
tion is in place. Thus, the full cost cannot be credited to the
RACT regulation. The capital cost applicable to the regulation
is estimated at $1.46 million. Annual compliance costs, on the
same basis, are projected to be $480,000. The bulk of this
represents capital related costs and energy cost for incineration.
Annual unit cost of emission reduction is estimated to be
$230 per ton. Three-piece food and other cans have the highest
unit cost, $400 per ton.
The substantial cost of developing, testing and obtaining
FDA approval of low solvent coatings has not been included in
this evaluation, because it is outside the scope of this study
and the bulk of it will probably be incurred at the national
level. An evaluation of these costs and the degree to which they
should properly be allocated to each state must be undertaken
on a national basis.
A factor that should be taken into account is that the
analysis assumes that production lines will be converted in
proportion to the number of cans made by each production mode.
Where a single line makes several types of cans, a portion of
which can be converted to low solvent systems, the production
line might still require installation of afterburner control
under RACT requirements, though its use would only be intermit-
tent. The potential effect of this on the cost estimates is
difficult to quantify. It is discussed below.
If we assume that all sheet coating and assembly lines
were required to install incinerators, to maintain capability
to utilize both conventional and low solvent coatings, the
projections would be changed as follows:
Capital expenditure would be increased by $1,400,000,
or 93 percent.
3-26
-------
Annual cost would increase by $350,000, or 73 percent.
This represents the capital related costs only.
Emissions reduction estimates would be unchanged.
The figures presented above represent outside limits with
actual experience likely to fall somewhere between the two
figures. Since most of the can fabrication facilities in
Georgia are dedicated to beverage cans, for which low solvent
coating systems are likely to be developed by 1982, the effect
of this capability maintenance factor will be felt on relatively
few production lines.
3-27
-------
3.5 DIRECT ECONOMIC IMPLICATIONS AND SELECTED SECONDARY IMPACTS
This section presents the direct economic implications
of implementing RACT controls to the statewide industry, in-
cluding: availability of equipment and capital; feasibility
of the control technology; and impact on economic indicators,
such as value of shipments, unit price, state economic
variables and capital investment.
3.5.1	RACT Timing
RACT must be implemented statewide by January 1, 19 82.
This implies that can manufacturers must have either low
solvent coatings or VOC control equipment installed and
operating within the next three years. The timing of RACT
imposes several requirements on can manufacturers including;
Obtaining development quantities of low solvent
coatings from their suppliers and having them
approved by their customers
Having coating makers obtain FDA approval where
necessary
Obtaining low solvent coatings in sufficient
quantity to meet their volume requirements
Acquiring the necessary VOC control equipment
Installing and testing incinerators or other VOC
control equipment to insure that the system
complies with RACT.
The sections which follow discuss the feasibility and the economic
implications of implementing RACT within the required timeframe.
3.5.2	Feasibility Issues
Technical and economic feasibility issues implementing
RACT controls are discussed in this section.
The can manufacturing industry, in conjunction with coating
suppliers and incinerator vendors, has extensively evaluated
most of the approaches to meeting RACT. The feeling in the
industry is that, except for one notable exception, RACT can be
achieved by January 1, 198 2, using low solvent coatings—
primarily waterborne. The coating most likely to be unavailable
in 1982 is the end sealing compound. The physical characteristics
of this material, as well as its method of application, do not
lend themselves to incineration. Currently, the coating is
air dried over a period of 24 hours.
3-28
-------
The can manufacturers have shut down a significant number
of three-piece can manufacturing facilities. It appears likely
that the implementation of RACT might accelerate this trend
because of the lower cost of compliance with two-piece cans and
the probable reluctance on the part of can manufacturers to
invest capital in facilities producing products with declining
demand.
3.5.3	Comparison of Direct Cost with Selected Direct
Economic Indicators
This section presents a comparison of the net increase
in the annual operating cost of implementing RACT with
the total value of cans sold in the state, the value of
wholesale trade in the state and the unit price of cans.
The net incremental operating cost from the uncontrolled
level to can manufacturers is estimated to be 0.48 million, or
0.17 percent of current value of shipments.
3.5.4	Ancillary Issues Relating to the Impact of RACT
This section presents two related issues that were developed
during the study.
The Can Manufacturing Institute has proposed an option to
the RACT to encompass a plantwide emissions basis. This would
allow a credit from one operation, where emissions were reduced
to below the RACT recommended level, to be applied to another
operation that is not in compliance. The plant would be in
compliance if the total emissions were reduced to the level
proposed in RACT. It appears that the impact of this alternative
would be to permit can manufacturers to comply without investing
heavily to control a small proportion of emissions.
High solvent coatings represent a considerable fire hazard.
The conversion to low solvent coatings has reduced fire insurance
costs for at least one can manufacturing facility.
*	ic	*	*
Exhibit 3-18, on the following page, presents a summary of
the current economic implications of implementing RACT for can
manufacturing plants in the State of Georgia.
3-29
-------
EXHIBIT 3-18
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR CAN MANUFACTURING
PLANTS IN THE STATE OF GEORGIA
Discussion
Current Situation
Number of potentially affected facilities
Indication of relative importance of indus-
trial section to state economy
Current industry technology trends
VOC emissions
Industry preferred method of VOC control
to meet RACT guidelines
There are six can manufacturing
facilities
The 1977 value of shipment was about
$290 million.
Beer and beverage containers rapidly
changing to two-piece construction
3,200 tons per year
Low solvent coatings (waterborne) with
incineration as an interim approach for
older facilities
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
Problem area
VOC emission after control
Cost effectiveness of control
$1.5 million
$10.5 million
Assuming a direct pass-through of costs,
no significant change in price
2,000 equivalent barrels of oil annually
to operate incinerators
No major impact
No major impact
Accelerated technology conversion to
two-piece cans
Low solvent coating technology for end
sealing compound
820 tons per year (25 percent of current
emission level)3
$230 annualized cost/annual ton of VOC
reduction from current level of control
a. This represents emission after control due to RACT and industry changes to print-only
(not resulting from RACT), 330 tons of the reduction is credited to print-only change.
Source: Booz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
Control of Volatile Organic Emissions from Existing Station-
ary Sources, EPA-450/2-77-008, May 1977.
Air Pollution Control Engineering and Cost Study of General
Surface Coating Industry, Second Interim Report, Springborn
Laboratories, Enfield, CT, August 23, 1977
Private conversations at the following companies:
American Can Company, Greenwich, Connecticut
Continental Can Company, Chicago, Illinois
Can Manufacturers Institute, Washington, D.C.
Standard Container Company, Homerville, Georgia
-------
-------
5.0 THE ECONOMIC IMPACT OF IMPLEMENT-
ING RACT FOR PLANTS SURFACE COATING
PAPER IN THE STATE OF GEORGIA
This chapter presents a detailed analysis of the
impact of implementing RACT for plants in the State of
Georgia which are engaged in the surface coating of
paper. This is meant to include protective or decorative
coatings put on paper, pressure-sensitive tapes regardless
of substrate, related web coating processes on plastic
film and decorative coatings on metal foil, but does not
include conventional printing processes which apply
inks.
Twelve counties, considered urban nonattainment
counties, are included in the statewide analysis including:
Clayton
Cobb
Coweta
DeKalb
Douglas
Fayette
Fulton
Gwinnett
Henry
Muscogee
Paulding
Rockdale.
The chapter is divided into five sections:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Cost and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic impacts.
Each section presents detailed data and findings
based on analyses of the RACT guidelines; previous
studies of paper coating; interviews with paper coaters,
coating equipment and materials manufacturers; and a
review of pertinent published literature.
5-1
-------
5.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining
estimates of:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Cost of controlling VOC emissions
Economic impacts
for plants engaged in the surface coating of paper. The
quality of these estimates is discussed in the last part
of this section.
5.1.1 Industry Statistics
Paper coating is practiced in a number of industries.
Among products that are coated using organic solvents
are: adhesive tapes; adhesive labels; decorated, coated
and glazed paper; book covers; office copier paper;
carbon paper; typewriter ribbons; photographic film;
paper cartons; and paper drums. The firms coating paper
are classified in a number of groupings in the U.S.
Department of Commerce's Standard Industrial Classifi-
cation system. The major coaters may be found in the
following 16 SIC groups:
SIC	Description
2611	Pulp mills
2621	Paper mills, except building paper mills
2631	Paperboard mills
2641	Paper coating and glazing
2643	Bags, except textile bags
2645	Diecut paper and paperboard and cardboard
2649	Paper converting, n.e.c.
2651	Folding paperboard boxes
3291	Abrasive products
3292	Asbestos products
3293	Gaskets, packing and sealing devices
3497	Metal foil and leaf
3679	Electronic components, n.e.c.
3842	Orthopedic, prosthetic and surgical
appliances and supplies
3861	Photographic equipment and supplies
3955	Carbon paper and inked ribbons
5-2
-------
This list does not include plants listed in the SIC
category 2700 (Printing, Publishing and Allied Industries),
where paper coating other than printing may also be a
part of the overall processing of the printed product.
Statistics concerning these industries were obtained
from a number of sources. All data where possible were
converted to the base year 1977 for the state using
scaling factors developed from U.S. Department of Commerce
data as presented in County Business Patterns. The
primary sources of economic data were the 1972
Census of Manufactures and 1976 Annual Survey of Manufactures.
The Georgia Directory of Manufacturers and industry
oriented annuals such as Lockwoods1 Directory and Davidson's
Blue Book and the Thomas Register of American Manufacturers
were used to identify some of the individual companies
engaged in paper conversion (i.e., coating of paper in
roll form for sale to other manufacturers) and to identify
other paper coating firms in the state.
The actual firms expected to be affected by the
proposed regulations were identified from this tentative
list through a telephone interview with representatives
from each facility. Many of the facilities contacted
were not paper coaters and also many coated with water-
based solvents, exterior or hot melt.
5.1.2	VOC Emissions
As mentioned above, the final list of coating firms
with significant VOC emissions in the state was prepared
from telephone interviews with the individual firms.
These firms either disclosed their actual emissions or
provided information from which the emissions could be
extrapolated.
5.1.3	Processes for Controlling VOC Emissions
Processes for controlling VOC emissions from sources
included in the paper coating category are described in
Control of Volatile Organic Emissions from Existing
Stationary Sources, Volume II (EPA-450/2-76-028). The
feasibility of applying the various control methods to
paper coating discussed in this document was reviewed
with coating firms, coating suppliers, coating equipment
manufacturers and industry associations. These methods
include both coating reformulation and the use of control
devices, such as incinerators and carbon adsorbers.
5-3
-------
Because of the wide variety of coating processes
and coating materials in use, most methods of control
will find some applicability. The percentage of emissions
to be controlled by reformulation and by control devices
was estimated based on a review of the literature and on
information obtained from the interviews described
above.
5.1.4 Cost of Control and Estimated Reduction of VOC
Emissions'
The overall costs of control of VOC emissions in
accord with the proposed regulations were determined
from:
Current emissions
Type of control to be used
A development of capital, operating and energy
requirements for an average-sized model installa-
tion
Extrapolation of the model plant costs to an
industry total based on current emissions.
Model plant costs were primarily based on information
provided from:
Control of Volatile Organic Emissions from
Stationary Sources, Volume I (EPA450/276028)
Air Pollution Control Engineering and Cost
Study of General Surface Coating Industry, Second
Interim Report, Springborn Laboratories.
Additional cost data was supplied by equipment and
material suppliers and published literature sources.
Major coaters were consulted to determine industry views
on acceptable control methods and, in some cases, to
provide direct estimates of their projected control
costs and experience in control equipment installations.
One coating firm provided a detailed cost estimate for
their Georgia plant. The estimated cost was based on
actual expenditures for control equipment at another
plant they operate in California.
5-4
-------
5.1.5 Economic Impacts
The economic impacts were determined by analyzing
the lead time requirements to implement RACT, assessing
the feasibility of instituting RACT controls in terms of
capital and equipment availability, comparing the direct
costs of RACT control to various state economic indicators
and assessing the secondary effects on market structure,
employment and productivity as a result of implementing
RACT controls in the state.
5.1.6 Qua-lity of Estimates
Several sources of information were utilized in as-
sessing the emissions, cost and economic impact of
implementing RACT controls on the surface coating of
paper in Ohio. A rating scheme is presented in this
section to indicate the quality of the data available
for use in this study. A rating of "A" indicates hard
data (data that are published for the base year), "B"
indicates data that were extrapolated from hard data and
"C" indicates data that were not available in secondary
literature and were estimated based on interviews,
analysis of previous studies and best engineering judgment.
Exhibit 5-1, on the following page, rates each study
output listed and the overall quality of the data.
5-5
-------
EXHIBIT 5-1
U.S. Environmental Protection Agency
DATA QUALITY—SURFACE COATING OF PAPER
C
Estimated
Data
Industry statistics	X
Emissions	X
Cost of emissions control	X
Economic impact	X
Overall quality of data	X
B
A	Extrapolated
Study Outputs	Hard Data	Data
Source: Booz, Allen & Hamilton Inc.
-------
5.2	INDUSTRY STATISTICS
Industry characteristics, statistics and trends for
paper coating in Georgia are presented in this section.
This information forms the basis for assessing the total
impact of implementing RACT for control of VOC emissions
in the state and for the effect upon individual firms.
5.2.1	Size of the Industry
The 1977 Georgia Directory of Manufacturers and
Lockwoods' Directory report a total of about 106 firms in
16 SIC categories in Georgia where paper coating, as
defined in proposed RACT guidelines, is the main business
of the firm or may be a part of its manufacturing activity.
The number of firms and other relevant statistics in
each SIC grouping are summarized in Exhibit 5-2, on the
following page.
Total value of shipments for these firms is estimated
to be about $1.9 billion, with a total of about 19,000
employees. New capital expenditures are estimated to be
about $216 million annually, based on the most recent
(1976) Annual Survey of Manufactures.
Of the total 106 firms in Georgia in the 16 SIC
categories, there are nine which will be impacted by the
proposed paper coating regulations. Of these nine, only
three, Dymo Industrial Marketing Systems, Colonial Packaging
and Mead Packaging Corporation are expected to suffer a
major economic impact. Seven of the coating firms use
solventless systems (waterbased materials, extrusion or
hot melt techniques) and will suffer only minor economic
impact. Based on the statistics given in Exhibit 5-2,
the total annual value of shipments of the two most
heavily impacted firms is estimated at approximately $25
million. The three firms employ about 300 people.
5.2.2	Comparison of the Industry to the State Economy
A comparison of the value of shipments of plants in
the SIC categories listed above with the state economy
indicates that these plants represent about 3.7 percent
of the total value of manufacturing shipments in Georgia.
The industry employs 2.6 percent of all manufacturing
employees in the state.
5-6
-------
EXHIBIT 5-2
U.S. Environmental Protection Agency
1976 INDUSTRY STATISTICS—SURFACE
COATING OF PAPER SIC GROUPS IN GEORGIA
2611
2621
2631
2641
2643
2645
2649
2651
3291
3292
3293
3497
3679
3642
3861
3955
Total
Description
Pulp mills
Paper nulls, except building
paper mills
Paperboard railIs
Paper coating and glazing
Bags, except textile bags
Diecut paper and paperborad
and cardboard
Paper converting, n.e.c.
Folding paperboard boxes
Abrasive products
Asbestos products
Gaskets, packing and sealing
devices
Metal foil and leaf**
Electronic components, n.e.c.
Orthopedic, prosthetic and
surgical appliances and supplies
Photographic equipment and
supplies
Carbon paper and inked ribbons
Number
of
Plants
10
10
13
10
7
16
1
3
3
5
13
	3
106
Total
Number of
Employees
2,139
396
8,057
384
2,646
282
2,029
1,000
50
167
33
50
852
51
537
18,873
Total
Payroll
($1,000)
23,000
4,260
133,600
4, 140
31,600
2,600
20,600
13,500
539
923
355
443
7,440
549
7,700
243,500
Estimated Value
of Shipments
($1,000,000)
280.0
36.6
1,101
30.0
189.8
16.9
114.6
55.0
2.90
9.94
1.22
2.10
36.1
4.20
Estimated
New Expenditures3
($1,000)
51,100
3, 240
148,600
899
5, 270
527
2 , 250
1,610
90.5
202
42 .9
86.0
1, 230
165
730
216,000
a. Estimated bv usinq ratios of (value of shiDment/total emolovroent) and (capital expenditures/total employment) for each SIC group
a s published in 1976 Annual Survey of Manufactures where value of shipments oi expendjtin e6 are not tabulated for the state
None listed.
Source: Booz, Allen & Hamilton Inc.:
: 1976 County Business Patterns, and 1976 Annual Survey of
and"the 1977'Georgia Directory of Manufactures
i rectory
Manufactures. U S. Depaitment of Cosuueice
-------
5.2.3	Historical and Future Patterns of the Industry
The nationwide value of shipments in the industries
expected to be affected by the proposed paper coating
regulations, in general, exceed the growth rate of the
economy. As summarized in Exhibit 5-3, on the following
page, the value of shipments increased in every category
between 1972 and 1976, with an average annual growth
rate of about 12.1 percent over the period. Compared to
an average inflationary rate of 6 to 8 percent, this is
equivalent to a real growth rate of 4 to 6 percent. In
some individual categories, growth rates were even
greater. Paper production increased by an uncorrected
average annual growth rate of 16.5 percent; metal and
foil by 16 percent; paper coating and glazing by about
12 percent, only slightly less than the average.
It is expected that the growth rate will increase
at these rates for the near future.
5-7
-------
SIC
2611
2621
2631
2601
2643
264 S
2619
2651
3201
3292
3293
3499
3679
3842
3Q61
3955
Sour
EXHIBIT 5-3
U.S. Environmental Protection Agency
HISTORICAL TRENDS IN VALUE OF SHIPMENTS OF
U.S. PLANTS ENGAGED IN PAPER COATING (? millions)
1972
710
6, 385
4, 153
1. 954
1, 686
676
631
1, 487
880
763
665
702
3,060
1, 450
5.624
237
31,271
1973
649
7,514
4.B62
2,284
2, 183
747
833
1 , 644
1,067
623
723
753
3,430
1,620
6,435
268
36,035
1974
1,525
9, 942
6,516
2,645
2,867
923
1 , 079
1,890
1,235
963
835
973
3,210
1,800
7,490
	309
42,400
1975
1, 630
9, 650
6, 055
2	, 626
'2,980
943
1 , 090
1,952
1,	222
900
fMJ
1,065
3	, 450
2,	090
/, 627
285
44,408
1976
2,055
11,768
6, 724
3,074
3, 379
1, 027
1 , 268
2,223
1,433
96fc
1 , 020
1,	267
4,120
2,	240
6 , 044
294
51,744
Survey of Manufactures, U.S.
Department of Commerce.
-------
5.3
TECHNICAL SITUATION IN THE INDUSTRY
This section briefly describes the general process
and materials used in the surface coating of paper and
similar products proposed to be included under the RACT
Surface Coating of Paper regulations. The technology is
fully described in the RACT documents. The products
include a myriad of consumer and industry oriented
items, such as pressure-sensitive tapes, adhesive labels,
book covers, milk cartons, flexible packaging materials
and photographic film. Although many of these products
are also printed in one manner or another, the emissions
from printing inks are not included in the RACT regulations
pertaining to paper coating; only the emissions specifically
issuing from the coating operation are included. An
estimate of these emissions for the state is also presented
in this section.
5.3.1 General Coating Process Description
In organic solvent paper coating, resins are dissolved
in an organic solvent mixture and this solution is
applied to a web (continuous roll) of paper. As the
coated web is dried, the solvent evaporates and the
coating cures.
Most organic solvent-borne coating is done by paper
converting companies that buy paper from the mills and
apply coatings to produce a final product. The paper
mills themselves sometimes apply coatings, but these are
usually waterborne coatings consisting of a pigment
(such as clay) and a binder (such as starch or casein).
However, much additional coating is done by firms only
as part of the manufacturing process.
Solvent emissions from an individual coating facility
will vary with the size and number of coating lines. A
plant may have one or as many as 20 coating lines.
Uncontrolled emissions from a single line may vary from
50 pounds per hour to 1,000 pounds per hour, depending
on the line size. The amount of solvent emitted also
depends on the number of hours the line operates each
day.
Exhibit 5-4 gives typical emission data from various
paper coating applications.
5-8
-------
EXHIBIT 5-4
U.S. Environmental Protection Agency
EMISSION DAT/v FROM TYPICAL PAPER COATING PLANTS
Number
of coating
L:
10
Solvent
Usage
(I'd./day)
10,000
15,000
9, 000
1, 200
24,000
2 0
'55, 000
5, 000
21,000
10,500
Solvent
EmJssions
(lb.day )
10,000
15,000
9, 000
1, 200
950
Control
Efficiency (%)a
96
41,000
90
1 , 500
840
90
96
500
96
a. Neolectmg emissions that are not captured in the hooding system.
Source: Conti.o] of Volatile Orqanics from Stationary Sources, EPA-450/2-76-028.
ControL
UeviC:
None
None
None
None
Carbon
adsoLptioii
Carbon
<'id::orpti on
( not ci L L 1 l neb
con tru L Led)
Carbon
adsorption
Carbon
ad1 .o i"p t ion
A fLerbu Lnei
-------
5.3.2 Nature of Coating Materials Used
The formulations usually used in organic solvent-borne
paper coatings may be divided into the following classes:
film-forming materials, plasticizers, pigments and
solvents. Dozens of organic solvents are used. The
major ones are: toluene, xylene, methyl ethyl ketone,
isopropyl alcohol, methanol, acetone and ethanol.
Although a single solvent is frequently used, often
a solvent mixture is necessary to obtain the optimum
drying rate. Too rapid drying results in bubbles and an
"orange peel" effect in the coating; whereas, slow
drying coatings require more time in the ovens or slower
production rates. Variations in the solvent mixture
also affect the solvent qualities of the mix.
The main classes of film formers used in conventional
paper coating are cellulose derivatives and vinyl resins.
The most commonly used cellulose derivative, nitrocellulose
has been used for paper coating decorative paper, book
covers and similar items since the 1920s. It is relatively
easy to formulate and handle, and it dries quickly, allowing
lower oven temperatures than vinyl coatings. The most
common vinyl resin is the copolymer of vinyl chloride and
vinyl acetate. These vinyl copolymers are superior to
nitrocellulose in toughness, flexibility and abrasion re-
sistance. They also show good resistance to acids, alkyds,
alcohols and greases. Vinyl coatings tend to retain solvent,
however, so that comparatively high temperatures are needed.
In general, nitrocellulose is most applicable to the dec-
orative paper field, whereas vinyl copolymers are used for
functional papers, such as some packaging materials.
In the production of pressure-sensitive tapes and
labels, adhesives and silicone release agents are applied
using an organic solvent carrier. The adhesive layer is
usually natural or synthetic rubber, acrylic or silicone.
Because of their low cost, natural and synthetic rubber
compounds are the main film formers used for adhesives in
pressure-sensitive tapes and labels, although acrylic and
silicone adhesives offer performance advantages for certain
applications. In most cases tapes and labels also involve
the use of release agents applied to a label carrier or the
backside of tape to allow release. The agents are usually
silicone compounds applied in a dilute solvent solution.
5-9
-------
5.3.3
Current VOC Emissions
Current emissions from paper coating in Georgia are
approximately 1370 tons per year. These emissions are
from paper coaters not meeting the proposed regulations.
Total emissions are somewhat higher. These data were
gathered through an exhaustive telephone survey of companies
expected to be affected by the regulations.
A summary of potentially impacted firms and their
emissions is presented in Exhibit 5-5.
5.3.4 RACT Guidelines
The RACT guidelines for control of VOC emissions from
the surface coating of paper require that emission dis-
charges of VOCs be limited to 2.9 pounds per gallon of
coating material delivered to the coating applicator.
The recommended methods of achieving this requirement
are:
The application of low solvent content coatings;
or
Incineration, provided that 90 percent of the
nonmethane VOCs (measured as combustible carbon)
which enter the incinerator are oxidized to carbon
dioxide and water; or
A system demonstrated to have control efficiency
equivalent to or greater than provided by either
of the above methods.
In the following section are discussed several
methods of low solvent and solventless systems, which
have been demonstrated to be applicable to some paper
coating products, and the two principal add-on systems,
incineration and carbon adsorption, generally used for
emission control. This information has been extracted
principally from the previously cited EPA report,
Control of Volatile Organic Emissions from Existing Sources,
Volume II, which should be consulted for a more thorough
discussion. In some instances, additional comment was
obtained from coaters, coating material suppliers and
control equipment manufacturers.
5-10
-------
Exhibit 5-5
U.S. Environmental Protection Agency
COMPANY ESTIMATES OF PAPER COATING EMISSIONS
AS REPORTED TO BOOZ, ALLEN AND HAMILTON
Company Name, Location
SIC
Code
Employees
Total Reported
Emissions
(tons/year)
Emissions Applicable
Under Paper Coating Category
(tons/year)
American Can Company
St. Marys
2641
0
American Tara Corp.
Chamblee
3955
47
Colonial Packaging
Chamblee
2641
2631
32
10
10
Dymo Industrial Marketing
Systems, Atlanta
2641
88
51
51
Fasson, Division of
Avery Intl., Peachtree
City
2641
85
Frye Copy Systems
Decatur
3955
46
Mead Packaging
Atlanta
2641
175
1,300
1,300
National Emperial Label
Systems, Stone Mountain
2641
55
Paper Products Inc.
Augusta
Technicarbon
Conyers
a.	Not reported
b.	Uses waterbased materials
c.	Uses an extrusion process
d.	Uses a hot melt process
2641
2649
3955
26
24
578
-50
0d
1,411
0
1,361
Source: Booz, Allen & Hamilton Inc.
-------
5.3.5	Low Solvent and Solventless Coatings
In Exhibit 5-6, on the following page, are listed
several types of coating materials, which have found
utility in paper coating, and an estimate of expected
solvent reduction.
5.3.5.1	Waterborne Coatings
Waterborne coatings have long been used in coating
paper to improve printability and gloss. However, newer
coatings have been developed in which a synthetic insoluble
polymer is carried in water as a colloidal dispersion or
an emulsion. This is a two-phase system in which water
is the continuous phase and the polymer resin is the
dispersed phase. When the water is evaporated and the
coating cured, the polymer forms a film that has proper-
ties similar to those obtained from organic-solvent-based
coatings.
5.3.5.2	Plastisols and Organisols
Plastisols are a colloidal dispersion of synthetic
resin in a plasticizer. When the plasticizer is heated,
the resin particles are solvated by the plasticizer so
that they fuse together to form a continuous film.
Plastisols usually contain little or no solvent, but
sometimes the addition of a filler or pigment will
change the viscosity so that organic solvents must be
added to obtain desirable flow characteristics. When the
volatile content of a plastisol exceeds 5 percent of the
total weight, it is referred to as an organisol.
Although organic solvents are not evaporated from
plastisols, some of .the plasticizer may volatilize in
the oven. This plasticizer will condense when emitted
from the exhaust stack to form a visible emission.
5.3.5.3	Hot Melt Coatings
Hot melt coatings contain no solvent; the polymer
resins are applied in a molten state to the paper surfaces.
All the materials deposited on the paper remain as part
of the coating. Because the hot melt cools to a solid
coating soon after it is applied, a drying oven is not
needed to evaporate solvent or to cure the coating.
Energy that would have been used to heat an oven and to
heat makeup air to replace oven exhaust is therefore
saved.
5-11
-------
Type of Low Solvent-Coating
Waterborne coatings
Plastisols
Hot melts
Extrusion coatings
Pressure-sensitive adhesives
Waterborne
Hot melts
Prepolymer
Silicone release agents
100 percent nonvolatile coatings
Waterborne emulsions
a. Based on comparison with a conventional coating
and 65 percent organic solvent by volume.
EXHIBIT 5-6
U.S. Environmental Protection Agency
ACHIEVABLE SOLVENT REDUCTIONS USING LOW
SOLVENT COATINGS IN PAPER COATING INDUSTRY
Reduction Achievable (%)a
80-99
95-99
99+
99+
80-99
99
99
99+
80-99
containing 35 percent solids by volume
Source: EPA 450/2-76-028, op. cit.
-------
One disadvantage with hot melt coatings is that
materials that char or burn when heated cannot be applied
by hot melt. .Other materials will slowly degrade when
they are held at the necessary elevated temperatures.
5.3.5.4	Extrusion Coatings
A type of hot melt coating, plastic extrusion
coating is a solventless system in which a molten thermo-
plastic sheet is discharged from a slotted dye onto a
substrate of paper, paperboard or synthetic material.
The moving substrate and molten plastic are combined in
a nip between a rubber roll and a chill roll. A screw-
type extruder extrudes the coating at a temperature
sometimes as high as 600°F. Low and medium density
polyethylene are used for extrusion coating more than
any other types of resins.
5.3.5.5	Pressure-Sensitive Adhesive Coatings
Waterborne adhesives have the advantage that they
can be applied with conventional coating equipment.
Waterborne emulsions, which can be applied less expensively
than can solvent-borne rubber-based adhesives, are
already in use for pressure-sensitive labels. A problem
with waterborne adhesives is that they tend to cause the
paper substrate to curl and wrinkle.
Prepolymer adhesive coatings are applied as a
liquid composed of monomers containing no solvent. The
monomers are polymerized by either heat or radiation.
These prepolymer systems show promise, but they are
presently in a developmental stage only.
5.3.5.6	Silicone Release Coatings
Silicone release coatings, usually solvent-borne,
are sometimes used for pressure-sensitive, adhesive-coated
products. Two low-solvent alternatives are currently on
the market. The first is a 100 percent nonvolatile
coating which is usually heatcured, but may be radiation
cured. The second system is water emulsion coatings
which is lower in cost than the prepolymer coating.
However, because of wrinkling and other application
problems the waterborne coating may be of limited value.
Some silicone coating materials which are under
development use single solvent systems that can be
readily recovered by carbon adsorption. Current coatings
are troublesome since some silicone is carried into the
adsorber where it clogs the carbon pores to reduce
adsorption efficiency.
5-12
-------
5.3.6	Incineration
Catalytic and direct thermal incineration processes
convert hydrocarbons to carbon dioxide and water at high
temperatures. Incineration is widely accepted as a
reliable means of reducing hydrocarbon emissions by 90
percent or more.
Generally, the major disadvantage of this approach
is the increased energy required to raise the exhaust
gas temperatures above 1,200°F for direct incineration
and 700°F for catalytic incineration. Another problem
is the generation of nitrogen oxides in direct fired .
incinerators because of the exposure of air to high-
temperature flames.
The increased energy consumption can, in some
cases, be reduced or eliminated by heat exchange of the
exhaust gases with fresh emissions (primary heat recovery)
or by use of the hot incinerator exhaust gases in process
applications (secondary heat recovery). Typical use of
secondary heat recovery is for oven heat in drying or
baking ovens. In fact, with efficient primary exchange
and secondary heat recovery, total fuel consumption of
an incinerator-oven system can be less than that for the
oven before the incinerator is added. The heat required
to sustain the system comes from the combustion of the
volatile organic compounds in the exhausts.
Paper coaters who use coating machinery for a
multiplicity of processes have commented that catalytic
incineration would probably not be used because of the
possibility of catalyst poisoning. Direct incineration
would be used.
5.3.7 Carbon Adsorption
Carbon adsorption has been used since the 1930s for
collecting solvents emitted from paper coating operations.
Most operational systems on paper coating lines were in-
stalled because they were profitable. Pollution control
has usually been a minor concern.
Carbon adsorption is most adaptable to single
solvent processes. Many coaters using carbon adsorption
have reformulated their coatings so that only one solvent
is required. Toluene, a widely used solvent for paper
coating, is readily captured in carbon adsorption systems.
5-13
-------
The greatest obstacle to the economical use of
carbon adsorption is that, in some cases, reusing recovered
solvents may be difficult. In many.coating formulations,
a mixture of several solvents is needed to attain the
desired solvency and evaporation rates. Also if different
coating lines within the plant use different solvents
and are all ducted to one carbon adsorption system, then
there may be difficulty reusing the collected solvent
mixture. In some cases, such as in the preparation of
photographic films or thermographic recording paper,
extremely high purity solvents are necessary to maintain
product performance and even distillation may be insuffi-
cient to produce the quality of recovered solvent needed.
For most other coating formulations, distillation is
adequate.
Another problem with carbon adsorption is the
potential of generating explosive conditions in the
adsorber because of the localized increases in combustible
organic material concentrations. Ignition apparently
can be caused by static electricity in systems where dry
air at high flow rates is treated. Several explosions
of absorbers have been reported in paper coating and
other plants.
Also, adsorption of solvents containing water
soluble compounds (such as alcohols, ketones or esters)
can present a secondary pollution problem where steam is
used for regeneration. Additional treatment of the
condensed steam with its content of dissolved organics
would be required, increasing the complexity of the
solvent recovery system and its cost.
5-14
-------
5.4	COST AND VOC REDUCTION BENEFIT EVALUATIONS
FOR THE MOST LIKELY RACT ALTERNATIVES
This section discusses the projected costs of
control for paper coating in the state.
Where possible, several coaters in Georgia have
already switched to water-based or solventless systems.
Three are using water-based coatings, two are using hot
melt systems, and one is using an extruded coating. Of
the firms using the current high solvent coatings, Mead
Packaging will probably use incineration with primary
heat recovery and Dymo and Colonial will consider using
carbon adsorption to comply with the proposed regulations.
Mead Packaging provided the costs associated with
installation and operation of the incineration system.
The cost of the carbon adsorption system is derived from
information presented in the following section.
5.4.1 Costs of Alternative Control Systems
Exhibit 5-7, on the following page, presents costs
for a typical carbon adsorption system as developed by EPA
sources. The system is based on the assumption that exhaust
air flow rates can be reduced sufficiently to attain LEL
levels of 25 percent. This is possible with well-designed
ovens where excess air can be reduced or where product
characteristics allow.
Several paper coaters indicate that this may not be
possible with older coating lines or with certain types
of coating. Coating drying rate is a function of air
flow rate, temperature and vapor concentration in the
air. If air flow rates are to be reduced, drying tempera-
tures or drying times must be increased. Because of the
heat sensitivity of some coating, temperature increases
may not be possible. Increase in drying time will
necessitate either more time in the ovens or reduced
production rates. Several coaters of heat sensitive
products indicated that in order to achieve special
characteristics they could not increase emission concen-
trations above 5 to 6 percent of LEL and could not use
oven temperatures above 140°F. Plants manufacturing
conventional coated products, however, can decrease air
flow rates sufficiently to increase VOC concentrations
in the exhausts to 40-50 percent with only moderate
increases in temperatures or changes in production
rates. We have assumed for cost estimation purposes
that a 25 percent LEL can be attained on the average.
5-15
-------
EXHIBIT 5-7
U.S. Environmental Protection Agency
CARBON ADSORPTION COSTS FOR PAPER COATING INDUSTRY
Installed Cost
($>
Annualized Cost
($/yr.)
Control Cost
($ ton of solvent
recovered)
No credit for recovered
solvent
320,000
127,000
125
Recovered solvent credited	320,000	60,000	40
at fuel value
Solvent credited at market	320,000	(100,000)a	(50)'
Note: Operating parameters are: process rate of 15,000 scfm, temperature of 170°F,
operation at 25 percent of LEL. See Volume I, Chapter 4, for details on cost
estimates. Costs are believed to be valid only for mid-1974.
a. Costs in parenthesis indicate a net gain.
Source: EPA-450/2-76-028
-------
Both incinerator costs and adsorber costs are a
function of equipment size and vary generally with air
flow rate. It was assumed for projection of overall
costs in the state that control equipment, on the average,
would be sized for 15,000 scfm per unit. In most plants,
it is impractical, to manifold exhausts so that all
exhausts could be treated in one add-on emission control
system, in the case of incinerators, it would be difficult
to use secondary heat recovery on ovens where the incinera-
tor is remote from the oven.
The major problem in estimating total installed
costs of control systems is the added cost of installation.
This problem is inherent in any generalized rather than
specific cost estimating procedure. The EPA estimates
were made on the assumption of an easily retrofitted
system. In practice some coaters have found actual installed
costs to be three to five times those summarized in Exhibit
5-7. However, in the state of Georgia, these figures were
used for only one facility; and provide a generalized rather
than a specific cost estimate.
5.4.2 Estimated Statewide Costs
The total emissions considered to be applicable
under RACT, as discussed in Section 5.3.4 of this report,
are approximately 1370 tons per year. Based on this
emission rate and EPA costs, as summarized in Exhibit 5-6,
capital costs are estimated as $6.0 million to $1.4 million
per year. All bases and assumptions used in this estimate
are summarized in Exhibit 5-8, on the following page. The
costs presented in Exhibit 5-7 were increased by 25 percent
to account for inflationary increases from mid-1974 to mid-
1977.
Because most plants will have difficulty in retro-
fitting add-on control systems, based on the information in
EPA 450/276028, capital costs are considered to be low and
were increased by a factor of three to four.
5.4.3. Estimated Emission Reduction
Assuming that 90 percent of all solvents used in
coating operations can be collected by properly designed
hoods and ovens, emissions could be reduced by approxi-
mately 1,000 tons per year. This is based on a 90 percent
capture of emissions by a carbon adsorber or destruction
in an incinerator, an overall reduction in emissions of 81
percent.
5-16
-------
EXHIBIT 5-8
U.S. Environmental Protection Agency
SUMMARY OF ASSUMPTIONS USED IN
ESTIMATING COST OF CARBON ADSORPTION SYSTEM
Assumptions
Carbon adsorption with recovered solvent credited at fuel prices
25 percent LEL is equal to 3,000 ppm of toluene by volume
Air flow can be reduced to reach 25 percent LEL
The price of a 15,000 SCFM system can be used as an average. No costs are
added for distillation or additional waste disposal.
33,500 tons of emissions are treated per year over an operating period of
5,840 hours per year.
Other assumptions regarding incinerator and adsorber prices, as estimated in
Control of Volatile Organic Emissions from Existing Stationary Sources,
Vol. I: Control Methods for Surface-Coating Operations, EPA-450/2-76-028,
are valid.
Source: Booz, Allen & Hamilton Inc.
-------
5.5
DIRECT ECONOMIC IMPACTS
This section presents the direct economic implica-
tions of implementing the RACT guidelines for surface
coating of paper on a statewide basis. The analysis
includes the availability of equipment and capital;
feasibility of the control technology; and impact on
economic indicators, such as value of shipments, unit
price (assuming full cost pass-through), state economic
variables and capital investment.
5.5.1 RACT Timing
Current proposed guidelines for paper coating
suggest several compliance deadlines for alternative
methods of compliance.1 Generally, for add-on systems
they call for installation of equipment and demonstration
by mid-1980 or late 1980; for low solvent systems, by
late 1980 or mid-1981, depending upon the degree of
research and development needed. Major coaters, material
suppliers and equipment manufacturers believe these
deadlines to be unattainable.
Normally, large incinerator and carbon adsorp-
tion systems will require about a year or more
from receipt of purchase to install and start
up the system. Engineering may require three
months or more, fabrication three to six
months and installation and startup as long as
three months.
Only a small number of companies manufacture
incineration systems with proven high heat
recovery. The cumulative effect of equipment
requirements by all firms in the U.S. needing
control devices could severely impede the
ability of these firms to supply equipment.
In some cases, the most efficient devices are
only now undergoing initial trials, and no
production capacity has been developed.
-^-Regulatory Guidance for Control of Volatile Organic Compound
Emissions from 15 Categories of Stationary Sources, EPA-905/2-
78-001
5-17
-------
In general, it appears that if add-on control
systems are used deadlines must be extended.
5.5.2	Technical Feasibility Issues
Though low solvent or solventless materials are
used in many paper coating operations at present, many
types of solvent-based systems have no satisfactory
replacement. The alternative materials do not meet the
product quality standards demanded by the coaters.
Additional development is needed and will require the
combined efforts of both the coaters (who must maintain
product quality) and the coating material suppliers.
Ideally, the new coating materials should be adaptable
to existing coating equipment to minimize additional
capital investment.
As discussed above, both incineration and carbon
adsorption are not completely satisfactory add-on control
systems. Incineration requires large volumes of additional
fuel if good heat recovery is not.accomplished; carbon
adsorption is not usable on many coating systems because
of the multiplicity of compounds used in solvent mixtures.
5.5.3	Comparison of Direct Cost with Selected Direct
Economic Indicators
The net increase in annual operating costs to
coaters was estimated at $385,000 to $505,000. Based
on similar economic impact studies, these additional
costs are projected to represent 1.5 percent to 2.0
percent of the total annual value of shipments of the
firms affected by the proposed regulations. Assuming a
"direct pass-through" of these costs, prices will increase
by about the same fraction.
The major economic impact in terms of cost to most
individual companies will be the large capital expendi-
tures required for add-on devices, rather than increased
annual operating costs. For most companies, these costs
would exceed their current level of capital expenditures
for plant improvement and expansion. A large pressure-
sensitive paper coater in another state, for instance,
has estimated that a capital investment of about $2
million would be needed to meet proposed guidelines.
His current capital expenditure program is normally in
the range of $1.5 million.
5-18
-------
5.5.4	Selected Secondary Economic Impacts
This section discusses the secondary impact of
implementing RACT on employment, market structure and
productivity.
Employment is not expected to be affected. Employment
would be reduced if marginally profitable facilities
closed, but the present indication from the industry is
that plant closures will not occur.
No significant effect on overall productivity is
foreseen except for a small change resulting from the
need for add-on control system operating and maintenance
personnel.
~ * *
Exhibit 5-9, on the following page, summarizes the
conclusions reached in this study and the implications of
the estimated costs of compliance for paper coaters.
5-19
-------
EXHIBIT 5-9
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR PAPER COATERS
IN THE STATE OF GEORGIA
Current Situation
Number of potentially affected
facilities
Indication of relative importance
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of control to meet
RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Discussion
Three plants in Georgia are expected to
suffer major impact under these regula-
tions. However, if this category is
interpreted to include all types of paper
coating, including publishing, far more
firms would be affected
The 1977 value of shipments of these is
estimated to be $25 million. These
plants are estimated to employ 300
employees
Gravure coating replacing older systems
Approximately 1,411 tons per year were
identified from the emission inventory
Use of solventless systems is increas-
ing and several plants in Georgia have
converted to them
Thermal incineration with primary heat
recovery and carbon adsorption
Discussion
Estimated to be 3.4 million to 4.1 mil-
lion depending on retrofit situations.
This is likely to be more than 100
percent of normal expenditures for the
affected paper coaters
$385,000 to $505,000 annually. This
may represent 1.5 to 2.0 percent of
the 1977 annual sales for the affected
paper coaters
Assuming a "direct cost pass-through"—
1.5 to 2.0 percent
Assuming 70 percent heat recovery annua]
energy requirements are expected to in-
crease by approximately 7,000 equivalent
barrels of oil annually
No major impact
-------
EXHIBIT 5-9 (2)
U.S. Environmental Protection Agency
Affected Areas in Meeting RACT
Employment
Market structure
RACT timing requirements (1982)
Problem areas
VOC emissions after control
Cost effectiveness of control
Discussion
No major impact
No major impact
RACT guideline needs clear definition
for rule making
Nationwide equipment deliverables and
installation of incineration systems
prior to 1982 are expected to present
problems
Retrofit situations and installation
costs are highly variable
Type and cost of control depend on
particular solvent systems used and
reduction in air flow
270 tons/year (20 percent of 1977 VOC
emission level)
$350-$460 annualized cost/annual ton
of VOC reduction
Source: Booz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
T.W., Hughes, et. al., Source Assessment: Prioritization
of Air Pollution from Industrial Surface Coating Operations,
Monsanto Research Corporation, Dayton, Ohio. Prepared for
U.S. Environmental Protection Agency, Research Triangle Park,
N.C., under Contract No. 68-02-1320 (Tech. 14) Publication
No. 650/2-75-019a.
T. A. Kittleman and A. B. Akell, "The Cost of Controlling
Organic Emissions," Chemical Engineering Progress, April 1978.
Springborn Laboratories, Air Pollution Control Engineering
and Cost Study of General Surface Coating Industry, Second
Interim Report. EPA Contract No. 68-0202075, August 23, 1977.
Davidson's Textile Blue Book, 1977.
Lockwood's Directory of the Paper Industry, 1977.
Thomas Register of American Manufacturers, 1978.
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Existing Stationary Sources, Volume I.
EPA-450/2-76-028, May 1977.
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Existing Stationary Sources, Volume II.
EPA-450/2-77-028, May 1977.
U.S. Environmental Protection Agency, Regulatory Guidance for
Control of Volatile Organic Compounds Emissions from 15
Categories of Stationary Sources, EPA-950/2-78-001, April
1978.
U.S. Department of Commerce, Annual Survey of Manufactures,
1976.
U.S. Department of Commerce, County Business Patterns, 1976.
U.S. Department of Commerce, Census of Manufactures, 1972.
Private conversations with:
American Can Company, St. Mary's, Georgia
American Tara Company, Chamblee, Georgia
Colonial Packaging Company, Chamblee, Georgia
Dymo Industrial Marketing Systems, Atlanta, Georgia
Fasson Industries, Peachtree City, Georgia
Frye Copy Systems, Decatur, Georgia
-------
Mead Packaging, Atlanta, Georgia
Paper Products Inc., Augusta, Georgia
Technicarbon, Conyers, Georgia
-------
THE ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR PLANTS SURFACE COATING
FABRICS IN THE STATE OF GEORGIA
-------
6.0 THE ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR PLANTS SURFACE COATING
FABRICS IN THE STATE OF GEORGIA
The purpose of this chapter is to present an analysis
of the impact of implementing RACT for plants in the State
of Georgia which are engaged in the surface coating of
fabrics and vinyls. However, a survey of the fabric and
vinyl coating industry in Georgia by Booz, Allen did not
identify any facilities that are likely to be affected by
the proposed RACT guidelines in Georgia. Thus, the proposed
RACT guidelines for fabric and vinyl coating would not have
an economic impact on the industry in Georgia. This chapter,
therefore, presents the methodology used in identifying
potentially affected firms by the RACT guidelines in Georgia
and the results of its application. The chapter is organ-
ized into two sections.
Scope of Proposed Regulations
Facilities Potentially Affected by the Proposed
Regulations.
6-1
-------
6.1 SCOPE OF THE PROPOSED REGULATIONS
The proposed Georgia regulations for controlling VOC
emissions from existing fabric coating plants apply to the
roll, knife or rotogravure coating and oven drying of tex-
tile fabrics (to impart strength, stability, appearance,
or other properties), or of vinyl coated fabrics or vinyl
sheets. It applies to printing on vinyl coated fabrics or
vinyl sheets to modify appearance but not to printing on
textile fabrics for decorative or other purposes. It also
does not apply to the coating of fabric substrates with
vinyl plastic polymers which are usually applied to melts
or plastisols that result in only minor amounts of emissions.
The proposed regulations apply statewide to plants
emitting over 100 tons/year of VOC. However, for the 12
non-attainment counties in the state, plants emitting
over five pounds per hour or 50 pounds per day are also
subject to the regulations.
6-2
-------
6.2 FACILITIES POTENTIALLY AFFECTED BY THE PROPOSED
REGULATIONS
The coating of fabrics is used to produce a large
variety of common consumer and industrial products. Typical
products are raincoats, upholstery, wall covering, tablecloths,
window shades, gasketing, diaphragms, lifeboats and bookcovers,
In most cases the finished product is manufacturerd by firms
who purchase the coated fabric from a manufacturer whose
principal activity is fabric coating. However, there are a
number of vertically integrated firms (the major automobile
manufacturers are typical) which both coat fabrics and
manufacture finished goods for them. Other exceptions are
firms which both manufacture fabrics and coat them. Thus
firms which coat fabrics or vinyl coated fabrics or sheeting
can be found in a number of Standard Industrial Classifica-
tion categories; these are listed below:
SIC
Description
2211
Broad woven fabric mills, cotton
2221
Broad woven fabric mills, man-made and

silk
2241
Narrow fabrics and other, small wares

mills
2258
Warp knit fabric mills
2261
Finishers of broad woven fabrics of

cotton
2262
Finishers of broad woven fabrics of

man-made fiber and silk
2269
Finishers of textiles, n.e.c.*
2295
Coated fabrics, not rubberized
2297
Nonwoven fabrics
3069
Fabricated rubber products, n.e.c.*
3079
Miscellaneous plastics products
3291
Abrasive products
3293
Caskets, packing, sealing devices
A list of 41 establishments expected to be affected by
the proposed fabric coating RACT regulations in the state
was compiled from the review of the following industry direc-
tories :
Davidson's Textile Blue Book
Rubber Red Book
Modern Plastic Encyclopedia
Thomas Register of American Manufacturers
Georgia Directory of Manufacturers
Membership list of the Canvas Products Association.
* Not elsewhere classified
6-3
-------
The state officials andcthe Booz, Allen study team interviewed
the firms by telephone to determine whether those firms were
involved in surface coating of fabric or not and what their
emissions or solvent usage were.
As a result of this telephone survey, 33 firms were
eliminated from the original list of potentially affected
firms because they either do not coat fabrics or are no
longer in business.
Of the remaining 8 firms, 5 are involved in coating
carpet backs with latex, which does not contain organic
solvents.
The remaining 3 firms included Goodyear Tire Company
of Rockmart, Pandel Chemicals of Cartersville and Champion
Package Company of Columbus. Goodyear coats tire fabric
with latex which does not contain organic solvent, but some
of the polymers contained in the tire fabric vaporize during
drying. However, the principal concern in this case is the
control of particulates emissions, with no appreciable VOC
emissions. Of the remaining 2 fabric coaters, Pandel Chem-
ical Company uses spray coating method for coating urethane
on carpet backs, whereas Champion Package Company uses an
extrusion coating method for coating paper with polyethylene.
Since spray and extrusion coating methods are not subject to
the RACT guidelines, these firms are not affected by the
regulations.
In summary, none of the fabric coating facilities in
Georgia would be affected by the proposed Georgia regulation
for VOC control. Thus, there would be no economic impact of
implementing the proposed regulations for fabric coating in
Georgia.
6-4
-------
BIBLIOGRAPHY
Davidson's Textile Blue Book, 1977.
T.W. Hughes, et al., Source Assessment: Prioritization of
Air Pollution from Industrial Surface Coating Operations,
Monsanto Research Corporation, Dayton, Ohio. Prepared for
U.S. Environmental Protection Agency, Research Triangle Park,
N.C., under Contract No. 68-02-1320 (Tech. 14) Publication
No. 650/2-75-019a.
T.A. Kittleman and A.B. Akell, "The Cost of Controlling
Organic Emissions," Chemical Engineering Progress, April 1978.
Springborn Laboratories, Air Pollution Control Engineering
and Cost Study of General Surface Coating Industry, Second
Interim Report, EPA Contract No. 68-02-2075, August 23, 1977.
Textile Economics Bureau, Technicon, November 1977, State
Industrial Directories Corporation, South Carolina State
Development Board, Planning and Research Division, Industrial
Directory of South Carolina, 1978.
Thomas Register of American Manufacturers, 1978.
U.S. Department of Commerce, County Business Patterns.
U.S. Department of Commerce, Annual Survey of Manufactures,
1976, Industry Profiles, M76 (AS)-7.
U.S. Department of Commerce, Annual Survey of Manufactures,
1976, Value of Product Shipments, M76 (AS)-2.
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Existing Stationary Sources, Volume I,
EPA-450/2-77-009, May 1977.
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Existing Stationary Sources, Volume II,
EPA-450/2-77-008, May 1977.
U.S. Environmental Protection Agency, Regulatory Guidance for
Control of Volatile Organic Compounds Emissions from 15
Categories of Stationary Sources, EPA-950/2-78-001, April 1978.
Interviews with:
Goodyear Tire Company, Rockmount, Georgia
Pandel Chemicals Cartersville, Georgia
Champion Package Company, Columbus, Georgia
-------
ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING OF AUTOMOBILES
IN THE STATE OF GEORGIA
-------
7.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
THE SURFACE COATING OF AUTOMOBILES
IN THE STATE OF GEORGIA
This chapter presents a detailed analysis of the impact
of implementing RACT for surface coating of automobiles in the
State of Georgia.
The capital cost and energy requirements to achieve the
recommended RACT limitations were anticipated to be higher
than for any other industrial category studied. In addition,
the EPA is currently considering modifying the limitations in
certain areas. Therefore, the economic impact and analysis
for surface coating of automobiles is presented in two scenarios
of RACT implementation:
RACT compliance by 19 8 2
Modified RACT timing requirements and possibly
limitations to meet developing technologies.
To the extent that light duty trucks are also manufactured in
the same automobile assembly plant, their impact is included.
The chapter is divided into six sections including:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Emissions and current controls
Cost and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic impacts.
Each section presents detailed data and findings based
on analyses of the RACT guidelines, previous studies of the
application of surface coatings on automobiles, interviews,
industry public hearing submissions and analysis.
7-1
-------
7.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining
estimates of:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Cost of controlling VOC emissions
Economic impact
for the surface coating of automobiles in Georgia.
An overall assessment of the quality of the estimates
is detailed in the latter part of this section.
7.1.1	Industry Statistics
The potentially affected facilities were identified from
the emission inventory and from Ward's Automotive Yearbook.
Because there were only two major companies in the state, these
companies were both interviewed.
Detailed industry statistical data for value of shipments,
capital expenditures, employment, etc., were not available for
the state in secondary sources (only two companies manufacturing).
Therefore, these estimates were factored from national data
based on the number of units output in the state and study team
analysis.
The number of units manufactured in 1976 was obtained
from Ward's Automotive Yearbook.
7.1.2	VOC Emissions
Booz, Allen estimated the 1977 VOC emissions based on
information provided by the Georgia Department of Natural
Resources.
7.1.3	Processes for Controlling VOC Emissions
Processes for controlling VOC emmission for the surface
coating of large appliances are described in Control of Volatile
Organic Emissions from Existing Stationary Sources—Volume II
(EPA-450/2-77-008, May 1977). Both manufacturers were inter-
viewed to ascertain the most feasible types of control for
organic emissions in the coating of automobiles.
7-2
-------
7.1.4
Cost of Control of VOC Emissions
The costs of control of volatile organic emissions were
developed by:
Determining the alternative types of control
systems likely to be used
Estimating the probable use of each type of
control system
Defining system components
Developing installed capital costs for modifi-
cations of existing systems based on industry
estimates, EPA estimates and Booz, Allen study
team judgment
Developing costs of a control system for the
likely control alternatives:
Installed capital costs
Direct operating costs
Annual capital charges
Energy requirements.
Aggregating costs to the total industry for the
state.
These costs were presented for two scenarios of RACT
implementation:
RACT compliance by 1982
Modified RACT timing requirements and possibly
limitations to meet developing technologies.
Under the first scenario (RACT compliance by 1982), a
waterborne system similiar to the systems used in developing
RACT guidelines was studied.
Under the second scenario, a high solids enamel topcoat
system (or other equivalent technology) that is not fully
developed (commercially for automobile coatings) was studied.
7-3
-------
7.1.5
Economic Impacts
The economic impacts were determined by analyzing the
lead time requirements to implement RACT, assessing the
feasibility of instituting RACT controls in terms of capital
availability and equipment availability, comparing the direct
costs of RACT control to various state economic indicators and
assessing the secondary effects on market structure, employment
and productivity as a result of implementing RACT controls in
Wisconsin.
7.1.6 Quality of Estimates
Several sources of information were utilized in assessing
the emissions, cost and economic impact of implementing RACT
controls on the surface coating of automobiles in Georgia.
A rating scheme is presented in this section to indicate the
quality of the data available for use in this study. A rating
of "A" indicates hard data, (data that are published for the
base year), "B" indicates data that were extrapolated from hard
data and "C" indicates data that were not available in secondary
literature and were estimated based on interviews, analysis of
previous studies and best engineering judgment. Exhibit 7-1,
on the following page, rates each study output listed and the
overall quality of the data.
7-4
-------
EXHIBIT 7-1
U.S. Environmental Protection Agency
SURFACE COATING OF AUTOMOBILES
DATA QUALITY
Study Outputs
Hard Data
B
Extrapolated
Data
Estimated
Data
Industry statistics
X
Emissions
X
Cost of emissions control
X
Economic impact
Overall quality of data
X
Source: Booz, Allen & Hamilton Inc.
-------
7.2 INDUSTRY STATISTICS
Industry characteristics, statistics and business trends
for automobile assembly plants in Georgia are presented in this
section. Data in this section form the basis for assessing
the impact of implementing RACT for control of VOC emissions
from automobile manufacturing plants in the state.
7.2.1 Size of the Industry
There are three major automobile manufacturing facilities
that would be affected by the RACT guidelines in Georgia.
General Motors has two assembly plants in Lakewood and Doraville
and Ford Motor Company has an assembly plant in Atlanta.
Exhibit 7-2, on the following page, presents the potentially
affected facilities and the approximate number of automobiles
and light duty trucks manufactured in the state.
In 1977, there were approximately 538,000 automobiles
manufactured in Georgia, approximately 6.6 percent of the
automobiles manufactured in the U.S. There are five states that
currently manufacture more automobiles than Georgia but
only three (Michigan, Missouri and Ohio) with appreciably
more automobile production. The table below presents the
percent of U.S. car production by state for the 1976 model year.
Additionally, approximately 95,000 light duty trucks
were manufactured at the General Motors plant in Lakewood.
The 1977 value of shipments of automobile and light duty trucks
in Georgia is estimated to be $3.5 billion. These manufacturing
facilities employ approximately 13,500 persons. The capital
expenditures for the three plants is not available; however,
historically the auto industry nationwide expenditures for new
plant and new equipment is 1-2- percent of the value of shipments.
State
Percent of U.S.
Total Automobile Production
Michigan
Missouri
Ohio
New Jersey
California
Georgia
Wisconsin
Other states
33.9
9.2
8.7
6.8
6.7
6.6
6.4
21.7
7-5
-------
EXHIBIT 7-2
U.S. Environmental Protection Agency
LIST OF POTENTIALLY AFFECTED
FACILITIES BY THE RACT
GUIDELINE FOR SURFACE COATING
OF AUTOMOBILES—GEORGIA
Company or Division
General Motors: GM
Assembly
Ford Motor Company
Location
Doraville
Lakewood
Atlanta
(Hopeville)
Make and Type of Vehicle
Manufactures
Chevelle
Monte Carlo
Cutless
LeManns
Grand Prix
Torino
Automobile Production
for the 1976 Model Year
(thousand)
265
139
134
Cougar
Total, Georgia (approximately 6.6 percent of U.S. total automobile production)	538
Truck Production
for 1976 Model Year
(thousand)
95
95
Source: Plants of U.S. Motor Vehicle Manufacturers, 1978, Motor Vehicle Manufacturers Association of the
United States, Inc.
-------
7.2.2 Comparison of the Industry to the State Economy
The Georgia automobile and light duty truck assembly
industry employs approximately 1 percent of the state labor
force, excluding government employees, and approximately 3
percent of the manufacturing labor force. The value of
shipments from automobile assembly plants represents approxi-
mately 10 percent of the statewide value of products manufactured.
7.2.3 Characterization of the Industry
The RACT guidelines apply only to automobile assembly plants
and not to customer shops, body shop or other repainting operations.
The automobile assembly industry receives parts from a variety
of sources and produces finished vehicles. Various models,
usually of the same general body style, may be built on an
assembly line. Assembly lines typically operate at 30 to 75
automobiles per hour and produce approximately 4,000 vehicles per
year.
The automobile manufacturing industry is unique in that
these companies are large and have extensive expertise in the
coatings technology developed. The surface coating of the
automobile must offer adequate protection against corrosion, as
well as provide an attractive appearance and durability for the
customer. In developing technologies to meet the market needs,
the manufacturers have extensive capital invested in specific
technologies. The major difference in current technology within
the industry is the raw material and the associated equipment
used for top coating applications. General Motors has tradi-
tionally utilized lacquer systems, while other manufacturers
traditionally utilize enamel coatings. In 1977, only two plants
were using waterborne enamels, Van Nuys and South Gate California,
both General Motors facilities. For prime coating of automobiles,
there has been a recent trend towards cathodic electrodeposition
because of the increased coverage uniformity and paint recovery.
Some of the anodic electrodeposition facilities installed in the
late 1960s and 1970s have converted to cathodic to eliminate
odor problems, and further improve corrosion protection. However,
the majority of the plants in the U.S. utilize spray, dip or flow
coating for prime coating operations.
7-6
-------
7.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents an overview of the types of coating
process alternatives that might be used to reduce emissions
from the surface coating of automobiles.
7.3.1 Process Description of Surface Coating of Automobiles
There are two major process areas for the surface coating
of automobiles:
Prime coat
Topcoat.
This section provides a summary of central technologies
that may be used for reducing solvent emissions.
7.3.1.1 Primers
The prime coat serves the dual function of protecting the
surface from corrosion and providing for good adhesion of the
topcoat. Currently, most primers used are organic solventborne
and are applied by a combination of manual and automatic spray,
dip or flow coating methods. However, there are a number of
new low organic solvent-based primers, now used in limited
quantities, that could replace these:
Electrodeposition primers—These are electro-
phoretically deposited waterborne primers.
The process can be either cathodic or anodic.
The cathodic, which was developed more recently,
offers an improved corrosion protection but
does have slightly more VOC emissions than the
anodic process. Many automobile assembly facili-
ties have recently invested substantial capital
to convert facilities to the cathodic electro-
deposition process.
Waterborne primers—These are waterborne
primers that are applied by spray, dip or flow
coating processes. The processes require less
capital than an electrodeposition process
but do not offer the product quality advantages.
Powder primers—This technology is still in early
development stages but it could offer significant
emission reductions. Technical problems to date
have been the significant processing changes re-
quired and product smoothness.
7-7
-------
7 3.1.2 Topcoats
Two types of topcoats are currently used in industry—
lacquers and enamels. Most General Motors facilities are
based on lacquer technology while the other automobile manu-
facturers all employ enamel topcoats. There are a number of
technology developments which may apply in future periods.
Waterborne topcoats—Reductions in organic solvent
emissions of up to 92 percent from topcoat spray booths
and ovens are achievable using waterborne topcoats.
The exact reduction depends on both the original
coating and the replacement. If, for example the
original coating were 12 volume percent solids
lacquer (6.5 lbs. of organic solvent per gallon
of coating) and the waterborne had 2.8 lbs. of
organic solvent per gallon of coating (as do GM
coatings in California), reduction would be 92
percent. If the original coating were 33 volume
percent solids, reduction would be 70 percent.
Waterborne topcoats are currently being used at
two General Motors automobile assembly plants in
California on a full-scale basis. Although there can be
no argument as to the technical feasibility of water-
borne topcoats, the number of major process modifications
necessary to retrofit this technology to an existing
plant are significant (often requiring a complete
new processing line). Also, the utilization of
energy is much greater than for solvent systems.
Powder coatings—Acrylic powder coatings have been
evaluated as topcoats for General Motors and Ford
cars on a development basis at Framingham, Massachusetts,
and Metuchen, New Jersey. Along with process color
change and other difficulties that are potentially
correctable, the greatest remaining obstacle to
powder utilization as an automotive topcoat is the
lack of an acceptable metallic color. This commercial
unacceptability of powder metallic colors would be
a particular problem since over 50 percent of
cars manufactured over the past several years
have been metallic.
Although very low in hydrocarbon emissions, powder
coatings do not represent a viable approach for
automobile manufacturers in the near-term future.
7-8
-------
High solids (60-80% by volume solids) two-component
urethanes—Considerable research effort is being
devoted to high solids (60-80% by volume solids)
low temperature curing urethane systems. Experience
with urethanes in general in the aircraft industry
indicates excellent weathering and environmental
resistance at the low coating weights required on
aircraft, although the urethanes used are not at
60-80 percent solids as applied.
At this point in time, there does not appear to
have been any major evaluation by automotive manufac-
turers of the higher solids materials.
High solids urethane systems do offer significant
potential in reducing emissions and energy costs,
but would not be expected to be available for auto-
motive use in the near future.
An additional problem with urethanes is the expo-
sure to isocyanates from the coatings. Exposure would
have to be minimized to assure worker safety.
High solids (35-55% by volume solids) disper-
sion lacquers—Many suppliers have taken an interme-
diate approach to high solids systems. For example,
a 55 percent solids dispersion system is currently
in use on trucks in Canada on an advanced development
basis. High solids dispersion systems (35 percent)
have also recently been evaluated at an Oldsmobile
plant.
None of these, however, have been production proven on
automotive lines and additonal development would be
required to evaluate their performance.
High solids (30-62% by volume solids) enamels—All
major automobile manufacturers other than General
Motors use enamel topcoats. The average solids
content of enamels currently being applied is approxi-
mately 30 percent; metallic colors usually have a lower
solids content. Paint suppliers and the automotive
industry are actively attempting to achieve higher
solid enamels.
7-9
-------
In the short term (1 to 2 years), some higher solids
colors may be available for use; however, it is un
likely that the full color offering (especially
metallics) could be converted to high solids technology.
7.3.2 Emissions and Current Controls
This section presents the estimated VOC emissions from
automobile assembly facilities in Georgia and the current
level of emission controls in the state. Exhibit 7-3, on
the following page, shows the estimated emissions in 1977
from the two major companies.
The General Motor facility at Lakewood manufactures
both automobiles and light duty trucks. The total VOC
emissions from this facility are approximately 6,200
tons per year.
Prime coat application is by spray and dip
methods.
- Automobile topcoat is a solution acrylic
lacquer at approximately 13 percent solids.
Light duty topcoat is enamel.
The General Motors facility at Doraville manufactures
only automobiles. The total VOC emissions from this
facility are approximately 6,600 tons per year. The
coating operations are conventional primer systems
and a lacquer topcoat system.
The Ford Motor facility in Atlanta manufactures only
automobiles. The total VOC emissions from this
facility were approximately 1,000 tons annually in
1977.
Prime coat application is by cathodic
electrodeposition.
The topcoat is an enamel system at 30 percent
solids (75 percent). The light metallic
colors have a lower solids content.
7-10
-------
EXHIBIT 7-3
U.S. Environmental Protection Agency
GEORGIA VOC EMISSION—SURFACE
COATING OF AUTOMOBILES
Facility/Location
General Motors
Doraville, GA
Coating Process
Prime spray
Prime dip
Topcoat
Repair
Estimated 1977 VOC Emissions
(tons per year)
1,368
266
4,927
40
General Motors
Lakewood, GA
Subtotal
Primer
Topcoat
Repair
6,601
866
5,278
23
Ford Motor Company
Atlanta, GA
Subtotal
Primer (electrodeposition)
Topcoat
Repair
Subtotal
6 ,167
80'
860
	12
952
TOTAL, Georgia
13 ,720
a. Estimated by Booz, Allen assuming cathodic electrodeposition.
Source Georgia Department of Natural Resources, Booz, Allen & Hamilton Inc.
-------
7.3.3	RACT Guidelines
The RACT guidelines (as recommended in EPA-450/2-77-008)
for VOC emission control specify the amount of allowable
VOC in pounds per gallon of coating, minus any water in the
solvent system. The RACT guidelines have established different
limitations for each process operation. These recommended
limits are shown in the table below.
Average Lbs. VOC/
Affected	Gallons of Coating
Process Operations	Minus Water	
Prime application, flash-off	1.9
area and oven
Topcoat application, flash-off	2.8
area and oven
Final repair application, flash-	4.8
off area and oven
These limits apply to all objects surface coated in the
plant, including the body, fenders, chassis, small parts, wheels
and sound deadeners. It does not apply to adhesives.
These guidelines, as stated, are very specific to certain
types of control options either in emission limit or timing
that may be subject to change by the EPA, in the near future.
The prime coat application limitations were based
on an anodic electrodeposition system followed
by a 25 percent solids waterborne surface coat
for thickness and improved adhesion of the top-
coat. Since the guideline development, it has
been recognized that a cathodic electrodeposition
system offers additional benefits especially
in the areas of increased corrosion protection
and odor control. With current coating technology,
the 1.9 pounds per gallon limitations of the RACT
guidelines cannot be achieved with a cathodic system
(emissions would be approximately 2.1 pounds per
gallon). In light of continued technology develop-
ment and potential change in limits, it was assumed
for purposes of this anaylsis, that a cathodic
electrodeposition process with emissions of
approximately 2.1 pounds per gallon would meet
the RACT requirements.
7-11
-------
The topcoat limits were based on water-
borne systems that were introduced at the
General Motors South Gate and Van Nuys,
California, facilities to meet Los Angeles
emission regulations. For purposes of
this analysis, two scenarios were assumed
in which RACT topcoat limitations could
be met—(1) waterborne coatings and (2)
other technology with equivalent emission
character. It is anticipated that new
technology will be developed which will
effect reductions equivalent to water-
borne coatings at lower costs and energy
use.
7.3.4	Selection of the Most Likely RACT Alternatives
Projecting the most likely industry response for control
of VOC emissions in automobile assembly facilities is compli-
cated by the different processing techniques manufacturers have
in place and the potential change of recommended RACT limita-
tions. Several general assumptions can be made.
The RACT limitations as recommended (EPA-450/2-77-
008) for prime coat application, flash-off area and
oven are specifically based on use of an anodic
electrodeposition system followed by a 25 percent
solids waterborne coating. Recent technology
developments in cathodic electrodeposition provide
an improved system (versus anodic electrodeposition)
and, therefore, this is likely to be the preferred
industry response wherever feasible.
The RACT limitations, as recommended for topcoat
application, flash-off area and oven, are specifically
based on use of waterborne coatings at two General
Motors facilities. Although this alternative is
extremely capital and energy intensive, it is the
only currently available proven alternative that
would meet the recommended RACT limitations, if
compliance is required by the 1982 timeframe.
Other topcoat coating technologies (such as high
solids enamels, urethane enamels or powder coatings)
could potentially offer significant emission reduc-
tion and be cost effective for manufacturers. However,
these technologies are at various stages of develop-
ment and none have been technically proven for an
automotive assembly plant.
7-12
-------
The industry will install incinerators only as a
last resort if there is no economically feasible,
low solvent coating technology available. Incin-
eration may, however, be used in combination with
coatings of reduced solvent content to produce
emission levels in accord with the RACT guidelines.
For instance, an assembly plant using a topcoat
enamel system may use a higher solids enamel and
incinerate a portion of the emissions.
Carbon adsorption systems are not a likely control
alternative because of the large air flow rate
of the spray system.
Due to the uncertainty of the industry response to the
RACT recommended limitations, two scenarios of selection of
alternatives were developed for purposes of this study.
Scenario I (High Side)—the industry response
to meet the recommended RACT limitations by
1982 would be:
Prime coat—anodic or cathodic
electrodeposition
- Topcoat—waterborne coating
Final repair—organicborne enamel with
35 percent solids
Scenario II (Technology Dependent)—RACT timing
requirements and possibly emission limitations are
modified to meet developing technologies.
Exhibits 7-4 and 7-5, on the following pages, present the
selection of the most likely RACT alternatives under the two
scenarios.
7-13
-------
EXHIBIT 7-4
U.S. Environmental Protection Agency
SELECTION OF THE MOST LIKELY RACT
ALTERNATIVES UNDER SCENARIO I (RACT
COMPLIANCE BY 19 82)
Processing
Area
Primer
Control
Alternatives
Anodic electrodeposition
primer followed by water-
borne "surfacer"
Cathodic electrodeposi-
tion primer followed by
a waterborne or high
solids "surfacer"
Discussion
Very low VOC emission
levels are achievable
yet system has some
technology disadvantages
to other alternatives
Offers improved corrosion
protection and eliminates
odor problem of anodic
"E-coat"
Spray, dip or flow coat
primers with incinera-
tion
VOC emission levels are
moderately higher than
the recommended RACT
limitations
High operating cost for
energy demands
Topcoat
Waterborne enamels
Repair
35 percent solids
enamel
Current or modified
coatings with incin-
eration
Only technologically
proven alternative that
would meet the RACT
requirements
Extremely high capital
cost and energy require-
ments
Technology is not fully
developed, i.e., some
colors cannot be matched
with currently available
coatings
High operating cost for
energy demands
Source: Booz, Allen & Hamilton Inc.
-------
EXHIBIT 7-5(1)
U.S. Environmental Protection Agency
SELECTION OF THE LIKELY RACT
ALTERNATIVES UNDER SCENARIO II
(MODIFIED RACT TIMING AND POSSIBLY
LIMITATIONS)
Processing
Area
Control
Alternatives
Discussion
Primer
Anodic electrodeposition
primer followed by water-
borne "surfacer"
Very low VOC emission
levels are achievable
yet system has some
technology disadvantages
to other alternatives
Cathodic electrodeposi-
tion primer followed by
a waterborne or high
solids "surfacer"
Offers improved corrosion
protection and eliminates
odor problem of anodic
"E-coat"
Other spray, dip or
flow coat primers with
incineration
VOC emission levels are
moderately higher than
the recommended RACT
limitations
High operating cost for
energy demands
Powder coatings
Undeveloped technology
however, has potential
applications for use
on steel or as "surfacer"
Low VOC emission levels
might be achievable and
cost effective
Topcoat
Waterborne enamels
Only technologically
proven alternative that
would meet the RACT
requirements
Extremely high capital
cost and energy require-
ments
-------
EXHIBIT 7-5(2)
U.S. Environmental Protection Agency
Processing	Control
Area	Alternatives
High solids enamels
Urethane enamels
Powder
Repair	35 percent solids
enamel
Discussion
Technology to achieve
the 62 percent solids
required by RACT limi-
tations is not developed.
However, paint suppliers
are optimistic for
potential application
of up to a 55 percent
solids enamel
If technology develops
only minor modifications
would be required at
facilities currently
using enamels
Major modifications
would still be required
for facilities using
lacquer coatings
Technology is not
developed
Potentially large
energy savings and
improved properties
Toxicity protection is
required for workers
Technology is not
developed
Potential energy and
recovery savings
Color limitations
Technology is not fully
developed, i.e., some
colors cannot be matched
with currently available
coatings
-------
EXHIBIT 7-5(3)
U.S. Environmental Protection Agency
Processing	Control
Area	Alternatives	Discussion
Current or modified coat-	High operating cost for
ings with incineration	energy demands
Source: Booz, Allen & Hamilton Inc.
-------
7.4 COST AND VOC BENEFIT EVALUATIONS FOR THE MOST LIKELY RACT
ALTERNATIVES
Costs for the two assumed scenarios of alternative VOC
emission controls are presented in this section. Under Scenario
I, it is assumed that the RACT requirements would be met by a
waterborne system. Under Scenario II, it is assumed that the
RACT timing requirements (and possibly limitations) are modified
to meet developing technologies. The costs presented in this
section are based on studies performed by the EPA and automobile
manufacturers to determine the estimated costs for actual plants.
The study team utilized published data to develop the cost estimate
presented in the section. The final section presents an extra-
polation of the typical costs for automobiles assembly plants
to meet the RACT requirements for the two scenarios.
7.4.1 Costs for Alternative Control Systems under Scenario I
Under Scenario I, it is assumed that the RACT requirements
must be met with existing proven technology. Therefore, the
following control alternatives are assumed:
Cathodic or anodic electrodeposition of
primers. Although the RACT requirements of
1.9 pounds of VOC emissions per gallon of
coating are specific for the anodic process,
this analysis assumes that cathodic electro-
deposition of waterborne coatings would meet
the RACT requirements
Waterborne topcoat system
35 percent volume solids enamel repair system
A electrodeposition waterborne system can be used only
directly over metal or other conductive surfaces. Although the
system offers an improved product advantage over other types of
primer application methods, the conversion represents a signifi-
cant capital cost. The cost of conversion for a typical electro-
deposition system at an automobile assembly plant is presented
below. Costs will vary significantly depending on the retrofit
situation.
The installed capital cost would be approximately
$10 million to $12 million, not including
additional energy requirements (if necessary).
Direct operating costs (utilities, direct labor
and raw materials) would be approximately $20,000
less annually than conventional application
techniques.
7-14
-------
Interest, depreciation, taxes and insurance are
estimated to be $1.9 million annually (assuming
19 percent of capital investment based on a:
20-year equipment life
10 percent interest rate
4 percent for taxes and insurance.
Therefore, the total annualized cost of the conver-
sion to an electrodeposition waterborne system would
be approximately $1.9 million.
The additional energy demands are estimated to be
approximately 5 million to 6 million kilowatt
hours per year.
If the electrodeposition system were anodic, the resulting
VOC emissions would be approximately 1.9 pounds of VOC per gallon
of coating (including primer surfacer emissions). If the
electrodeposition system were cathodic, the resulting VOC
emissions would be approximately 2.5 pounds of VOC per gallon
of coating. For purpose of analysis of VOC emission reduction,
2.5 pounds per gallon of coating is assumed.
The conversion of the topcoat application to a waterborne
system would require extensive modification of the existing
facilities, essentially equivalent to the cost of new line. The
conversion would require changes such as humidification equip-
ment, a longer spray booth, new ovens, replacement of existing
piping with stainless steel piping, sludge handling equipment,
floor conveyors (for some facilities) and additional power
generating equipment. The conversion cost for a waterborne
system has been estimated by the EPA and all the major automobile
manufacturers. These estimates may differ by 100 percent depending
on the particular facility being studied. After an evaluation
of these cost estimates, the study team found that a typical
facility is likely to incur the following costs to convert to
a waterborne system.
The installed capital cost would be approximately
$40 million to $50 million including additional
power requirements.
Incremental direct operating costs (utilities,
direct labor and raw materials) would be approxi-
mately $750,000 annually, mostly for energy.
Interest, depreciation, taxes, and insurance
are estimated to be approximately $9 million
annually (assuming 19 percent of capital
based on a 20-year equipment life, 10 percent
interest rate and 4 percent for taxes and
insurance).
7-15
-------
The annualized cost of the conversion to
a waterborne system would be approximately
$10 million.
The additonal energy demands are estimated
to be equivalent to approximately 38,000
equivalent barrels of oil annually.
The resulting VOC emission from a waterborne system would
be approximately 2.8 pounds of VOC per gallon of coating.
The cost of conversion to a 35 percent enamel for topcoat
repair is assumed to be minimal in relation to the conversion costs
for the other coating applications. A 35 percent topcoat repair
enamel cannot be obtained today for all types of paints applied.
However, this limitation might be met by incinerating a portion
of the total emissions to achieve the 4.8 pounds per gallon
limitation.
7.4.2 Cost for Alternative Control Systems under
Scenario II
Under Scenario II, it is assumed that the RACT timing
requirements (and possibly limitations) are modified to reflect
developing technologies. Therefore, the following control
alternatives are assumed:
Cathodic or anodic electrodeposition of
primers
High solids enamels, urethane enamels or
powder coatings technologies developed
for topcoat application
35 percent solids enamel used for topcoat
repair.
The conversion cost for a electrodeposition waterborne
system would be the same as developed for Scenario I.
The conversion of the topcoat application to a high
solids enamel, urethane enamel or powder coating would
depend on the particular system applied and the current
coating technology used by the manufacturer. Therefore,
costs were estimated for manufacturers currently using
enamels and lacquers.
For manufacturers who are currently using
enamel topcoating, this analysis assumes
that they would meet the RACT requirements
with high solids enamel technology develop-
ments .
7-16
-------
Under this scenario, minimal capital
and operating costs changes would
be required as the existing equipment
is likely to be adjustable to higher
solids coatings.
The average VOC emissions per gallon of
coating would depend on the high solids
enamels that are developed. Depending
on the timing constraints, high solid
enamels ranging from 40 percent to 6 3
percent could be achieveable based on
projected technology developments
that are currently being applied by
other industrial sectors.
For manufacturers that are currently using lacquer
topcoat systems, there is likely to be significant
capital requirement to meet further technology
development:
A conversion to high solids enamel is
likely to require changes in equipment,
such as:
Conveyor systems
Ovens
In-house repair
Spray systems
Sludge disposal system.
The conversion requirements for urethane
enamels or powder coatings is at too
early a stage to estimate costs.
The equipment modifications would depend
on the particular technology adapted at
these facilities and the available equip-
ment. Based on Booz, Allen study team
estimates, the anticipated capital
costs are likely to be less than $10
million per facility. Therefore, for
purposes of this study, a judgmental
analysis leads to the following cost
determination to convert current lacquer
processing:
Capital cost of $10 million
Annualized cost of $1.9 million
(assuming 19 percent of capital
cost for capital related costs).
7-17
-------
Exhibit 7-6, on the following page, presents the conversion
costs for the two scenarios developed.
7.4.3 Extrapolation to the Statewide Industry
Exhibit 7-7, following Exhibit 7-6, presents the extra-
polated costs of meeting the RACT guidelines under two scenarios
that were developed. These costs are based upon:
The estimates of cost of compliance under
the two scenarios that were presented
in sections 7.4.1 and 7.4.2.
' The three potentially affected facilities
in the state:
The two General Motors facilities, which
would require capital expenditures for
primer and topcoat applications
The Ford facility, which would require
only capital costs for topcoat applica-
tions (i.e., a cathodic electrodeposition
process has already been installed).
7-18
-------
EXHIBIT 7-6
U.S. Environmental Protection Agency
ESTIMATED COST FOR MODEL PLANT TO
MEET AUTOMOBILE RACT REQUIREMENTS
SCENARIO I
Primer
Topcoat
Final repair
Total,
Scenario I
Capital Cost
($ millions)
10-12
40-50
50-62
Direct
Operating Cost
($ millions)
(0.02)
0.8
0.78
Annualized
Capital Cost
($ millions)
1.5-1.8
6.0-7.5
7.5-9.3
Annualized
Cost—Rounded
($ millions)
1.6
8
Energy
Demand
(equivalent
barrels of oil)
13,000
37,000
9 . 6
50,000
SCENARIO II
Primer	10-12	(0.02)	1.5-1.8	1.6	13,000
Topcoat
(Enamel	<10/<1	-	<1.5	<1.5
facilities/
laquer
facilities)
Final repair	-	-	-	-	-
Total,
Scenario II	10-22	-	1.5-3.3	1.6-3.1	13,000
Source: Booz, Allen & Hamilton Inc.
-------
Number of plants
EXHIBIT 7-7
U.S. Environmental Protection Agency
STATEWIDE COSTS TO MEET THE RACT GUIDELINES
FOR AUTOMOBILE ASSEMBLY PLANTS
Characteristic
Scenario I
Scenario II
1977 VOC emissions
(tons per year)
13,700
13,700
Potential emission
reduction
(tons per year)
11,400
6, 900-11,400'
VOC emissions after
RACT
(tons per year)
2, 300
2,300-6,800
Capital cost
($ millions, 1977)
160
43
Annualized cost
($ millions, 1977)
27
Annualized cost per
ton of emission reduction
2, 360
525-870
a. Emission reduction based on average solids concentration
of topcoat of 40 percent to 62 percent.
Source: Booz, Allen & Hamilton Inc.
-------
7.5 DIRECT ECONOMIC IMPLICATIONS
This section presents the direct economic implications
of implementing RACT controls to the statewide industry, in-
cluding: availability of equipment and capital; feasibility
of the control technology; and impact on economic indicators,
such as value of shipments, unit price, state economic
variables and capital investment. In this sectiqn, both
scenarios that were developed for surface coating of auto-
mobiles are discussed.
3.5.1 RACT Timing
Under Scenario I, it is assumed that the recommended
RACT guidelines must be implemented statewide by 1982. This
implies that the automobile manufacturers must have either
low solvent coatings or VOC control equipment installed and
operating within the next four years. The timing of RACT
is discussed for each of the major processes within auto-
mobile facilities.
To meet the RACT requirement for primer coating
operations, cathodic or anodic electrodeposition
will have to be installed. In general, the
industry has been installing the cathodic electro-
deposition process over the past few years
and many new installations are planned over
the next few years.
These timing requirements for primers
represent a moderate forcing of the
current technology trend for most
manufacturers.
For General Motors, which has two
facilities, the conversion to an
electrodeposition process represents
significant changes in their current
process. Construction plans would
have to start soon to meet the 19 82
timeframe.
To meet the RACT requirements for topcoating
operations, the only proven technology existing
today is waterborne coating.
- Conversion to waterborne coatings
represents a complete changeover of
existing facilities. Essentially,
new production lines would have to
be installed at all three affected
facilities in Georgia.
7-19
-------
Construction alone would probably take
between three to four years. Although
this deadline of construction might be
met if Georgia were the only state
implementing RACT, it could not be
met on a nationwide basis by automobile
manufacturers.
To meet the RACT requirements for final repair,
the equivalent of a 35 percent solids enamel
must be achieved.
At the General Motors facilities, which
utilize lacquers, this represents
a significant change in technology.
Spot repair procedures and possibly
conveyor systems would have to be
modified for implementation.
At General Motors, which utilizes an
enamel system, it has not been proven
that high solids enamels can be achieved
for metallic colors. The timing require-
ments might have to be met with add-on
control equipment in the short run (until
technology developments are proven for
higher solids enamel repairs).
Under Scenario II, it is assumed that RACT timing requirements
are modified, so that implementation would meet developing
technologies. The only major processing area where signifi-
cant timing modifications need to be adapted would be for
topcoating (and possibly for the primer surfacer).
It is likely that higher solids enamels technol-
ogies will be developed over the next two or
three years, although it is highly unlikely
a 62 percent solids enamel could be developed
before 1980.
Topcoat changes at General Motors are likely to
be substantial unless an adaptable technology
can be developed.
The sections which follow further discuss the feasibility
of implementing RACT within the required timeframe and the'
economic implications.
7-20
-------
7.5.2	Feasibility Issues
Technical and economic feasibility issues of implementing
RACT controls are discussed in this section.
The automobile manufacturing industry has extensively
evaluated most of the approaches to meeting RACT. The feeling
in the industry is that RACT cannot be achieved by January 1,
1982, using low solvent coatings—primarily waterborne.
The capital construction requirements to
achieve waterborne topcoat RACT limitations
cannot be achieved on a nationwide basis
by 1982.
The RACT controls for primer operations could
be achieved by a 19 82 timeframe if they are
modified to incorporate the cathodic electro-
deposition processing technology. However,
in some older facilities where changes are
extensive, additional time may be required.
It is probable that the final repair
limitations could be achieved (with moderate
technology advances) at all automobile facili-
ties currently using enamel systems. The
final repair modifications required at General
Motors would depend on the future topcoat tech-
nology selected to meet RACT requirements.
7.5.3 Comparison of Direct Cost With Selected Direct
Economic Indicators
This section presents a comparison of the net increase
in the annual operating cost of implementing RACT with
automobiles manufactured in the state, the value of wholesale
trade in the state and the unit value of automobiles.
Under Scenario I, which assumes that the recommended
RACT limitations are met with electrodeposition for primers,
waterborne topcoat processes and a 35 percent solids
enamel topcoat:
The capital requirement is estimated to be
$160 million, which represents approximately
300 percent of normal capital expenditures
(assuming current capital expenditures
represent 1.5 percent of value of shipments).
The net annualized cost increase is esti-
mated to be $27 million, which represents
approximately 0.9 percent of the statewide
auto industry's value of shipments.
7-21
-------
Assuming a "direct cost pass-through," the net
price increase would be approximately $45 per
auto or light duty truck manufactured.
The automobile manufacturing industry is a
significant part of the statewide economy,
and the direct cost increase of compliance
represents approximately 0.1 percent of
the value of shipments statewide (all manu-
facturing industry).
Under Scenario II, which assumes that the RACT timing
and possibly limitations are modified to meet technology
developments:
The capital requirement is estimated to
be approximately $43 million, which
represents approximately 80 percent of
normal capital expenditures (assuming
capital expenditures represent 1.5 per-
cent of value of shipments).
The net annualized cost increase is approxi-
mately $6 million, which represents approximately
0.2 percent of the value of shipments.
Assuming a "direct cost pass-through," the price
increase would be approximately $10 per car
manufactured.
The direct cost increase of compliance represents
approximately 0.02 percent of the value of
shipments statewide (all manufacturing industry).
7.5.4	Ancillary Issues Relating to the Impact of RACT
The automobile manufacturers are seeking to have the
guidelines altered to encompass a plantwide emissions basis.
This would allow a credit from one operation, where emissions
were reduced to below the RACT recommended levels, to be
applied to another operation that is not in compliance under
this proposal. The plant would be in compliance if the total
emissions were reduced to the level proposed in RACT. It
appears that the impact of this proposed regulation, if
accepted, would be a reduction in compliance cost of the
RACT requirements. For instance, a manufacturer might
lower the emissions from prime coats below the RACT standard
to avoid installing emission control equipment for final
repair coating operations.
7-22
-------
7.5.5	Selected Secondary Economic Impact
This section discusses the secondary impact of implementing
RACT in employment, market structure and productivity.
Automobile manufacturing is a significant portion of
Georgia's manufacturing industry and Georgia ranks as the
sixth largest automobile manufacturing state in the nation.
If the recommended RACT limitations (Scenario I)
require waterborne coating technology, the
effect would probably be a total remodeling
of existing lines and facilities. These changes
could lead to employment and productivity
changes if the companies increase line speed
during the major modifications required.
If the RACT limitations are modified to
developing technologies, no significant effects
on employment and productivity are forecast.
Regardless of the RACT scenario implemented, no signi-
ficant change in market structure is likely to occur.
Under Scenario I, all manufacturers would
incur cost increases and none of the manu-
facturers stated that this would result
in market structure changes.
Under Scenario II, General Motors is likely
to incur higher costs than other manufacturers
but less cost per facility than under Scenario
I. General Motors feels that all of the currently
proven technology alternatives would result in
quality tradeoffs (with the exception of retrofit
control equipment).
* * * *
Exhibits 7-8 and 7-9, on the following pages, present
a summary of the current economic implications of implementing
RACT under the two scenarios studied for automobile assembly
plants in the state of Georgia.
7-23
-------
EXHI3IT 7-8 (1)
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT SCENARIO I FOR
AUTOMOBILE ASSEMBLY PLANTS IN THE
STATE OF GEORGIA
SCENARIO I
(RACT Limitations
Implemented 3y 1982).
. Current Situation
Number of potentially affected facilities
Indication of relative importance of indus-
trial sector to state economy"
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC control
to meet RACT guidelines
Assumed method of control to meet RACT
guidelines
Affected Areas in Meeting RACT
	Scenario I	
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity and employment
Market structure
Discussion
Two companies operating three facilities
1977 value of shipments was approximately
53.3 billion, which represents approximately
10 percent of the state's manufacturing
industry. Of all states, Georgia ranks
sixth in automobile production
Prime coat—cathodic electrodeposition
topcoats—higher solids enamels for
manufacturers using enamel systems
13,700 tons per year
Cathodic electrodeposition for prime
coat; manufacturers with enamel topcoat—
high solids enamel; manufacturers with
lacquer topcoat—unkown
Cathodic electrodeposition for prime coat
Waterborne enamels for topcoat
High solids enamels for final repair
Discussion
5160 million (approximately 30Q percent
of current annual capital expenditures
for the industry in the state).
527 million (approximately 0.9 percent of
the industry's 1977 statewide value of
shipments1
Assuming a "direct cost pass-through"
approximately 545 per automobile manufac-
tured
Increase of 130,000 equivalent barrels
of oil annually primarily for operation
of waterborne topcoating systems
Conversion to waterborne systems would
require total rework of existing processing
lines. Major modifications would probably
increase efficiency and line speed of
older units.
Accelerated technology conversion to
electrodeposition primer coat.
-------
EXHI3IT 7-3 (2)
U.S. Environmental Protection Agency
SCENARIO I
(RACT Limitations
Implemented 3y 1982)
Current Situation
Discussion
RACT timing requirements (1982)
VOC emission after RACT control
Conversion of all automobile assembly
plants to topcoating waterborne systems
cannot be achieved by 1982
Prime coat RACT limitations are based on
anodic electrodeposition systems and need
to be modified to reflect cathodic pro-
cessing. Topcoat RACT limitations are
based on waterborne coatings, which is not
a cost or energy effective alternative.
Final repair RACT limitations areas based
on high solids enamel technology which
would require major modifications for
manufacturers using lacquer systems
2,300 tons per year (17 percent of 1977
emission level)
Cost effectiveness of RACT control
52,360 annualized cost/annual ton of
VOC reduction
Source: 3ooz, Allen & Hamilton Inc.
-------
SXKI3IT 7-9
U.S. Environmental Pracaction Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT SCENARIO II FOR
AUTOMOBILE ASSEMBLY PLANTS IN THE
STATE OF GEORGIA
SCENARIO II
(RACT Tiramc Requirements And
Possible Limitations Are Modified
To Meet Developing Technologies)
Current Situation
Number of potentially affected facilities
Indication of relative importance of indus-
trial section to state •conomy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC control
to meet RACT guidelines
Assumed method of control to meet RACT
guidelines
Affected Areas in Meeting RACT
	Scenario II	
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity and employment
Market structure
RACT timing requirements
Problem area
VOC emission after RACT control
Cost effectiveness for RACT control
Discussion
Two companies operating three facilities
1977 value of shipments was approximately
S3.5 billion which represents approximately
10 percent of the state's manufacturing
industry. Of all states, Georgia ranks
sixth in automobile production
Prime coat—cathodic electrodeposition
topcoats—higher solids enamels for
manufacturers using enamel systems
13,700 tons per year
Cathodic electrodeposition for prime
coat; manufacturers with enamel topcoat—
high sales enamel; manufacturers with
lacquer topcoat—unknown
Cathodic electrodeposition for prime coat
High solids enamels, urethane enamels or
powder coating for topcoat
High solids enamel for final repair
Discussion
543 million (approximately 80 percent
of current annual capital appropriations
for the industry in the stated
$6 million (approximately 0.2 percent of
the industry's 19 77 statewide value of
shipments)
Assuming a "direct cost pass-through"
approximately $10 per automobile manufac-
tured
Dependent on technology applied
No major effect
Mo major effect—however, General Motors
is likely to have higher conversion costs
to developing technologies
Primer and final repair limitations could
be implemented at most facilities by 1982
Topcoat limitations could be set at a 40
percent to 52 percent solids by 1985
dependent on technology developments
Limitations for topcoat are dependent
on technology development
2,300-6,300 tons per year (17 percent to
50 percent of 1977 emission levels dependent
on limitations).
$525-S870 annualized cost/annual
ton VOC reduction
Sourca: 3ooz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
"Ford's War On Rust," Industrial Finishing. August 1978.
Carl A. Gottesman, "The Finishing Touch," Coat and Painting.
April 28, 1977, pp. 19-24.
"G.M.'s Mel Halstead Looks At...," Industrial Finishing.
April 1977, pp. 16-20.
Bruce N. McBane, "Automotive Coatings," Treatise on Coatings,
Vol. 4: Formulations, Part I, R.R. Myers and J.S. Long, eds.
New York, Marcel Dekker, 1975.
Herbert W. Reiner, "It Pays to Electrocoat," Plating and
Surface Finishing. May 1976, pp. 15-20.
R.E. Roberts and J.B. Roberts, "Reducing Solvent Emissions in
Automotive Spray Paint," J. Air. Poll. Control Assoc. Vol. 26,
No. 4 (April 1976), pp. 353-358.
Joe Schrantz, "The Lincoln Clear Coat Program," Industrial
Finishing. July 1978, pp. 20-23.
General Motors Corporation, Recommended VOC Emission Limita-
tions and Technical Support Document for the State of Ohio,
July 1978.
Motor Vehicle Manufacturers Association of the U.S., Inc.,
Plants of U.S. Motor Vehicle Manufacturers. December 1977.
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Existing Stationary Sources, Vol. II.
EPA-450/2-77-008, May 1977.
Letter to Mr. Ned E. Williams, Director, Ohio Environmental
Protection Agency, from Environmental Activities Staff of
General Motors Corporation, August 16, 1978.
Private conversations at General Motors, Warren, Michigan.
Private conversations at American Motors, Detroit, Michigan.
Private conversations at Ford Motor Company, Dearborn, Michigan.
-------
8.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
SURFACE COATING OF METAL
FURNITURE IN THE STATE
OF GEORGIA
-------
8.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
SURFACE COATING OF METAL
FURNITURE IN THE STATE OF
GEORGIA
This chapter presents a detailed economic analysis of
implementing RACT controls for surface coating of metal
furniture in the State of Georgia. The chapter is divided
into six sections:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Cost and VOC reduction benefits for the most
likely RACT alternatives
Direct economic implications
Selected secondary economic impacts.
Each section presents detailed data and findings based
on analyses of the RACT guidelines, previous studies of
metal furniture plants, interviews with industry representa-
tives and analysis of findings.
8-1
-------
8.1 SPECIFIC METHODOLOGY AMD QUALITY OF ESTIMATES
This section describes the methodology for estimating:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Cost of controlling VOC emissions
Economic impact of emission control
for surface coating of metal furniture in Georgia.
The quality of the estimates is described in detail in
the last part of this section.
8.1.1	Industry Statistics
Industry statistics on metal furniture manufacturing
plants were obtained from several sources. All data were
converted to a base year 1977, based on specific scaling
factors. The number of establishments for 1977 was based on
the Georgia Directory of Manufacturers supplemented by a
review of the 1976 County Business Patterns, and verified
and refined by interviews with potentially affected metal
furniture manufacturing corporations. The number of em-
ployees was obtained during interviews with potentially
affected metal furniture manufacturers.
The industry value of shipments was estimated by using
the national ratio of value of shipments to number of em-
ployees for business and institutional furniture, SIC Codes
2522, 2531 and 2542 from the 1976 Annual Survey of Manufac-
tures . This ratio of approximately $40,000 per employee is
in agreement with the actual value of shipments to employees
ratio for one metal furniture firm in Georgia, based on
information supplied by the firm.
8.1.2	VOC Emissions
The VOC emmissions were estimated based on information
obtained from the affected facilities with regard to through-
put of coating materials, number of coating lines, and
coating processes used.
8-2
-------
8.1.3 Processes for Controlling VOC Emissions
Processes for controlling VOC emissions for metal
furniture plants are described in Control of Volatile Organic
Emissions from Stationary Sources, EPA-450/2-77-032. The
data provide the alternatives available for controlling VOC
emissions from metal furniture manufacturing plants.
Several studies of VOC emission control were also analyzed
in detail, and metal furniture manufacturers were inter-
viewed to ascertain the most likely types of control
techniques to be used in metal furniture manufacturing
plants in Georgia. The specific studies analyzed were
Air Pollution Control Engineering and Cost Study of General
Surface Coating Industry, Second Interim Report, Springborn
Laboratories, and informational literature supplied by the
metal furniture manufacturers.
8.1.4 Cost of Controlling VOC Emissions for Surface
Coating of Metal Furniture
The costs of control of volatile organic emissions for
surface coating of metal furniture were developed by:
Determining the alternative types of control
systems likely to be used
Estimating the probable use of each type of
control system
Defining equipment components
Developing installed capital
cations of existing systems
Aggregating installed capital
alternative control system
Defining a model plant
Developing costs of a control
model plant:
Installed capital cost
Direct operating cost
Annual capital charges
Energy requirements
costs for modifi
costs for each
system for the
8-3
-------
Extrapolating model costs to individual industry
sectors
Aggregating costs to the total industry for the
state.
The model plant used as the basis for estimating the
costs of meeting RACT was a solvent based electrostatic
spraying operation. The cost of modifications to handle
high solids coatings was not considered to be a function of
the type of metal furniture to be coated, since no modifi-
cations to the production lines are necessary. Modifica-
tions are required only to the coatings handling and pumping
and spraying equipment, and these would not differ for
different types of furniture pieces.
8.1.5	Economic Impacts
The economic impacts were determined by analyzing the
lead time requirements to implement RACT, assessing the
feasibility of instituting RACT controls in terms of capital
availability and equipment availability, comparing the
direct costs of RACT control to various state economic
indicators and assessing the secondary effects on market
structure, employment and productivity as a result of imple-
menting RACT controls in Georgia.
8.1.6	Quality of Estimates
Several sources of information were utilized in assess-
ing the emissions, cost and economic impact of implementing
RACT controls on the surface coating of metal furniture in
Georgia. A rating scheme is presented in this section to
indicate the quality of the data available for use in this
study. A rating of "A" indicates hard data (data that is
published for the base year), "B" indicates data that was
extrapolated from hard data and "C" indicates data that was
not available in secondary literature and was estimated
based on interviews, analysis or previous studies and best
engineering judgment. Exhibit 8-1, on the following page,
rates each study output listed and the overall quality of
the data.
8-4
-------
EXHIBIT 8-1
U.S. Environmental Protection Agency
SURFACE COATING OF METAL FURNITURE DATA QUALITY
ABC
Extrapolated Estimated
Study Outputs	Hard Data	Data	Data
Industry-
statistics	X
Emissions	X
Cost of
emissions
control	X
Economic impact	X
Overall quality
of data	X
Source: Booz, Allen & Hamilton Inc.
-------
8.2 INDUSTRY STATISTICS
Industry characteristics, statistics and business
trends for metal furniture manufacturing plants in Georgia
are presented in this section. Data in this section form
the basis for assessing the economic impact of implementing
RACT for control of VOC emissions from metal furniture
manufacturing plants in the state.
8.2.1	Industry Characteristics
Metal furniture is manufactured for both indoor and
outdoor use and may be divided into two general categories:
office or business and institutional, and household.
Business and institutional furniture is manufactured for use
in hospitals, schools, athletic stadiums, restaurants,
laboratories and other types of institutions, and government
and private offices. Household metal furniture is manufac-
tured mostly for home and general office use. No manufac-
turers of metal household furniture potentially affected by
RACT guidelines were identified in the state.
8.2.2	Size of the Industry
Booz, Allen, through interviews, has identified 3
companies participating in the manufacture and coating of
metal business and institutional furniture that are poten-
tially affected by RACT guidelines, as shown in Exhibit 8-2,
on the following page. These companies accounted for an
estimated $18.5 million in business/institutional metal
furniture shipments in 1977. This is equivalent to about
0.6 percent of the U.S. value of shipments of business/
institutional metal furniture. The number of employees in
the three metal furniture manufacturing firms in Georgia is
approximately 460.
8.2.3	Comparison of the Industry to the State Economy
A comparison of the value of shipments of metal furni-
ture with the state economy indicates that the metal furni-
ture industry represents about 0.16 percent of the total
Georgia value of shipments of all manufactured goods and the
three affected facilities represent approximately 0.07
percent. The industry employs approximately 0.3 percent of
all people employed in manufacturing in Georgia, and the
three affected facilities employ approximately 0.13 percent.
8-5
-------
EXHIBIT 8-2
U.S. Environmental Protection Agency
LIST OF MANUFACTURERS POTENTIALLY AFFECTED
BY RACT GUIDELINES FOR SURFACE COATING OF
METAL FURNITURE IN GEORGIA
Facility Name	Location
HON Company	Cedartown
JEBCO, Inc.	Warrenton
Leggett & Piatt,	Inc.
Masterack Div.	Atlanta
Source; Georgia Directory of Manufacturers and Booz, Allen
and Hamilton Inc. interviews
-------
8.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents information on metal furniture
manufacturing operations, estimated VOC emissions, the
extent of current control and the likely alternatives which
may be used for controlling VOC emissions in Georgia.
8.3.1	Metal Furniture Manufacturing and Coating
Operation
Manufacturing of metal furniture consists of the follow-
ing steps: fabrication• of furniture parts, coating and
final assembly. Coating operations usually include surface
preparation, coating and curing. These operations are
discussed in detail in the EPA guideline series Control of
Volatile Organic Emmissions from Existing Stationary Sources,
Volume III: Surface Coating of Metal Furniture, EPA-450/
2-77-032, December 1977.
8.3.2	Emissions and Current Controls
This section presents the estimated VOC emissions from
metal furniture manufacturing facilities in Georgia in 1977
and the current level of emission controls implemented in
the state. Exhibit 8-3, on the following page, shows the
total emissions from the 3 metal furniture manufacturing
facilities to be about 366 tons per year. These emissions
were estimated, based on annual throughput of coating
materials and solvents obtained through interviews with the
manufacturers. None of these manufacturers has implemented
complete hydrocarbon emissions controls systems, although
two are currently using medium solids paint (38 percent
solids) and could use 60 percent solids with existing
equipment. Experiments with water based coatings have not
provided the quality of finish or the production line speed
desired.
8.3.3	RACT Guidelines and Control Options
The emission limitations that can be achievied through
the application of Reasonably Available Control Technology
(RACT) for the metal furniture coating industry are presented
in Exhibit 8-4, following Exhibit 8-3. This emission limit
is based on the use of low organic solvent coatings. It can
also be achieved with waterborne coatings, and is approximately
equivalent (on the basis of solids applied) to the use of an
add-on control device that collects or destroys about 80
8-6
-------
EXHIBIT 8-3
U.S. Environmental Protection Agency
SUMMARY OF HYDROCARBON EMISSIONS FROM METAL FURNITURE
MANUFACTURING FACILITIES IN GEORGIA
Facility Name
HON Company
JEBCO, Inc.
Leggett & Piatt
Masterack. Div.
Total Statewide
No. of
Sources
2
3
Current Average
Hydrocarbon
Emissions
(Tons/Year)
165
100
101
366
Source: Booz, Allen and Hamilton Inc. Interviews.
-------
EXHIBIT 8-4
U.S. Environmental Protection Agency
EMISSION LIMITATIONS FOR RACT IN SURFACE
COATING OF METAL FURNITURE
Recommended Limitation
Affected Facility
Metal furniture coating line
kg of organic solvent
emitted per liter of
coating (minus water)
0.36
lbs. of organic solvent
emitted per gallon of
coating (minus water)
3.0
Source: Control of Volatile Organic Emissions from Existing Stationary Sources, Volume III:
Surface Coating of Metal Furniture, EPA-450/2-77-032, December 1977.
-------
percent of the solution from a conventional high organic solvent
coating. In some cases, greater reductions ("up to 90 percent)
can be achieved by installing new equipment which uses powder
or electrodeposited waterborne coatings. A comparison of the
various control options is presented in Exhibit 8-5 on the
following pages.
8.3.4 Selection of the Most Likely RACT Alternatives
The choice of application of control alternatives, for
the reduction of hydrocarbon emissions in existing facili-
ties for the surface coating of metal furniture, requires a
line-by-line evaluation. A number of factors must be con-
sidered, based on the individual characteristics of the
coating line to be controlled. The degree of economic
dislocation is a function of these factors.
The first factor to be considered is whether the
existing equipment can be used by the substitution of a
coating material which will meet the RACT guideline. This
alternative would require the least capital expenditure and
may minimize production downtime.
If the existing equipment has to be modified, replaced
or expanded, factors to consider are the kind of changes
that have to be made, the capital costs, the change in
operating costs, the length of time needed to make the
changes, the effect on the production rate, the operational
problems that will have to be handled and the effect on the
quality of the product.
Interviews with industry representatives indicate that
the affected manufacturers will use their existing spraying
equipment and modify it to handle high solids coatings. The
reasons given for this preference are that a high quality
finish is required, and that extremely high capital costs are
required for conversion to waterborne coatings or electro-
deposition in relation to the high solids alternative.
8-7
-------
Control Options
Waterborne
(electrodeposition,
EDP)
Affected Facility
and Application
Primecoat or
single coat
EXHIBIT 8-5(1)
U.S. Environmental Protection Agency
RACT CONTROL OPTIONS FOR THE METAL FURNITURE INDUSTRY
Typical Percent
Reduction
90-95a
Comparison of Control Options
Provides excellent coverage,
corrosion protection and
resistance
Fire hazards and potential
toxicity are reduced
Dry off oven may be omitted
after cleansing if an iron-
phosphate pretreatment is
used
Good quality control due to
fully automated process may
be offset by increased
electrical requirements for
the coating, refrigeration
and circulation systems if
EDP replaces waterborne
flow or dip coating opera-
tions. This would not be
true if EDP replaces a
spraying operation
EDP can be expensive on small-
scale production lines
-------
Affected Facility
Control Options	and Application
Waterborne (spray dip All applications
or flow coat)
EXHIBIT 8-5(2)
U.S. Environmental Protection Agency
Typical Percent
Reduction
60-90a
Comparison of Control Options
This will likely be the first
option considered because of
the possibility that these
coatings can be applied
essentially with existing
equipment
Requires a longer flash-off
area than organic solvent-
borne coatings
Curing waterborne coatings
may allow a decrease in
oven temperature and some
reduction in airflow, but
limited reduction if high
humidity conditions occur
Spraying electrostatically
requires electrical isola-
tion of the entire system.
Large lines may be difficult
to convert because coating
storage areas may be
hundreds or thousands of
feet away from the
application area
-------
Affected Facility
Control Options	and Application
Waterborne (spray dip
or flow coat)
(continued)
Powder (spray or dip) Top or single coat
EXHIBIT 8-5(3)
U.S. Environmental Protection Agency
Typical Percent
Reduction	Comparison of Control Options
Dip or flow coating applica-
tion requires closer
monitoring due to its
sensitive chemistry
Weather conditions affect the
application, so flash-off
time, temperature, air
circulation and humidity
must be frequently monitored
Changes in the number of nozzles
may be required
Sludge handling may be more
difficult
95-99	No solid or liquid wastes to
dispose of
Powder may reduce energy
requirements in a spray booth
and the ovens because less
air is required than for
solvent-borne coatings and
flash-off tunnel is
eliminated
-------
Affected Facility
Control Options	and Application
Powder (spray or
dip) (continued)
High solids (spray)	Top or single coat
EXHIBIT 8-5(4)
U.S. Environmental Protection Agency
Typical Percent
Reduction
50-80a
Comparison of Control Options
Powder can be reclaimed, result-
ing in up to 98% coating
efficiency
All equipment (spray booths,
associated equipment and
often ovens) used for liquid
systems must be replaced
Powder films cannot be applied
in thicknesses of less than
2 mils and have appearance
limitations
Powder coatings may be subject
to explosions
Excessive downtime (half-hour)
is required during color
changes. If powders are not
reclaimed in their
respective colors, coating
usage efficiency drops to
50% to 60%
May be applied with existing
equipment
-------
Affected Facility
Control Options	and Application
High solids (spray)
(continued)
Carbon adsorption
Prime, single or
top coat
(application
and flash-off
areas)
EXHIBIT 8-5(5)
U.S. Environmental Protection Agency
Typical Percent
Reduction	Comparison of Control Options
Reduces energy consumption
because it requires less
airflow in the spray booth,
oven and flash-off tunnel
Potential health hazard asso-
ciated with isocyanates used
in some high-solid two-
component systems
90*5	Although it is technically
feasible, no metal
furniture facilities are
known to use carbon
adsorption
Additional energy requirements
is a possible disadvantage
Additional filtration and
scrubbing of emissions from
spray booths may be
required
There is little possibility
of reusing recovered solvents
because of the variety of
solvent mixtures
-------
Affected Facility
Control Options	and Application
Carbon adsorption
(continued)
Incineration
Prime, single or
topcoat (ovens)
EXHIBIT 8-5(6)
U.S. Environmental Protection Agency
Typical Percent
Reduction	Comparison of Control Options
Many facilities may require
dual-bed units which require
valuable plant space
Particulate and condensible
matter from volatilization
and/or degradation of resin,
occurring in baking ovens
with high temperature, could
coat a carbon bed
90^	These are less costly and more
efficient than carbon
adsorbers for the baking
ovens because the oven
exhaust temperatures are too
high for adsorption and the
high concentration of organics
in the vapor could provide
additional fuel for the
incinerator
-------
EXHIBIT 8-5(7)
U.S. Environmental Protection Agency
Control Options
Incinceration
(continued)
Affected Facility
and Application
Typical Percent
Reduction
Comparison of Control Options
Heat recovery system to reduce
fuel consumption would be
desirable and would make
application and flash-off
area usage a viable option
a.	The base case against which these percent reductions were calculated is a high organic
solvent coating which contains 25 volume percent solids and 75 percent organic solvent.
The transfer efficiencies for liquid coatings were assumed to be 80 percent for spray, 90
percent for dip or flow coat, 93 percent for powders and 99 percent for electrodeposition.
b.	This percent reduction in VOC emissions is only across the control device and does not take
into account the capture efficiency.
Source: Control of Volatile Organic Emissions from Existing Stationary Sources—Volume
II: Surface Coating of Metal Furniture, EPA-4 50/2-77-032, December 1977.
-------
8.4 COST AND VOC REDUCTION BENEFIT EVALUATIONS FOR THE
MOST LIKELY RACT ALTERNATIVES
This section presents the cost for the most likely
control systems and associated VOC reduction benefit. First
the costs for the model plant are presented, which are then
extrapolated to the statewide industry.
8.4.1 Model Plant Costs and VOC Reduction Benefits
A model plant, with two different sizes, was selected
for the surface coating of metal furniture. The model
included an electrostatic spraying line with outputs of 3
million square feet and 48 million square feet of surface
area coated per year. Assuming a one-color single-coating
line, the capital, operation and maintenance costs for the
model pilant were estimated. The cost of pretreatment
facilities, ovens and plant building was excluded from total
capital costs. The annualized cost includes coating mate-
rials, utilities, operation and labor, maintenance labor and
material and capital charges. General plant overhead cost
was excluded from the annualized cost. The estimated costs
for the model base plant and the incremental costs for the
most likely control options are presented in Exhibit 8-6 for
the electrostatic spraying lines, on the following page.
The assumptions for the cost estimates are discussed in
the RACT guidelines document (EPA-450/2-77-032). It should
be noted that the incremental costs or savings can change
significantly if the underlying assumptions are changed.
For example, for two of the facilities that use 35-40 per-
cent solids coating instead of the model plant assumption of
25 percent less savings for conversion to higher solids (70
percent) would result. The savings of $6,000 in direct
operating costs for converting from 25 percent to 70 percent
solids for Model Plant A-l becomes a $2,000 savings when
converting from 38 percent to 70 percent solids.
1.	Maintenance material and labor charges were assumed to
be approximately equal to 4 percent of the capital
cost.
2.	The capital charges were assumed to be 20.66 percent,
which includes 10 percent interest, 4 percent taxes and
insurance, and 6.66 percent depreciation based on
15-year life.
8-8
-------
EXHIBIT 8-6
U.S. Environmental Protection Agency
ESTIMATED COST OF CONTROL FOR MODEL
EXISTING ELECTROSTATIC SPRAY COATING LINES
Base
Plant
Cost
25%
Solids
Installed capital cost ($000) 255
Direct operating costs
(savings) ($000)	175
Capital charges* ($000/yr)	53
Net annualized cost (credit)
($000/yr)	228
Solvent emissions controlled
(tons/yr)	N/A
Percent emissions reduction N/A
Annulaized cost (credit) per
ton of VOC controlled ($/ton) N/A
Model Plant A-l
(3 Million Square Feet/Yr)
Incremental Costs for
Conversion
Higher
Solids Waterborne
15
(6)
3
(3)
21
86
(143)
15
5
3
8
20
80
Powder
60
17
12
29
24
97
Base
Plant
Cost
25%
Solids
Model Plant A-2
(48 Million Square Feet/Yr)
Incremental Costs for
Conversion
1,200
400 1,208
1,361
N/A
N/A
N/A
Higher
Solids Waterborne Powder
62
1,113 (81)
248	13
(68)
336
86
(202)
62
50
13
63
314
80
201
317
343
65
408
380
97
1,074
Note: 1977 dollars and short tons
1. The capital charges were assumed to be 20.66 percent, which includes 10 percent
interest, 4 percent taxes and insurance, and 6.66 percent depreciation based on
15-year life. This differs from the RACT guideline assumption of 18.6 percent.
Source: Booz, Allen & Hamilton Inc., based on Control of Volatile Organic Emissions
from Existing Stationary Sources, Volume III: Surface Coating of Metal
Furniture, EPA-450/2-77-032, December 1977.
-------
8.4.2 Extrapolation of Control Costs to the
Statewide Industry
Exhibit 8-7, on the following page, presents the extra-
polated costs for meeting RACT guidelines for VOC emission
control for surface coating of metal furniture to the state-
wide industry in Georgia. The estimates are based on the
following assumptions and methods:
The 3 plants listed in Exhibit 8-3 that emit a
measurable quantity of hydrocarbons were assumed
to require controls to comply with the RACT guide-
lines .
Based on industry interviews, as well as Booz,
Allen estimates, existing spray coating lines were
assumed to convert to high solids coating.
The capital cost of control for high solids spray
coating for two facilities was estimated by scal-
ing up the model plant A-l costs by a capacity
factor per coating line determined to be equal to:
(actual emissions/model plant .emissions)0"6
For the HON Company, the capital cost was obtained
from the manufacturer during interviews.
The incremental annual operating savings for high
solids spray coating compared to the base case was
assumed to be proportional to the amount of emis-
sions reduction and was scaled up from the model
plant costs.
The data in Exhibit 8-7 show that the control of
VOC for surface coating of metal furniture to meet the RACT
guidelines in Georgia would require a statewide capital
investment of about $264,000 and result in a statewide net
annualized savings of about $10,000. It should be recog-
nized here that the projected savings in annualized costs
may not be realized if the underlying assumptions used in
estimating the costs were changed.
The conversion to high solids coatings would result in
an energy savings due to reduced drying time. For model
plant A-l, converting from 25 percent to 70 percent solids
coating, the savings is estimated to be equivalent to 550
barrels of oil annually. For a similar plant converting
8-9
-------
EXHIBIT 8-7
U.S. Environmental Protection Agency
STATEWIDE COSTS FOR PROCESS MODIFICATIONS OF
EXISTING METAL FURNITURE COATING LINES
TO MEET RACT GUIDELINES FOR VOC EMISSION CONTROL
Projected Control Option
Characteristic	High Solids Spray
Number of plants	3
Number of process lines	7
Uncontrolled emissions (ton/yr)	365
Potential emission reduction (ton/yr)a	286
Installed capital cost ($000)c	264
Direct annual operating cost (credit)
($000) (1-3 shifts/day)	(65)
Annual capital charges (credit)
($000)c	55
Net annualized cost (credit) ($000)	(10)
Annualized cost (credit) per ton
of emission reduced ($)	(35)
a.	Based on control efficiency of 86 percent for plants converting
from 25 percent solids to 70 percent solids, and 75 percent for
plants converting from 38 percent solids to 70 percent solids.
b.	Based on cost for model plant A-l from Exhibit 8-6 and from data
provided by selected manufacturers.
c.	20.66 percent of capital cost.
Source: Booz, Allen & Hamilton Inc.
-------
from 38 percent solids to 70 percent solids, the savings is
estimated to be equivalent to 250 barrels of oil annually.
Assuming that energy savings is proportional to emissions
reduction, the savings for the state would be equivalent to
approximately 5,000 barrels of oil annually.
8-10
-------
8.5 DIRECT EONOMIC IMPACTS
This section presents the direct economic impacts of
implementing the RACT guidelines for surface coating of
metal furniture, on a statewide basis. The analysis
includes the availability of equipment and capital; feasi-
bility of the control technology; and impact on economic
indicators, such as value of shipments, unit price (assuming
full cost pass-through), state economic variables and capital
investment.
8.5.1	RACT Timing
RACT must be implemented statewide by July 1, 1982..
This implies that surface coaters of metal furniture must
have made their process modifications and be operating
within the next three years. The timing requirements of
RACT impose several requirements on metal furniture coaters:
Determine the appropriate emission control system.
Raise or allocate capital to purchase new equip-
ment or modify existing facilities.
Acquire the necessary equipment or coating mate-
rial for emission control.
Install new equipment or modify existing facili-
ties and test equipment and/or new materials to
ensure that the system complies with RACT and
provides acceptable coating quality.
The sections which follow discuss the feasibility and
the economic implications of implementing RACT within the
requirement timeframe.
8.5.2	Feasibility Issues
Technical and economic feasibility issues of implement-
ing the RACT guidelines are discussed in this section.
None of the metal furniture manufacturers potentially
affected by RACT has implemented low solvent coatings to
date. However, based on interviews with industry representa-
tives, it is predicted that these manufacturers will convert
to low solvent spray coatings in order to comply with RACT
guidelines. These coating materials may not be available in
the desired quality and the variety of colors required by
8-11
-------
the manufacturers. The development of suitable coating
materials in a variety of colors is the key to successful
implementation of RACT in the required time.
Another problem likely to be encountered by the metal
furniture manufacturers is that of excessive use of the low
solvent coatings. Experiments by one manufacturer indicate
that personnel accustomed to high solvent coatings are
likely to apply more than the desired thickness of coating,
thus using more paint. This problem could be alleviated
through training of personnel. It is also possible that the
increased demand for high solids coatings may raise the
price of these coating materials.
Unless major modifications to equipment are required,
for example, automated coating lines, the cost of conversion
to high solids coatings is not likely to have a significant
effect on the implementation of the RACT guidelines for
surface coatijig of metal furniture.
8.5.3 Comparison of Direct Cost With Selected Direct
Economic Indicators
The slight change in the annualized cost to the coaters
of metal furniture as a result of implementing RACT guide-
lines is not expected to have a significant effect on the
economic situation in the metal furniture industry in
Georgia.
The major economic impact, in terms of cost outlay, will
be capital related. For the affected industries the capital
investment for RACT implementation may represent as much as
60 percent of the normal annual capital expenditures.
1. Based on a ratio of capital expenditures to value of shipments for
metal furniture manufacturers in the South Atlantic Division, as
stated in the 1972 Census of Manufacturesy and using the 1977 value
of shipments for the three affected manufacturers in Georgia.
8-12
-------
8.6 SELECTED SECONDARY ECONOMIC IMPACTS
This section discusses the secondary impacts of imple-
menting RACT on employment, market structure, productivity,
and energy consumption.
Employment is expected to remain unchanged. Employment
would be reduced if marginally profitable facilities closed,
but the present indication from the industry is that no such
closures are anticipated.
By converting to high solids coatings, productivity
could be increased because manufacturers will be able to get
more paint on per unit volume basis and reduce paint appli-
cation time. However, the necessity of converting to air-
less guns, with slower application of coatings, could reduce
coating line speed and thereby reduce productivity for one
manufacturer.
The use of low solvent coatings by the affected manu-
facturers is expected to result in a net savings of energy
equivalent to approximately 5,000 barrels of oil per year.
* * * * *
Exhibit 8-8, on the following page, presents a summary
of the direct economic implications of implementing the
RACT guidelines for surface coating of metal furniture in
the State of Georgia.
8-13
-------
EXHIBIT 8-8
U.S. Environmental Protection Agency
•SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR SURFACE COATING OF METAL
FURNITURE IN GEORGIA
Current Situation
Number of potentially affected
facilities
Indication of relative importance
of industrial section to state
economy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC
control
Assumed method of control to meet
RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized savings (statewide)
Price
Energy
Productivity
Employment
Market structure
RACT timing requirements (1982)
Problem area
VOC emissions after RACT
Cost effectiveness of RACT
Discussion
There are 3 metal furniture
manufacturing facilities
1977 value of shipments was
between $30 million and $60
million industry-wide and
approximately $18.5 million
for three affected facilities
Trend is towards the use of a
variety of colors
365 tons per year
Low solvent coatings
Low solvent coatings
Discussion
$264,000
Up to $10,000
No major change
Savings of 5,000 equivalent barrels
of oil per year
No major impact
No major impact
No major impact
Companies using a variety of
colors may face a problem finding
suitable low solvent coatings
Low solvent coating in a variety
of colors providing acceptable
quality needs to be developed
80 tons per year (approximately
22 percent of current emissions
level)
Up to $35 annualized savings/
annual ton of VOC reduction
Source: Booz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Existing Stationary Sources, Volume
III: Surface Coating of Metal Furniture. EPA-450/2-77-032,
December 1977.
U.S. Department of Commerce, County Buiness Patterns, 1976.
U.S. Department of Commerce, Census of Manufactures, 1977.
Springborn Laboratories, Air Pollution Control Engineering
and Cost Study of General Surface Coating Industry, Second
Interim Report, Enfield, CT, August 23, 1977.
Private conversations with:
Hon Company, Cedartown, Georgia
Jelsco Inc., Warrenton, Georgia
Leggett & Piatt Inc., Atlanta, Georgia
-------
10.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
SURFACE COATING OF LARGE
APPLICANCES IN THE STATE
OF GEORGIA
-------
10.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
SURFACE COATING OF LARGE
APPLIANCES IN THE STATE
OF GEORGIA
This chapter presents a detailed analysis of the impact
of implementing RACT for surface coating of large appliances
in the State of Georgia. The chapter is divided into six
sections including:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Emissions and current controls
Cost and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic impacts.
Each section presents detailed data and findings based
on analyses of the RACT guidelines, previous studies of the
application of surface coatings on large appliances, inter-
views and analysis.
10-1
-------
10.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining
estimates of:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Cost of controlling VOC emissions
Economic impacts
for the surface coating of large appliances in Georgia.
An overall assessment of the quality of the estimates
is detailed in the latter part of this section.
10.1.1 Industry Statistics
The major appliance industry contains six major indus-
trial areas as defined by the Standard Industrial Code (SIC)
SIC Code	Description
3582	Commercial laundry
358 5	Commercial refrigeration and air
conditioning
3589	Commercial cooking and dishwashing
3631	Household cooking
3632	Household refrigerator and freezer
3633	Household laundry
3639	Household appliances, N.E.C.
(includes water heaters,
dishwashers, trash compactors)
Current Industrial Report provides detailed industry
statistical data for the major appliance industry on a national
basis. However, because of confidentiality and disclosure
problems, there is no individual data source which provides
a comprehensive analysis of the statistical data for each
individual state. Therefore, our methodology to provide
statewide major appliance statistical data was as follows:
A list of potentially affected facili-
ties was compiled from the state emission
inventory, associations and trade journals.
10-2
-------
Interviews were performed with some of
the manufacturers to validate the list
of potentially affected facilities (this
list was not 100 percent validated).
Secondary source data was collected for each
of the industry categories from sources such
as:
Sales and Marketing Management
(April 25, 1978)
1972 Census of Manufactures.
The Booz, Allen study team, utilizing all
available inputs, including interviews with
selected manufacturers, determined an esti-
mated percent of the total U.S. value of
shipments applicable to the state in each
SIC category.
10.1.2	VOC Emissions
The Georgia EPA provided a list of five appliance coaters
who might be required to meet the RACT guideline requirements.
The Booz, Allen study team interviewed these suspected emitters
to verify their inclusion in this RACT category and determined
their emission levels. Emissions were determined for one
company identified as a major emitter in this category and
subject to the RACT guidelines.
10.1.3	Processes for Controlling VOC Emissions
Processes for controlling VOC emission for the surface
coating of large appliances are described in Control of Volatile
Organic Emissions from Existing Stationary Sources—Volume V:
Surface Coating of Large Appliances, (EPA-450/2-77-034,
December 1977). Several manufacturers of large appliances and
coating application equipment were interviewed to ascertain the
most feasible types of control for organic emissions in the
coating of large appliances, and the extent of modifications
required to meet the RACT guidelines.
10-3
-------
All manufacturers interviewed agreed that, currently,
consideration was being given to meeting the present RACT dead-
lines through one modification to the existing topcoating
equipment (i.e., high solids) and through two possible alter-
natives to primecoating operations (i.e., waterborne dip
or flow coat or high solids), depending on the type of
existing equipment. Therefore, the analysis for this report
was based on these alternatives. The methodology for the
cost analysis is described in the following paragraphs.
10.1.4 Cost of Control of VOC Emissions for Surface
Coating of Large Appliances
The costs of control of volatile organic emissions for
surface coating of large appliances were developed by:
Determining the alternative types of control
systems likely to be used
Estimating the probable use of each type of control
system
Defining system components
Developing installed capital costs for modifi-
cations of existing systems
Aggregating installed capital costs for each
alternative control system
Defining a model plant
Developing costs of a control system for the
model plant:
Installed capital cost
Direct operating cost
Annual capital charges
Energy requirements
Extrapolating model costs to individual industry
sectors
Aggregating costs to the total industry for the
state.
10-4
-------
The model plant that was used as a basis for establishing
the cost of process modification to meet RACT was a solvent-
based dip (or flow coat) primecoat and a solvent-based electro-
static bell or disc topcoat. The cost of modification to water-
borne dip or flow coat primecoat and to high solids electrostatic
disc or bell topcoat was not considered to be a .function of the
type of major appliance to be coated, since no modifications to
the production lines are necessary. Modifications are required
only to the coatings handling and pumping and spraying equipment,
and these would be approximately the same whether washers, dryers
or refrigerators were being coated.
10.1.5	Economic Impacts
The economic impacts were determined by analyzing the
lead time requirements to implement RACT, assessing the
feasibility of instituting RACT controls in terms of capital
availability and equipment availability, comparing the direct
costs of RACT control to various state economic indicators and
assessing the secondary effects on market structure, employment
and productivity as a result of implementing RACT controls in
Georgia.
10.1.6	Quality of Estimates
Several sources of information were utilized in assessing
the emissions, cost and economic impact of implementing RACT
controls on the surface coating of large appliances in Georgia.
A rating scheme is presented in this section to indicate the
quality of the data available for use in this study. A rating
of "A" indicates hard data, (data that are published for the
base year), "B" indicates data that were extrapolated from hard
data and "C" indicates data that were not available in secondary
literature and were estimated based on interviews, analysis of
previous studies and best engineering judgment. Exhibit 10-1,
on the following page, rates each study output listed and the
overall quality of the data.
10-5
-------
EXHIBIT 10-1
U.S. Environmental Protection Agency
SURFACE COATING OF LARGE APPLIANCES
DATA QUALITY
B	C
A	Extrapolated Estimated
Study Outputs Hard Data	Data Data
Industry statistics	X
Emissions	X
Cost of emissions control	X
Economic impact	X
Overall quality of data	X
Source; Booz, Allen & Hamilton Inc.
-------
10.2 INDUSTRY STATISTICS
Industry statistics and business trends for the manufac-
ture and surface coating of large appliances in Georgia are
presented in this section. The discussion includes a descrip-
tion of the number of facilities, a comparision of the size
of the major appliance industry to the state economic indi-
cators, a historical characterization of the industry and an
assessment of future industry patterns. Data in this section
form the basis for assessing the impact on this industry
of implementing RACT to VOC emissions in Georgia.
10.2.1	Size of the Industry
The Georgia EPA reports and Booz, Allen interviews have
identified five companies participating in the manufacture and
coating of large appliances as shown in Exhibit 10-2, on the
following page. These companies accounted for between $50 million
and $100 million in shipments. The estimated number of employees
in 1977 was between 1,000 and 2,000. The data and the sources
of information are summarized in Exhibit 10-3, following Exhibit
10-2, and indicate that Georgia shipped an estimated 0.3 percent
to 0.7 percent of the U.S. value of shipments in the large
appliance industry.
10.2.2	Comparison of the Industry to the State Economy
A comparison of the value of shipments of large appliances
(in the SIC categories stated previously) with the state economy
indicates that the large appliance industry represents 0.1
percent to 0.4 percent of the total Georgia value of shipments
of all manufactured goods. The industry employs between
0.2 percent and 0.4 percent of all people employed in manufac-
turing in Georgia. These figures are shown in Exhibit 10-4,
following Exhibit 10-3, along with the sources of the data.
10.2.3	Historical and Future Patterns of the Industry
The shipments of major appliances have generally followed
the economic condition of the country. In the last ten years,
sales have generally increased annually, except during the
recession in 1974 and 1975. Shipments peaked in 1973 for all
major appliances.
Shipments picked up in 1976 and continued to grow in
1977. The outlook through 19 82 is a continued annual growth
of about 3 percent to 5 percent.
10-6
-------
EXHIBIT 10-2
U.S. Environmental Protection Agency
LIST OF MANUFACTURERS, POTENTIALLY AFFECTED
BY RACT GUIDELINES, WHO SURFACE COAT
LARGE APPLIANCES IN GEORGIA
Facility Name
Alsco Manufacturing Co.
Atlanta
Location
Crispaire Corp.
Cordele
Roper Corp.
Lafayette
Tappan
Dalton
Warren-Sherrer
(Division of Kysor)
Conyers
Source: Georgia EPA List of Appliance Coaters and Booz,
Allen and Hamilton Inc. interviews.
-------
EXHIBIT 10-3
U.S. Environmental Protection Agency
INDUSTRY STATISTICS—SURFACE COATING OF LARGE APPLIANCES
GEORGIA
U.S. Totals3
1977
SIC Code	RACT Category
3 582	Commercial laundry
3585	Commercial refrigeration
and air conditioning
3589	Commercial cooking
and dishwashing
3631	Household cooking
3632	Household refrigerator
and freezer
3633	Household laundry
3639	Household appliances:
Water heaters
Dishwashers
Trash compactors
Estimated
No. of Units
Shipped
(thousand)
b
b
5,000
7,300
8,500
9, 300
Estimated
Value of
Shipments
($ million)
200
9, 500
150
1,500
2,000
1, 500
800
Estimated
Percent of U.S.
Shipments
None
None
None
3-6
None
20-25
1-3
Georgia Totalsc
Estimated
Value of
Shipments
($ million)
None
Negligible
None
30-60
None
None
20-40
Es timated
No. of Units
Shipped
(thousand)
None
Negligible
None
100-200
None
None
115-240
TOTAL
15,650
0.3-0.7
50-100
215-440
a.	Current Industrial Reports, Major Household Appliances, 1977 (issued June 1978) for categories 3631, 3632, 3633 and
3639. 1972 Census of Manufactures Service Industry Machine Shops (issued March 1975 and updated to 1977) for categories
3582, 3585 and 3589. Sales and Marketing Management (April 24, 1978) for categories 3631, 3632, 3633 and 3585.
b.	Not available
Source; Booz, Allen & Hamilton Inc.
-------
EXHIBIT 10-4
U.S. Environmental Protection Agency
COMPARISON OF LARGE APPLIANCE STATISTICS WITH STATE
OF GEORGIA ECONOMIC DATA
Estimated Georgia
Economic Indicators
Estimated Percent of Georgia
Manufacturing Economy Engaged
in Large Appliance Manufacturing
Total 1977 value
of shipments of all
manufactured goods
$30 billion-$35 billion
0.1 to 0.4
Number of employees
in manufacturing
450,000-500,000
0.2 to 0 . 4
Source: Current Industrial Reports, Major Household Appliances, 1977 (issued June 1978)
for categories 3631, 3632, 3633 and 3639; 1972 Census of Manufactures
Industry Machines and Machine Shops (issued March 1975 and updated to 1977)
for categories 3582, 3585 and 3589; Sales and Marketing Management (April 25,
1977) for categories 3631, 3632, 3633 and 3585; Sales and Marketing Management,
April 24, 1978; Annual Survey of Manufactures, Statistics for States, Standard
Metropolitan Statistical Areas, Large Industrial Counties and Selected Cities,
1976; Booz, Allen & Hamilton Inc.
-------
The growth of the major appliance market will be reflected
in the growth of the housing industry and the socioeconomic
effects of the trends toward smaller families, single-person
households, higher energy costs and the like.
Historical and future growth patterns are shown in
Exhibits 10-5 and 10-6, on the following pages.
10-7
-------
EXHIBIT 10-5
U.S. Environmental Protection Agency
HISTORICAL U.S. SALES FIGURES—SELECTED MAJOR
HOUSEHOLD APPLIANCES FOR 1968-1977
Appliance Sales (Millions of Units)
Appliance	l9?ff	1969	1970	I97T	1972	1973	1974	1975	1976	1977
Washer	2.9	4.4	4.1	4.6 5.1	5.5	4.9	4.2	4.5	4.9
Dryer	2.9	3.0	2.9	3.3 3.9	4.3	3.6	2.9	3.1	3.6
Range	4.4	4.5	4.5	4.3 4.8	5.0	4.1	3.6	4.2	4.7
Dishwasher	1.9	2.1	2.1	2.5 3.2	3.7	3.3	2.7	3.1	3.4
Refrigerator	5.2	5.3	5.3	5.7 6.3	6.8	5.9	4.6	4.8	5.7
Source.- Appliance, April 1978, pp. 37-40.
-------
Appliance	1978
Washer	5.4
Dryer	4.0
Range	5.2
Dishwasher	3.7
Refrigerator	6.0
Source; Appliance, January 1978,
EXHIBIT 10-6
U.S. Environmental Protection Agency
FIVE-YEAR U.S. SALES FORECAST FOR
SELECTED MAJOR HOUSEHOLD APPLIANCES
(1978-1982)
Appliance Estimates (Millions of Units)
1979	1980	1981	1982
5.6	5.7	5.8	5.8
4.2	4.4	4.5	4.6
5.4	5.6	5.7	5.8
3.9	4.1	4.4	4.6
6.2	6.4	6.5	6.6
54-55.
-------
10.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents the process description for the prep-
aration, application and curing of surface coatings for large
appliances, estimated VOC emissions from facilities coating large
appliances in Georgia and the extent of current control in use.
10.3.1 Large Appliance Process Description
A large appliance plant typically manufactures one or two
types of appliances and contains only one or two lines. The
lines may range from 1,200 to 4,000 meters (3/4 mile to 2-1/2
miles) in length and operate at speeds of 3 to 15 meters (10
to 50 feet) per minute.
Cases, doors, lids, panels and interior parts for large
appliances are stamped from sheet metal and hung on overhead
conveyors. The parts are transported to the cleaning and pre-
treatment sections, which are typically located on the ground
floor of the plant.
Exhibit 10-7 and Exhibit 10-8, on the following pages,-
describe and illustrate the pretreatment, coating and curing
processes for a typical large appliance facility.
10-8
-------
MANUFACTURING AND PRETREATMENT
PROCESS DESClU PTION
COATING PROCESS DESCRIPTION
Large appliance plant typically manu-
facturer one or two different types of
appliances and contains only one or
two lines
Lines may range from 1,200 to
4,000 meters (3/4 to 2-1/2
miles) in length
. Lines may operate at s|>eeds of
3 to 15 meters (10 to SO feet)
per minute
Parts are transported on overhead con-
veyors
. Cleaned in an alkaline solution
. Rinsed
. Treated with zinc or iron phos-
phate
. Rinsed attain
. Treated with chromate (if
iron phosphate is used)
• Dried at J00°C to 400°C in a
gas fired oven and cooled before
coating
Exterior parts may enter a prime
preparation booth to check the pre-
treatment
. Paits can be sanded and tack-
ragged (wiped) to provide an
even finish
Prlmecoat or interior single coat
(O.'j to 1.0 mils) is applied
. Dip coating occurs in a con-
tinuously agitated tank
. Flow coating occurs in an
enclosed booth as the parts
move through on a conveyor
and are sprayed by station-
ary or oscillating nozzles
-	Parts may enter a flash-
off tunnel to allow
coating to flow out
properly
. Spray coating occurs in booths
either by automatic elecLio-
static spraying or manually
-	Flashotf of 7 minutes
to allow solvents to rise
slowly in the film to
avoid popping in the
oven
Prior to topcoating, the parts are
checked for smoothness and manually
sanded, "tack-ragged" or retouched
with a spray gun
Topcoat or exterior single coat
(direct-to-metal topcoat (1.0 to
1.S mi Is) is applied
. Usually applied by automated
electrostatic discs, bell or
other type of spray equipment
. Usually applied in many colors
. Applied in side-draft or down-
draft spray booths equipped
with watui wash and undergoes
a 10-nunute flaslioff period
Inside of many exterior large appll-
¦ ii u.e pci i I b .i i (. t. pr a ycd with I ioniI
tut' add i I i on a 1 mo J s t u i e i es I ti t am:e
.ttul toi bound dcadc-n 1 n«j
Sourcei
Control Of Volatile Organic Emissions From Existing Stationary Sources-
rt-w -	.	—	-				 -		*¦ ¦ - -¦¦¦¦' ¦ ¦
EPA-450/2-77-034, December 1977
EXHIBIT 10-7
U.S. Environmental Protection Agency
PRESENT MANUFACTURING TECHNOLOGY DESCRIPTION
TYPICAL COATINGS AND
CURING PROCESS DESCRIPTION	SOLVENTS
Coated parts are baked for about	Coatings include:
20 minutes at 1Q0OC to 230°C
(350°F to 450°F) in a multipass	. Epoxy
oven
. Epoxy-acrylie
. Acrylic or poly-
ester enamels
• Alkyd resins
Solvents include:
. Esters
. Ketones
. Aliphatics
. Alcohols
. Aromatics
. Ethers
. Terpenes
Baked for 20 to 30 minutes at
140°C to 180°C (270°F to 3S0°F>
in a multipass oven
uine Vi Surface Coatings Of Large Appliances#
-------
EXHIBIT 10-8
U.S. Environmental Protection Agency
DIAGRAM OF A LARGE APPLIANCE COATING LINE
DIRECT TO METAL TOPCOAT
Source: Contro l. Of: Volatile Organic Emissions From Existing Stationary Sources—Volume V: Surface Coating Of
l.ctrge Appliances, F.PA-<150/2-77-034, December 1077.
-------
10.4 EMISSIONS AND CURRENT CONTROLS
This section presents information on the distribution of VOC
emissions during the coating operation, the estimated VOC emis-
sions in Georgia in 1977 and the current level of emission con-
trol implemented in the state.
VOC emissions occur in three areas during the process of
coating large appliances. They are the application, flashoff and
oven areas. The percent distribution of VOC emissions by area
is as follows:
	Percent of VOC Emission	
Application	Application
Method	and Flashoff	Oven
Dip	50	50
Flow coat	60	40
Spray	80	20
The percent reduction of emissions for prime coating with
waterborne dip or flow coat operations was assumed to be 80
percent and for high solids (62 percent volume) topcoat 60
percent. An overall average of 70 percent reduction in VOC
emissions is assumed in implementation of RACT guidelines for
surface coating of large appliances.
Of the six manufacturers and coaters of large appliances
identified by the Georgia EPA and interviewed by the Booz, Allen
study team, only one company was verified as being affected by
the proposed RACT guidelines. Two companies have emission levels
below the RACT and Georgia minimum for control; two are projected
to be in compliance; and one is not considered as part of this
RACT category.
Exhibit 10-9, on the following page, shows the categoriza-
tion of five companies studied as stated above. The estimated
emissions in Georgia from the one appliance coating facility to
be controlled under RACT are 280 tons per year.
10.4.1 RACT Guidelines
The RACT guidelines for control of VOC emissions from the
surface coating of major appliances require the following:
Use of waterborne, high solids (at
least 62 percent by volume) or powder
coating to reduce VOC emissions
Use of add-on control devices, such as
incinerators or carbon adsorbers.
Exhibits 10-10, 10-11 and 10-12, following Exhibit 10-9,
summarize the RACT emission limitations and control options for
VOC emissions control for surface coating of large appliances.
10-9
-------
EXHIBIT 10-9
U.S. Environmental Protection Agency
RACT DATA SUMMARY FOR ESTIMATED VOC EMISSIONS FOR
SURFACE COATING OF LARGE APPLIANCES IN THE STATE OF GEORGIA
Facility Name
Alsco Manufacturing Co.
Current Average
Hydrocarbon
Emissions
(Ton/Year)
<2a
Potential Control
Efficiency
with RACT
(Percent)
70
Potential Emission
Reduction
	with RACT
(Ton/Year)
<2a
Crispaire Corp.
<2<
70
< 2'
Roper Corp.
Tappan*5
280
70
196
Warren-Sherrer
(Division of Kysor)
Total
280
196
a.	Emission level below EPA & Georgia minimum for RACT implementation
b.	Reported to be in compliance
Source: Georgia EPA list of potential emitters and Booz, Allen interviews
-------
EXHIBIT 10-10
U.S. Environmental Protection Agency
EMISSION LIMITATIONS FOR RACT IN THE
SURFACE COATING OF LARGE APPLIANCES
Recommended Limitations For
Low Solvent Coatings
Affected
Facility
kg solvent per liter
of coating
(minus water)	
lbs. solvent per gallon
of coating
	(minus water)
Prime, single
or topcoat
application
area, flash-
off area and
oven	0.34	2.8
Source; Control of Volatile' Organic Emissions from Existing
Stationary Sources—Volume V: Surface Coating of
Large Appliances, EPA-450/2-77-034, December 1977.
-------
EXHIBIT 10-11
U.S. Environmental Protection Ayency
SUMMARY OF APPLICAULE CONTROL TECHNOLOGY FOR
COATING OF LARGE APPLIANCE DOORS, LIDS,
PANELS, CASES AND INTERIOR PARTS
WJterborne
Source; Control f Volatile Organic Emi sl. ionn From Exliitimj Stationary Source:. — V"'uine Y; Surface Coating of I.arqe Appliances, EPA-450/2-77-034,
December 1977.
-------
Affected Facility	Typical Percent
and Application	Control Options	Reduction
Prime or interior	Waterborne	90-953
single coat	(electrodeposition,
EDP)
All applleations
Waterborne (spray
dip or flow coat)
70-90a
EXHIBIT 10-12(1)
U.S. Environmental Protection Agency
RACT CONTROL OPTIONS FOR THE
LARGE APPLIANCE INDUSTRY
Comparison of Control Options
Provides excellent coverage corrosion protec-
tion and detergent resistance
Fire hazards and potential toxicity are reduced
Dry off oven may be omitted after cleansing if
an iron-phosphate pretreatment is used
Lower energy consumption via lower ventilation
requirements
Good quality control due to fully automated
process may be offset by increased electrical
requirements for the coating, refrigeration
and circulation systems if EDP replaces
waterborne flow or dip coating operations
This would not be true if EDP replaces a
spraying operation
EDP can be expensive on small-scale production
lines
This will likely be the first option considered
because of the possibility that these
coatings can be applied essentially with
existing equipment
Requires a longer flash-off area than organic
solvent-borne coatings
Curing waterborne coatings may allow a de-
crease in oven temperature and some reduc-
tion in airflow but limited reduction if
high humidity conditions occur
-------
Affected Facility	Typical Percent
and Application	Control Options	Reduction
Top, exterior or	Powder	95-99a
interior single
coat
EXHIBIT 10-12(2)
U.S. Environmental Protection Agency
Comparison of Control Options
Spraying electrostatically requires electrical iso-
lation of the entire system. Large lines may
be difficult to convert because coating storage
areas may be hundreds or thousands of feet away
from the application area
Dip or flow coating application requires closer
monitoring due to their sensitive chemistry
Weather conditions affect the application, so both
flash-off time, temperature, air circulation and
humidity must be frequently monitored
Changes in the number of nozzles may be required
Sludge handling may be more difficult
No solid or liquid wastes to dispose of
Powder may reduce energy requirements in a spray
booth and the ovens because less air is required
than for solvent-borne coatings and flash-off
tunnel is eliminated
Powder can be reclaimed resulting in up to 98%
coating efficiency
All equipment (spray booths, associated equipment
and often ovens) used for liquid systems must be
replaced
Powder films cannot be applied in thicknesses in
less than 2 mils and have appearance limita-
tions
Powder coatings may be subject to explosions
Excessive downtime (half-hour) is required during
color changes. If powders are not reclaimed
in their respective colors, coating usacjo
efficiency drops to 50% to 60%
-------
Affected Facility	Typical Percent
and Application	Control Options	Reduction
Top or exterior single	High solids (spray)	60-80a
coat and sound
deadener
Prime, single of top	Carbon adsorption	90*3
coat application
and flash-off and
spray booths
Ovens	Incineration	90^
a.	The base case against which these percent reductions were
calculated is a high organic solvent coating which con-
tains 25 volume percent solids and 75 percent organic
solvent. The transfer efficiencies for liquid coatings
were calculated to be 00 percent, for powders about 93
percent and for electrodeposition about 99 percent.
b.	This percent reduction in VOC emissions is only across u.e
\TfiCU duvlt:e antl doua "°t take into account, the capture
11 a c x 6 n c y i
Sourcei Control Of Volatile Cirqaulc Emissions from Existing Stationary SourceB--VoIuine \
EPA-450/2-77-0J4, December 1977	~
liXIIIUIT 10-12(3)
U.S. Environmental Protection Agency
Comparison of Control Options
May be applied with existing equipment
Reduces energy consumption because it requires
less airflow in the spray booth, oven and
flash-off tunnel
Potential health hazard associated with iso-
cyanates used in some high-solid two-component
systems
Although it is technically feasible, no larger
appliance facilities are known to use carbon
adsorption
Additional energy requirements is a possible
disadvantage
Additional filtration and scrubbing of emissions
from spray booths may be required
There is little possibility of reusing recovered
solvents because of the variety of solvent
mixtures
Many facilities may require dual-bed units which
will require valuable plant space
Particulate and condensible matter from
volatilization and/or degradation of resin
occuring in baking ovens with high temperature
could coat a carbon bed
These are less costly and more efficient than
carbon adsorbers for the baking ovens because
the oven exhaust temperatures are too high for
adsorption and the high concentration of organics
in the vapor could provide additional fuel for
the incinerator
Heat recovery system to reduce fuel consumption
would be desirable and would make application
and flash-off area usage a viable option
Surface Coatinga Of Large
Appliances,
-------
10.4.2 Selection of the Most Likely RACT Alternatives
The choice of application of control alternatives, for the
reduction of hydrocarbon emissions in existing facilities for
the surface coating of large appliances, requires a line-by-line
evaluation. A number of factors must be considered, based on
the individual characteristics of the coating line to be con-
trolled. The degree of economic dislocation is a function of
these factors.
The first factor to be considered is whether the existing
equipment can be used by the substitution of a coating material
which will meet the RACT guidelines. This alternative would re-
quire the least capital expenditure and minimize production
downtime.
If the existing equipment has to be modified, replaced
or added to, factors to consider are the kind of changes that
have to be made, the capital costs, the change in operating
costs, the length of time needed to make the changes, the
effect on the production rate, the operational problems that
will have to be handled and the effect on the quality of the
product.
Interviews with industry representatives indicate a
unanimous opinion in the area of choosing the alternative(s)
for VOC emission control in coating large appliances. The
industry intends to use their existing topcoat application
equipment and modify it to handle high solids. Those companies
that use a primecoat will convert their conventional solvent
systems to either waterborne dip or flow coat or high solids
discs or bells. The alternatives are shown in Exhibit 10-13,
on the following page.
10-10
-------
EXHIBIT 10-13
U.S. Environmental Protection Agency
MOST LIKELY RACT CONTROL ALTERNATIVES FOR
SURFACE COATING OF LARGE APPLIANCES IN THE STATE
OF GEORGIA
Coat
Existing System
Most Likely Alternative Control Techniques
Prime
Dip or flow coating with
conventional solvent
Dip or flow coating with waterborne
solvent
Top
Electrostatic application
with discs or bells of
conventional solvents
Electrostatic application with
discs or bells of high solids
coatings
Preheat paint, or
Use high speed discs
or bells
Electrostatic application with
discs or bells of high solids
coating
Preheat paint, or
Use high speed discs
or bells
Source: Booz, Allen & Hamilton Inc.
-------
10.5 COST AND VOC REDUCTION BENEFIT EVALUATIONS FOR THE
MOST LIKELY RACT ALTERNATIVES
Cost for the VOC emission control systems are presented
in this section. The costs for the alternative primecoat
and topcoat applications are described individually. The
final section presents an extrapolation of typical costs for
surface coating of large appliances to the statewide industry.
10.5.1 Costs for Alternative Control Systems
Estimates of capital and annualized costs are presented
for controlling solvent emissions from application areas and
curing ovens in primecoats and topcoats of large appliances.
The process modifications involve the converting of a
solventborne primecoat or topcoat line to a coating system
which emits lesser amounts of VOC. The coating lines and
the costs for their modification are shown in Exhibit 10-14,
on the following page.
If an existing primecoat conventional-solvent-based
dip operation is converted to waterborne dip, the capital
costs cover the requirements for additional equipment for
close humidity and temperature control during flashoffs and
for changeover to materials handling system (-pumps and
piping) that can handle waterborne coatings without corrosion
related problems. Based on these assumptions, the capital
installed cost of these modifications is estimated at between
$50,000 and $75,000. No additional floor space is required, s
the capital allocated building costs remain unchanged. The
fixed costs associated with the increased capital requirements
are estimated at between $15,000 and $20,000. This includes
depreciation, interest, taxes, insurance, administration ex-
penses and maintenance materials.
For the conversion of primecoat or topcoat solvent-
based electrostatic disc or bell spray to high solids, the
cost of such conversion is based on a number of assumptions:
that the paint will have to be preheated to reduce the viscosi
prior to application, that the existing pumping system will
have to be replaced (including the installation of larger
capacity/head pumps and large diameter piping) and that high
speed (25,000 to 50,000 RPM) turbine or air drive discs or
bells will be required. Also, it is assumed that the type of
booth remains unchanged and that the existing painting configu
ration (including the proper indexing layout) requires no
change.
10-11
-------
Existing System
Most Likely
Control Alternative
Primecoat
Conventional
solvent-based
dip or flow
coat
Waterborne dip
of flow coat
Conventional
solvent-based
electrostatic
spray, disc
or bell
High solids
electrostatic
Topcoat
Conventional
solvent-based
electrostatic
spray, disc or
bell
High solids
electrostatic
Source: Booz, Allen & Hamilton, Inc.
EXHIBIT 10-14
U.S. Environmental Protection Agency
ESTIMATED COST FOR PROCESS MODIFICATION OF
EXISTING LARGE APPLIANCE COATING LINES TO MEET
RACT GUIDELINES FOR VOC EMISSION CONTROL
Major Process
Modification
Capital
Cost
Instrumentation for
close control of temp-
ature and humidity
Total repiping and
replacement of pumps
Installed capital
$50,000 - §75,000
Annualized capital
§15,000 - §20,000
Pre-heating system
Installation of high
disc or bells
Repiping for larger
line sizes and possible
coatings pump replace-
ments
Installed capital
§50,000 - §75,000
Annualized capital
§15,000 - §20,000
Major revamp of booth,
line configuration and
air handling system in
addition to changes stated
above
Installed capital
§150,000 - §250,000
Annualized capital
§37,000 - $63,000
Pre-heating system
Installation of high
speed disc or bells
Repiping for larger
line sizes and possible
coatings pump replace-
ment
Installed capital
$50,000 - $75,000
Annualized capital
$15,000 - $20,000
Major revamp of booth,
line configuration and
air handling system in
addition to changes
stated above
Installed capital
$150,000 - $250,000
Annualized capital
$37,000 - $63,000
-------
Based on these assumptions, the capital installed cost of
these modifications is estimated at between $50,000 and
$75,000. No additional floor space is required so the capital
allocated building costs remain unchanged. The fixed costs
associated with the increased capital requirements are
estimated at between $15,000 and $20,000. This includes
depreciation, interest, taxes, insurance, administration
expenses and maintenance materials.
Each paint application conversion to meet RACT has its own
unique characteristics. Where such conversions require major
changes in booth structure, paint application techniques,
and air handling system, the costs will be considerably
higher than the figures stated above. A first pass estimate
at these major changes indicates a capital requirement of
$150,000 to $250,000 per booth.
The annual operating expenses will not change appreciably
because the manpower requirements remain the same for the
two systems. There will be a minor savings in the utilities,
associated with the oven curing of the high solids coating.
This could amount to about $1 per hour of operation time
($2,000 to $6,000 per year per line (equivalent to 700 cubic
feet of natural gas/hour/line).
The overall cost of coating materials may increase slightly
even though conversion to water-based or high solids coatings
will eliminate the need for solvent thinning. This overall
increase is expected because of the anticipated price increases
in the coatings that will be required to meet the RACT guidelines.
At this time definitive numbers in change of paint prices cannot
be developed but an overall paint cost increase of between 10
percent and 20 percent may be anticipated.
10.5.2 Extrapolation to the Statewide Industry
Exhibit 10-15, on the following page, extrapolates the
costs for meeting RACT guidelines for VOC emission control
for surface coating of large appliances to the statewide industry
in Georgia. The estimates are based on the following assumptions:
All large appliance coaters will imple-
ment the control alternatives stated in
this report to comply with RACT.
The distribution of primecoat and for top-
coat applications as per industry interview
is 50 percent of the coaters topcoat only;
the other half both topcoat and primecoat
the appliances unless specific information
was available for individual facilities.
10-12
-------
EXHIBIT 10-15
U.S. Environmental Protection Agency
STATEWIDE COSTS FOR PROCESS MODIFICATIONS OF
EXISTING LARGE APPLIANCE COATING LINES
TO MEET RACT GUIDELINES FOR VOC EMISSION CONTROL
GEORGIA
Plants with Top-	Plants with Primecoat
Characteristic coat Process Only	and Topcoat Process	Total
Number of plants	-	1	1
Number of process lines	11	2
Estimated value of shipments
(§ million)	-	40-80	40-80a
Uncontrolled emissions (Ton/yr)	-	280	280
Potential emission reduction (Ton/yr)	-	196	196
Installed capital cost*3 ($ Thousand)	-	150	150
Direct annual operating cost (credit)
($ Thousand) (1-3 shifts/day)	-	(2-5)	(2-5)
Annual capital charges13 ($ Thousand)	-	38	38
Net annualized costc ($ Thousand)	-	33^-36e	33^-36e
Annual cost per ton or emission
reduced ($)	-	168 -185	168-185
d -,oce	lcod
a.	Represents estimated value of shipments of affected facility only
b.	Figures represent the upper limit of the installed capital cost, i.e., $75,000
per modification and annual capital charge of $20,000 per modification/year.
c.	Net annualized cost is the summation of the direct annual operating cost and
the annual capital charges
d.	Represents a three shift/day operation
e.	Represents a one shift/day operation
Source: Booz, Allen & Hamilton Inc.
-------
The five plants identified by the Georgia
EPA and from Booz, Allen interviews
represent the majority of all the state industry
production of large appliances.
Actual costs to large appliance coaters may vary depending
on the type of control alternative, manufacturer's equipment
and coating material selected by each manufacturing facility.
Based on the above assumptions, the total capital cost
to the industry in Georgia for process modifications to meet
RACT guidelines is estimated at approximately $150,000. The
annual cost is estimated at $168-$185 per ton of emission
controlled for facilities that both prime and topcoat.
10-13
-------
10.6 DIRECT ECONOMIC IMPACTS
This section presents the direct economic impacts of
implementing the RACT guidelines for surface coating of large
appliances on a statewide basis. The analysis includes the
availability of equipment and capital; feasibility of the con-
trol technology; and impact on economic indicators, such as
value of shipments, unit price (assuming full cost pass-through),
state economic variables and capital investment.
10.6.1	RACT Timing
RACT must be implemented statewide by January 1, 1982.
This implies that surface coaters of large appliances must have
made their process modifications and be operating within the
next three years. The timing requirements of RACT impose several
requirements on major appliance coaters:
Determine the appropriate emission control
system.
Raise or allocate capital to purchase
equipment.
Acquire the necessary equipment for emission
control.
Install and test the emission control
equipment to insure that the system complies
with RACT.
Generate sufficient income from current
operations to pay the additional annual
operating costs incurred with emission
control.
The sections which follow discuss the feasibility and the
economic implications of implementing RACT within the required
timeframe.
10.6.2	Technical Feasibility Issues
Technical and economic feasibility issues of implementing
the RACT guidelines are discussed in this section.
Two of the six major appliance manufacturers interviewed
have implemented the control alternatives discussed in this
report. One company has converted its conventional solvent
coating operation to water reducible coating.
10-14
-------
A second operation has converted to powder coating since
it is a relatively new facility and could more easily adapt
to the requirements of the powder coating option.
The equipment manufacturers interviewed have indicated
that present technology is available to handle and apply high
solids (greater than 62 volume percent solids) using electro-
static discs or bells.
The facility which will be required to meet the RACT guidelines
in Georgia is expected to convert to high solids for its single
coat (topcoat) system. The equipment manufacturers interviewed
have indicated that present technology is available to handle and
apply high solids (greater than 62 volume percent solids) using
electrostatic discs or bells but these systems have not been
commercially proven. These systems require the use of pre-heaters
and high speed application.
In addition, high solids coating material suppliers indicated
that sufficient quantities of paint would be available to meet
the expected market demand. Application equipment manufacturers
have indicated that, even with the projected demand for their
equipment, they can maintain a 10-week to 12-week delivery
schedule. However, we believe that significant delivery delay
may occur if all appliance coaters require delivery of such
equipment within the same timeframe.
10-15
-------
10.6.3	Comparison of Direct Cost with Selected Direct
Economic Indicators
The net increase in the annual operating cost to the
coater of large appliances represents approximately 0.05
percent of the industry's 1977 value of shipments manufactured
in the state. This increase may translate to an approximate
cost increase of $0.25 per unit of household appliance coated;
for the one company affected the average estimated cost of a
unit is $240.
The major economic impact in terms of cost to individual
companies will be capital related rather from increased annual
operating costs. The capital required for RACT compliance will
represent a significant amount of capital appropriations for the
companies affected.
10.6.4	Selected Secondary Economic Impacts
This section discusses the secondary impact of implementing
RACT on employment, market structure and productivity.
Employment is expected to remain unchanged. Employment would
be reduced if marginally profitable facilities closed, but the
present indication from the industry is that no such closures are
anticipated.
It appears that implementation of the RACT guidelines will
have no significant impact on the present market structure.
The major appliance industry can be characterized as being highly
competitive and manufacturers interviewed state that the regulation
may present some cost inequities to smaller and/or less profitable
production lines, i.e., direct cost increases will probably not
be passed along in the marketplace in the form of a price increase
and will further deteriorate the profit position of marginally
profitable operations.
Productivity for those coaters who are topcoating only
with high solids could be increased because they will be able
to get more paint on per unit volume and reduce paint application
time.
* * *
Exhibit 10-16, on the following page, presents a summary
of the current economic implications of implementation RACT
for surface coating of large appliances in the state of Georgia.
10-16
-------
EXHIBIT 10-16
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR SURFACE COATING OF LARGE
APPLIANCES IN THE STATE OF GEORGIA
Current Situation
Discussion
Number of potentially affected
facilities
There are five major large appliance manufacturer
and coaters, only one of which will be affected
by the guidelines
Indication of relative importance
of industrial section to state
economy
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of VOC control to
meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
RACT timing requirements (1982)
Problem area
VOC emission after RACT control
Cost effectiveness of RACT control
1977 statewide value of shipments was estimated
at $75 million and represents 0.5 percent of
the estimated $15 billion U.S. value of shipments
of the major appliance industry
280 tons per year
Waterborne primecoat and high solids topcoat
Waterborne primecoat and high solids topcoat
Discussion
$150,000
$35/000 which represents 0.05 percent of the
industry's 1977 statewide value of shipments.
Assuming a "direct cost pass-through"—increase
of $0.25/unit for household appliances (based on
an average price of $240 per unit appliance)
Reduced natural gas requirements in the curing
operation (equivalent to 800 barrels of oil
per year)
No major impact
No major impact
No major impact
Some problem meeting equipment deliveries and
installation are anticipated if equipment
vendors are overloaded with orders
Commercial application of high solids (greater
than 62% by volume) has not been proven
84 tons/year (30 percent of 1977 emission
level)
$175 annualized cost/ton VOC reduction
Source: Booz, Allen & Hamilton, Inc.
-------
BIBLIOGRAPHY
Appliance, April 1978.
Annual Survey of Manufactures, 1976.
Census of Manufactures, Industry Machines and Machine Shops,
1972.
Current Industrial Reports, Major Household Appliances, 1977.
Sales and Marketing Management, April 24,- 1978.
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Existing Stationary Sources—Volume V:
Surface Coating of Large Appliances. EPA-450/2-77-034,
December 1977.
Private conversations with:
Alsco Manufacturing Company, Atlanta, Georgia
Crispaire Corporation, Cordele, Georgia
Roper Corporation, Lafayette, Georgia
Tappan, Dalton, Georgia
Warren-Shearer, Conyers, Georgia
-------
11.0 THE ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR SOLVENT METAL CLEANING (DEGREASING) IN
THE STATE OF GEORGIA	'
-------
l'l. 0 THE ECONOMIC IMPACT OF IMPLEMENTING RACT FOR
SOLVENT METAL CLEANING (DEGREASING) IN THE
STATE OF GEORGIA
This chapter summarizes the estimated economic impact
of the implementation of reasonably available control tech-
nology for volatile organic compound emissions from solvent
metal degreasers in areas that are designated as non-
attainment in Georgia. Although there may be some facili-
ties outside the 12 county non-attainment area (facilities
with potential VOC emissions over 100 tons) requiring
control of solvent metal degreasing, for purposes of this
analysis, they are not included. Solvent metal degreasing
is the process of cleaning the surfaces of articles to
remove oil, dirt, grease and other foreign material by
immersing the article in a vaporized or liquid organic
solvent. The chapter is divided into five sections:
Specific methodology
Industry statistics
Estimated costs of RACT implementation
Direct economic impacts
Selected secondary economic impacts.
Each section presents detailed data and findings based
on analysis of the RACT guidelines; previous studies of
metal degreasing; interviews with degreaser users and with
equipment and material suppliers; and a review of pertinent
published literature.
The economic impact of RACT guidelines in the state of Georgia is
examined for non-attainment counties only. All estimates which
follow in this chapter for the state of Georgia are for the
following counties only: Clayton, Columbus, Cobb, Coweta, Dekalb,
Douglas, Fayette, Fulton, Gwinett, Henry, Paulding and Rockdale.
11-1
-------
ii.l SPECIFIC METHODOLOGY
11.1.1 Background
Solvent metal cleaning describes those processes using
nonaqueous solvents to clean and remove soils from metal
surfaces. These solvents, which are principally derived
from petroleum, include petroleum distillates, chlorinated
hydrocarbons, ketones and alcohols. Organic solvents, such
as these, can be used alone or in blends to remove water-
insoluble soils for cleaning purposes and to prepare parts
for painting, plating, repair, inspection, assembly, heat
treatment or machining.
Solvent metal cleaning can be divided into three
categories, cold cleaning, open top vapor degreasing and
conveyorized degreasing.
Cold cleaner operations include spraying, brushing,
flushing and immersion of articles in a solvent. The sol-
vent is occasionally heated but always remains well below
its boiling point.
The two basic types of cold cleaners are maintenance
cleaners and manufacturing cleaners. The maintenance cold
cleaners are usually simpler, less expensive and smaller.
They are designed principally for automative and general
plant maintenance cleaning. Manufacturing cold cleaners
usually give a higher quality of cleaning than maintenance
cleaners do, and are thus more specialized. Manufacturing
cold cleaning is generally an integral stage in metal work-
ing production. There are fewer manufacturing cold cleaners
than maintenance cleaners, but the former tend to emit more
solvent per unit because of the larger size and workload.
Manufacturing cleaners use a wide variety of solvents,
whereas maintenance cleaners use mainly petroleum solvents
such as mineral spirits (petroleum distillates and Stoddard
solvents). Some cold cleaners can serve both maintenance
and manufacturing purposes and are thus difficult to classify.
Cold cleaners are estimated to result in the largest
total emission of the three categories of degreasers be-
-cause there are so many of these units (more than 1 million
nationally) and because much of the waste solvent that is
disposed of is allowed to evaporate.
11-2
-------
Open top vapor degreasers clean only one workload at a
time. They clean through the condensation of hot solvent
vapor on colder metal parts. The condensing solvent both
dissolves oils and provides a washing action to clean the
parts. The selected solvents boil at much lower temperatures
than do the contaminants; thus, the solvent/soil mixture in
the degreaser boils to produce an essentially pure solvent
vapor. One section of the degreaser is equipped with a
heating system that uses steam, electricity or fuel combus-
tion to boil the solvent. As the solvent boils, the dense
solvent vapors displace the air within the equipment. The
upper level of these pure vapors is controlled by condenser
coils which are supplied with a coolant such as water.
Nearly all vapor degreasers are equipped with a water
separator which allows the water (being immiscible and less
dense than solvents) to separate from the solvent and decant
from the system while the solvent flows from the bottom
of the chamber back into the vapor degreaser.
The third category of degreasers is conveyorized de-
greasers. There are several types operating both with cold
and vaporized solvents. The types of conveyorized degreasers
include crossrod, rotating wheels, conveyor belts, and
monorails as well as other systems which convey the parts
through the degreasing medium.
In conveyorized equipment, most, and sometimes all,
of the manual parts handling associated with open top
vapor degreasing has been eliminated. Conveyorized de-
greasers are nearly always hooded or covered. The enclosure
of a degreaser diminishes solvent losses from the system
as the result of air movement within the plant. Conveyor-
ized degreasers are used by a broad spectrum of metal work-
ing industries but are most often found in plants where
there is enough production to provide a constant stream of
products to be degreased.
The EPA has estimated1 that about 1.3 million cold
cleaners operate in the U.S.; about 70 percent are used in
maintenance or service cleaning and 30 percent in manufac-
turing. There are also an estimated 22,200 open top vapor
degreasers and 4,000 vapor conveyorized degreasers. In
1975, estimated emissions in the United States from these
cleaners exceeded 700,000 metric tons, making solvent clean-
ing the fifth largest stationary source of organic emissions.
Control of Volatile Organic Emissions from Solvent Metal Cleaning,
EPA-450/2-77-022, November 1977.
11-3
-------
As recently as 1974, degreasing operations were exempt
from regulation in 16 states, since they rarely emitted more
than the 3,000 pounds per day of volatile organic compounds
(VOC) which was the regulatory level then in effect in these
states. They could also qualify for exemption by the sub-
stitution of a solvent not considered to be photochemically
active. However, the EPA's current direction is toward
positive reduction of all VOC emissions, and the EPA has
proposed control technology for solvent metal cleaning
operations which can achieve sizeable total VOC emission
reduction. This technology involves the use of proper
operating practices and the use of retrofit control equip-
ment.
Proper operating practices are those which minimize sol-
vent loss to the atmosphere. These include covering de-
greasing equipment whenever possible, properly using solvent
sprays, employing various means to reduce the amount of
solvent carried out of the degreaser on cleaned work,
promptly repairing leaking equipment and most important,
properly disposing of wastes containing volatile organic
solvents.
In addition to proper operating practices, many control
devices can be retrofitted to existing degreasers; however,
because of the diversity in their designs, not all de-
greasers require the same type of control devices. Small
degreasers using a room temperature solvent may require
only a cover, whereas large degreasers using boiling solvent
may require a refrigerated freeboard chiller or a carbon
adsorption system. Two types of control equipment which
will be applicable to many degreaser designs are drainage
facilities for cleaned parts and safety switches and thermo-
stats, which prevent large emissions from equipment malfunc-
tion. These controls, the types of degreasers to which they
can be applied and the expected emission reductions are de-
scribed later in this chapter.
11.1.2 Method of Estimation of the Number of Degreasers
Subsequent estimation of the economic impact of imple-
menting the proposed RACT for solvent metal cleaning is
based upon a determination of the number of solvent metal
cleaners in the state. This determination was made on the
basis of a detailed industrywide study of metal degreasing
in the U.S., conducted by the Dow Chemical Company under
contract to the EPA. The results of the study are reported
in: Study to Support New Source Performance Standards for
Solvent Metal Cleaning Operations, Contract No. 68-02-1329,
June 30, 1976.
11-4
-------
The report was based on a telephone survey of more than
2,500 plants in the metal working industry (SIC groups 25,
33, 34, 35, 36, 37, 38 and 39) with more than 19 employees.
The report presents estimates of the:
Percentage of U.S. plants using solvent degreasing
Percentage of plants using cold cleaners, open
top vapor degreasers or conveyorized cleaners
Average number and type of vapor degreasers used
in these plants
Distribution of these quantities by region.
All of these quantities are further identified by the
eight metal working industries. In the report (based on
the 1972 Census of Manufactures) 15,294 open top and
2,796 conveyorized vapor degreasers were estimated to be
in use in the eight SIC groups; an additional 5,000 to
7,000 open top degreasers were estimated1 to be in use in
1972 in manufacturing or service firms not included in one
of the eight SIC groups or in firms with less than 20
employees.
To determine the number of open top and conveyorized
vapor metal degreasers in the 12 non-attainment areas,
first the number of plants with more than 19 employees in
each of the eight SIC groups was determined. The average
number of plants using solvent metal degreasing and the
average number and type of cleaners used per plant were
then obtained by using the factors presented in the Dow
report. The results of these calculations and the factors
used are tabulated in Exhibit 11-1, in section 11.2. The
total number of open top degreasers was then estimated by
multiplying the number expected to be used in the eight
metal working SIC groups by the ratio of 22,200/15,200 (the
ratio of total open top units in the U.S. to those used in
the eight SIC groups in the U.S.).
Because of their expense and function, conveyorized
vapor degreasing units are most likely to be used in
Interviews with Parker Johnson, Vice President, Sales, Baron-
Blakeslee Corp., Cicero, Illinois and with Richard Clement,
Sales Manager, Detrex Chemical, Detroit, Michigan, July 1978.
11-5
-------
manufacturing only. Therefore, the total number of these
units in the 12 county non-attainment area was assumed
to be the same as that calculated for the eight SIC metal
working industries. The total number of conveyorized
cleaners, vapor and cold, was then determined by multi-
plying the number of vapor conveyorized cleaners by 100/85,
the.EPA1 estimated ratio of total conveyorized cleaners
to vapor conveyorized cleaners in the U.S.
The number of cold cleaners in the 12 county non-
attainment area was based on the Dow estimates of cold
cleaning done in plants in the eight SIC metal working
industries and the EPA estimate of 1,300,000 cold metal
cleaners in the U.S., which include 390,000 in manu-
facturing use and 910,000 in maintenance or service use.2
Then:
The EPA estimates of all cold cleaners in manu-
facturing use in the U.S. were multiplied by
the ratio of the number of plants in the metal
working industries (SICs 25 and 33-39) in the
non-attainment counties to the number in the U.S.
The EPA estimates of all cold cleaners in main-
tenance and service use in the U.S. were multi-
plied by the ratio of the number of plants in
the metal working industries plus selected ser-
vice industries (SIC codes 551, 554, 557, 7538,
7539, 7964) for the affected areas to the number
in the U.S. These service industries are expected
to have at least one or more cold cleaners.
SIC 551 applies to industries categorized
as new or used car dealers.
SIC 554 applies to industries categorized
as gasoline service stations.
SIC 557 applies to industries categorized
as motorcycle dealers.
Control of Volatile Organic Emissions from Solvent Metal Cleaning,
EPA-450/2-77-022, November 1977.
Cold cleaners in manufacturing use are meant to include only
those cleaners employed in the manufacturing process; cold
cleaners in maintenance and service use are those employed for
this purpose by either manufacturing or service establishments.
11-6
-------
SIC 7538 applies to industries categorized
as general automotive repair shops.
SIC 7539 applies to industries categorized
as automotive repair shops, n.e.c.
SIC 7964 applies to industries categorized
as armature rewinding shops.
The estimates of the total number of cold cleaners in
the affected state obtained by these calculations are tabu
lated in Exhibit 11-2.
11.1.3 Method of Estimation of Affected Degreasers
The RACT guidelines propose several exemptions for de
greasers based on size, type of solvent used or emission
rate.
The RACT guidelines apply to cleaners with
emissions over 15 pounds in any one day or 3
pounds in any one hour whichever is greater. It
has been estimated1 that about 70 percent of
cold cleaners would have VOC emissions less than
this and would not be affected.
Cleaners used exclusively for chemical or physical
analysis or determination of product quality and
acceptance are to be exempt. Since few such
cleaners exist, no correction was made to the
estimated number of cleaners used in determining
the estimated compliance costs.
Those cleaners using 1,1,1-trichloroethane and tri-
chlorotrifluoroethane are to be exempt. Estimates
of the number of open top degreasers which use
either of these solvents range from 35 percent
to 60 percent.2 For the purpose of calculating
Interview with Safety-Kleen Co., Gray-Mills Co. and Xleer-Flo Co.
personnel; these firms are manufacturers of cold solvent metal
degreasing equipment.
Based on information in EPA 450/2-77-022, op. cit., and inter-
views with Baron-Blakeslee and Detrex Chemical personnel.
11-7.
-------
cost impacts in this study, 35 percent was used.
About 10 percent of conveyorized cleaners are
expected to be exempt1 and about 20 percent of
cold cleaners.2
Open top vapor degreasers with less than one
square meter (10.8 square feet) air/vapor inter-
face and conveyorized degreasers with less than
two square meters (21.6 square feet) are to be
exempt. This exemption applies to about 30 per-
cent of open top cleaners and 5 percent of convey-
orized degreasers.1
The guidelines leave open to the degreaser user the option
of changing from a nonexempt solvent to an exempt one. In
most cases, this will require some modification of the de-
greaser and an additional expense for the modification. In
this study it was assumed that no substitution is made.
No reliable information has been found which relates
size of cleaner with solvent composition. Therefore, we
have assumed a uniform distribution of solvent composition
with cleaner size, i.e., the number of small cleaners using
exempt solvents is the same as the number of large cleaners
using exempt solvents. For instance, the total of affected
open top vapor degreasers in the state was determined by
multiplying the total number of open top vapor degreasers
in the state by the fractions that are nonexempt by solvent
use and by size, i.e.:
Number exempt by size = (Total number of open top
degreasers) x (Fraction exempt by size, 0.3)
Number exempt by solvent = (Total number of open
top degreasers - number exempt by size) x
(Fraction exempt by solvent, 0.35)
Total number of affected (nonexempt) degreasers =
(Total number of open top degreasers) - (Number
exempt by size) - (Number exempt by solvent)
Based oa information in EPA 450/2-77-022, op. cit., and inter-
views with Baron-Blakeslee and Detrex Chemical personnel.
Dow report, op. cit.
11-8
-------
The resulting estimate of the total number of degreasers
in the state and those exempt from the proposed regulations
by size and solvent composition are summarized in Exhibit
11-3, in section 11.2.
11.1.4 Method of Estimation of Number and Type of Retro-
fitted Controls Needed
The proposed regulations specify certain controls which
can be retrofitted to existing solvent metal cleaners.
These are discussed in detail in a later section of this
chapter. Briefly they are:
For affected cold cleaners--
A cover must be installed when the solvent
used has a volatility greater than 15 milli-
meters of mercury at 38°C, or is agitated,
or the solvent is heated; and
An internal drainage facility (or, where
that is not possible, an external closed
drainage facility) must be installed, such
that the cleaned parts drain while covered
when the solvent used has a volatility greater
than 32 millimeters of mercury at 38°C; and
Where the solvent has a volatility greater
than 32 millimeters of mercury at 38°C, a
freeboard must be installed that gives a
freeboard ratio (i.e., distance from cleaner
top to solvent surface divided by cleaner
width) greater than or equal to 0.7; or a
water cover where the solvent is heavier and
immiscible or unreactive with water; or some
other system of equivalent control.
For affected open top vapor degreasers—
The vapor degreaser must be equipped with
a cover; and
A spray safety switch must be installed
which shuts off the spray pump when the
vapor level drops more than 4 inches; and
11-9
-------
If the freeboard ratio is greater than 0.75,
a powered cover must be installed or a re-
frigerated chiller; or an enclosure in which
a cover or door opens only when the dry part
is entering or exiting the degreaser; or a
carbon adsorption system; or an equivalent
control system.
For affected conveyorized degreasers—
A refrigerated chiller; or carbon adsorption
system; or another equivalent control system
must be installed; and
The cleaner must be equipped with a drying
tunnel or rotating basket to prevent cleaned
parts from carrying out solvent; and
A condenser flow switch and thermostat, a
spray safety switch and a vapor high level
control thermostat must be installed; and
Openings must be minimized during operation
so that entrances and exits silhouette work-
loads; and
Downtime covers must be provided for closing
off the entrance and exit during shutdown
hours.
Exhibits 11-14, 11-15 and 11-16, of this chapter, summarize
estimates of the percentage of non-exempt cleaners needing
these controls. Equipment manufacturers were the primary
source of the percentages used. In applying this informa-
tion, it was assumed that the number and type of control
needed were independent of size.
11.1.5 Method of Estimation of Current Emissions and
Expected Reductions
Current VOC emissions from solvent metal degreasing
and the reductions anticipated by the enforcement of the
proposed regulations are based on information presented in
Control of Volatile Organic Emissions from Solvent Metal
Cleaning, EPA-450/2-77-022, November 1977. This report
estimates average emissions for each type of degreaser.
The total current emissions were obtained by multiplying
these estimated average emissions by the number of each
type of degreaser in the affected areas of the state.
11-10
-------
The report also estimates the reduction in emissions
possible by implementation of various types of controls.
The methods proposed in recent EPA guidance can result in
reduction of 50 percent to 69 percent for various types of
degreasers. Emission levels which would result from imple-
mentation of the RACT proposals for solvent metal cleaners
was obtained by use of these estimated reductions for the
number of affected cleaners in the state. For purposes of
estimation, a 50 percent reduction was used for cold cleaners.
For open top vapor and conveyorized cleaners, a 60 percent
reduction was used.
11.1.6 Method of Estimation of Compliance Costs
Compliance costs also were based primarily on the cost
data presented in the EPA report, Control of Volatile
Organic Emissions from Solvent Metal Cleaning, for average-
sized, cold, open top vapor and conveyorized cleaners.
These cost data, however, were verified by discussions with
equipment manufacturers. Where some costs, such as for
safety switches or downtime covers, were not estimated in
the report, estimates were made based on further discussions
with equipment manufacturers. In the EPA report, costs were
presented for various retrofit control options; in each case
the control which would provide minimum net annualized costs
was used in the estimates made here. Other costs not pre-
sented in the EPA report were determined as follows:
Safety switches, minimizing conveyorized cleaner
openings, and downtime cover capital costs were
estimated on the basis of discussions with equip-
ment manufacturers. Costs used were:
$275 per manual cover and $100 per safety
switch installation for open top vapor de-
greasers
$250 per safety switch installation, $300
per downtime cover installation, $2,500 per
drying tunnel, and $1,000 for reducing
openings for conveyorized cleaners.
$300 was used as an average cost for increasing
freeboard of cold cleaners using high volatility
solvents.
11-11
-------
Annual capital charges were estimated as 25 percent
of capital costs, to include depreciation, interest,
maintenance, insurance and administrative costs.
Labor costs for mounting downtime covers on con-
veyorized cleaners at shift end were estimated at
$1,500 per year per cleaner.
Additional costs which might result from decreased
productivity, labeling and other requirements of
the proposed regulations were assumed to be small
and negligible.
11-12
-------
11.1.7 Quality of Estimates
Several sources of information were utilized in asses-
sing the emissions, direct compliance cost and economic
impact of implementing RACT controls on plants using solvent
metal degreasers in Georgia. A rating scheme is presented
in this section to indicate the quality of the data avail-
able for use in this study. A rating of "A" indicates hard
data, "B" indicates data that was not available in secondary
literature and was extrapolated from hard data (i.e. data
that is published for the base year) and "C" indicates data
was estimated based on interviews, analyses of previous
studies and best engineering judgement. Exhibit 11-1A,
on the following page, rates each study output and over-
all quality of the data.
11-13
-------
EXHIBIT 11-1A
U.S. Environmental Protection Agency
DATA QUALITY
ABC
"Hard "Extrapolated "Estimated
Study Outputs	 Data" 	Data"	Data"
Industry statistics	X	X
Emissions
Cost of emissions
control
Statewide costs of
emissions
Overall quality of
data
Source: Booz, Allen & Hamilton Inc.
11-14
-------
11.2 INDUSTRY STATISTICS
This section summarizes an estimation of the total
number of solvent metal cleaners affected in the state
determined by the methods discussed in section 11.1.2 of
this report. These estimates include only the 12 county
non-attainment areas of Georgia. Additionally the proposed
regulations would apply to solvent metal cleaning opera-
tions in the state if the potential VOC emissions from the
facility are over 100 tons annually. Although no facilities
were identified from State Emission Inventory with VOC emmis-
sions over 100 tons from Solvent Metal Cleaning operations,
there may be a few facilities affected in the state outside
the 12 county area studied. As shown in Exhibits 11-1 and
11-2, on the following pages, a total of 96 open top vapor
degreasers, 24 conveyorized degreasers and 9,185 cold
cleaners are estimated to be in use in Georgia in manufac-
turing, maintenance or service. As discussed earlier, not
all of these will be subject to RACT regulations because
of size or solvent exemptions. About 30 percent of open
top vapor degreasers, 5 percent of conveyorized degreasers
and 70 percent of cold cleaners are expected to be exempt
on the basis of size. About 35 percent of open top vapor
degreasers, 10 percent of conveyorized degreasers and 20
percent of cold cleaners are expected to be exempt because
they use exempt solvents 1,1,1-trichloroethane or Freon 113.
Applying these factors results in the total of affected
cleaners shown in Exhibit 11-3, following Exhibit 11-2.
It is difficult to estimate the number of establish-
ments affected by the regulations, since a plant may have
one or many cleaners of each type. In fact, large-scale
users may have more than 100 degreasing operations in one
plant location. Metal working industries would be major
users; eight SIC codes, 25 and 33-39, cover these indus-
tries .
These classifications include such industries as auto-
motive, electronics, appliances, furniture, jewelry, plumb-
ing, aircraft, refrigeration, business machinery and fast-
eners. However, use of solvent cleaning is not limited to
those industries, since many cleaners are used, for both
manufacturing and maintenance, in nonmetal working industries
such as printing, chemicals, plastics, rubber, textiles,
paper and electric power. Also, most automotive, railroad,
bus, aircraft, truck and electric motor repair stations use
metal solvent cleaners at least part time.
11-15
-------
Item
25
Metal
Furniture
33
Primary
Metals
34
Fabricated
Products
Number of Georgia
plants with more
than 19 employees
Percent of U.S.
plants using sol-
vent degreasmg
Percent of Georgia
plants using sol-
vent degreasing
Number of Georgia
plants using sol-
vent degreasing
Percent of U.S.
plants using vapor
degreasing
Percent of Georgia
plants using vapor
degreasing
Number of Georgia
plants using vapor
degreasing
Average number of
vapor degreasers
per U.S. plant
Average number of
vapor degreasers
per Georgia plant
Number of Vapor de-
greasers in Geor-
gia
Percent in U.S. as
open top de-
greasers
31	20	80
46	40	42
44	38	40
14	8	32
48	42	41
40	35	34
6	3	11
1.98	2.21	1.62
1.76	1.96	1.44
11	6	16
73	79	79
EXHIBIT 11-1 (1)
U.S. Environmental Protection Agency
ESTIMATED NUMBER OF VAPOR DEGREASERS
IN GEORGIA8
IN 12 COUNTY NON-ATTAINMENT AREA OF GEORGIA0
SIC GROUP
35	36	37	38	39
Nonelectri- Electrical Transptn.	Instruments Misc.
cal Machinery Equipment Equipment and Clocks Industry Total
63	33	24	11	25 287
52	55	50	65	39
50	53	48	62	37
32	17	12	7	9	131
33	67	43	62	56
27	55	36	51	46
9	9	4	4	4 50
1.61	2.03	3.25	2.27	1.02
1.43	1.80	2.88	2.01	0.90
13	16	12	8	4 G6
81	87	87	94	89
-------
EXHIBIT 11-2
U.S. Environmental Protection Agency
ESTIMATED NUMBER OF COLD CLEANERS
IN 12 COUNTY NON-ATTAINMENT AREA OF GEORGIA
Total number of plants in SIC Groups
25,33,34,35,36,37,38,39a
Estimated numbejr of cold cleaners in
manufacturing
Total number of plants in service
industries SIC 551,554,557,7538,7 539,7964'
Estimated number of cold cleanerg
in maintenance and service use '
Estimated total number of cold cleaners3
U.S.
125,271
390,000
227,350
910,000
1,300,000
Georgia
765
2, 382
1,871
6,803
9,185
Notes:
a.	Source: 1976 County Business Patterns, U.S. Department of Commerce, 1976.
b.	Source: Control of Volatile Organic Emissions From Solvent Metal Cleaning, EPA-450/2-77-022,
November 1977.
c.	This includes cold cleaners in maintenance and service applications in both manufacturing
and repair firms.
Source: Booz, Allen & Hamilton, Inc.
-------
Exemption
Total number of
cleaners
Number exempt by
size
Number affected
by size
Number further
exempted by type
of solvent used
Total number of
affected cleaners
EXHIBIT 11-3
U.S. Environmental Protection Agency
ESTIMATE OF AFFECTED SOLVENT METAL
CLEANERS IN GEORGIA
(12 County Non-Attainment Area)
Number of Cleaners by Type
Cold	Open Top Vapor	Conveyorized
9,185	96	24
6,430	29	1
2,755	67	23
551	10	2
2,204	57	21
Source: Booz, Allen & Hamilton Inc.
-------
As shown in Exhibit 11-1, 131 establishments in the SIC
codes 25 and 33-39, with more than 19 employees, are esti-
mated to use solvent metal decreasing. However, as shown in
Exhibit 11-2, following Exhibit 11-1, there are a total of
765 plants in SIC groups 25 and 33-39 and an additional
1,875 plants in service industries; all of these are ex-
pected to have some type of solvent degreasers and could be
potentially affected.
11-16
-------
11.2.1 Proposed Emission Control Systems for Solvent
Metal Cleaners
The EPA has proposed two different emission control
methods, A and B, for each of the three types of cleaners:
cold, open top vapor and conveyorized. The control methods
can be combined in various ways to form a number of alter-
native control systems. Generally, control system A con-
sists of proper operating practices and simple, inexpensive
control equipment. Control system B consists of system A
plus other devices that increase the effectiveness of con-
trol. Elements of control systems A or B can be modified
to arrive at the level of control needed. The control sys-
tems are presented in the three exhibits, Exhibit 11-4,
5 and 6, on the following pages, and are briefly discussed
below. In general, use of control system B has been proposed
to maximize emission reductions.
11.2.1.1 Cold Cleaning Control Systems
The most important emission control for cold cleaners
is the control of waste solvent. The waste solvent needs
to be reclaimed or disposed of so that a minimum evaporates
into the atmosphere. Next in importance are the operating
practices of closing the cover and draining cleaned parts.
Several other control techniques become significant only
in a small fraction of applications.
The difference in effect between systems A and B
(Exhibit 11-4) is not large because most of the cold cleaning
emissions are controlled in system A. If the requirements
of system A were followed conscientiously by nearly all of
the cold cleaning operators, there would be little need
for the additional system B requirements. However, because
cold cleaning operators tend to be lax in keeping the cover
closed, equipment requirements #1 and #4 in system B are
added. Similarly, the modifications for #2 and the equip-
ment requirements in #3 would effect significant emission
reductions in a few applications.
The effectiveness of the control systems depends
greatly on the quality of operation. On the average, system
A is estimated to be able to reduce cold cleaning emissions
by 50 (± 20) percent and system B may reduce it by 53
(± 20) percent. The low end of the range represents the
emission reduction projected for poor compliance, and the
high end represents excellent compliance. The expected
benefit from system B is only slightly better than that for
11-17
-------
EXHIBIT 11-5(1)
U.S. Environmental Protection Agency
EPA PROPOSED CONTROL SYSTEMS FOR OPEN TOP VAPOR DEGREASERS
Control System A
Control Equipment:
lo	Cover that can be opened and closed easily without disturbing the vapor zone„
Operating Requirements:
lo	Keep cover closed at all times except when processing work loads through the degreaser0
2„	Minimize solvent carry-out by the following measures:
aQ	Rack parts to allow full drainage.,
b.	Move parts in and out of the degreaser at less than 3,3 m/sec (11 ft/min)»
cQ	Degrease the work load in the vapor zone at least 30 sec0 or until condensation ceases,
d.	Tip out any pools of solvent on the cleaned parts before removal*
ec	Allow parts to dry within the degreaser for at least 15 sec0 or until visually dryc
3U	Do not degrease porous or absorbent materials, such as cloth, leather, wood or rope0
40	Work loads should not occupy more than half of the degroaser's open top area0
5„	The vapor level should not drop more than 10 cm (4 in) when the work load enters the vapor zone*
6,	Never spray above the vapor level.
7,	Repair solvent leaks immediately, or shut down the degreaser*,
8,	Do not dispose of waste solvent or transfer it to another party such that greater than 20 percent of the
waste (by weight) will evaporate into the atmosphere. Store waste solvent only in closed containers.
9„	Exhaust ventilation should not exceed 20 m^/min per (65 cfm per ft^) of degreaser open area, unless
necessary to meet OSHA requirements. Ventilation fans should not be near the degreaser opening.
10.	Water should not be visually detectable in solvent exiting the water separator*
Control System B
Control Equipment:
lu	Cover (same as in system A) «,
20	Safety switches
au	Condenser flow switch and thermostat - (shuts off sump heat if condenser coolant is either not circulating
or too warm).
bu	Spray safety switch - shuts off spray pump if the vapor level drops excessively, about 10 cm (4 in).
-------
EXHIBIT 11-5 (2)
U.S. Environmental Protection Agency
3.	Major Control Device:
Either: a. Freeboard ratio greater than or equal to 0.75, and if the degreaser opening is
lm2 (10 ft2) , the cover must be powered,
b.	Refrigerated chiller,
c.	Enclosed design (cover or door opens only when the dry part is actually entering or
exiting the degreaser),
d.	Carbon adsorption system, with ventilation 15 m3/min per m2 (50 cfm/ft2) or air/vapor
area (when cover is open), and exhausting 25 ppm solvent averaged over one complete adsorption cycle, or
e.	Control system, demonstrated to have control efficiency, equivalent to or better than
any of the above.
4.	Permanent, conspicuous label, summarizing operating procedures #1 to #6.
Operating Requirements:
Same as in System A.
Source: EPA-450/2-77-022, op. cit.
-------
system A for an average cold cleaner because the additional
devices required in system B generally control only bath
evaporation, about 20 to 30 percent of the total emission
from an average cold cleaner. For cold cleaners with high
volatility solvents, bath evaporation may contribute about
50 percent of the total emission; EPA estimates that system
B could achieve 69 (± 20) percent control efficiency, whereas
system A might achieve only 55 (± 20) percent.
11.2.1.2 Open Top Vapor Degreasing Control Systems
The basic elements of a control system for open top
vapor degreasers are proper operating practices and use
of control equipment. There are about ten main operating
practices. The control equipment includes a cover, safety
switches and a major control device, either high freeboard,
refrigerated chiller, enclosed design or carbon adsorption
as outlined in Exhibit 11-5.
A vapor level thermostat is not included because it
is already required by OSHA on "open surface vapor de-
greasing tanks." Sump thermostats and solvent level controls
are used primarily to prevent solvent degradation and pro-
tect the equipment and thus are also not included here.
The emission reduction by these controls is a secondary
effect in any event. The two safety switches serve pri-
marily to reduce vapor solvent emissions.
EPA estimates that system A may reduce open top vapor
degreasing emissions by 45 (± 15) percent, and system B
by 60 (± 15) percent. For an average-sized open top vapor
degreaser, systems A and B would reduce emissions from 9.5 m
tons/year down to about 5.0 and 3.8 m tons/year, respec-
tively. It is clear that system B is appreciably more effec-
tive than system A.
11.2.1.3 Conveyorized Degreasing Control Systems
Control devices tend to work most effectively on con-
veyorized degreasers, mainly because they are enclosed.
Since these control devices can usually result in solvent
savings, they often will net an annualized profit. Two
control systems for conveyorized .degreasers as recommended
by EPA are in Exhibit 11-6. Control system A requires only
proper operating procedures which can be implemented, in
most cases, without large capital expenditures. Control
system B, on the other hand, requires a major control device.
11-18
-------
Major control devices can provide effective and econom-
ical control for conveyorized degreasers. A refrigerated
chiller will tend to have a high control efficiency, be-
cause room drafts generally do not disturb the cold air
blanket. A carbon adsorber also tends to yield a high con-
trol efficiency, because collection systems are more effec-
tive and inlet streams contain higher solvent concentrations
for conveyorized degreasers than for open top vapor degreasers.
11.2.2 Emissions and Expected Emission Reduction
In Exhibit II-7, on the following page, are summarized
the average emissions from solvent metal degreasers by type
and also the percent emission reduction expected by imple-
mentation of Type B method of controls on nonexempt de-
greasers. The levels are based on estimated emissions as
presented in the previously referenced EPA report (EPA
450/2-77-022) and represent current average emission levels
and expected reductions achievable if emission controls are
rigorously enforced. For estimation, 50 percent reduction
was used for cold cleaners and 60 percent for open top vapor
and conveyorized degreasers.
Exhibit 11-8, following Exhibit 11-7, presents the
estimated current emissions from solvent metal degreasing
and the expected emissions if the B methods of control are
implemented for metal cleaners and proposed exemptions for
size and type of solvent are implemented. As shown, emis-
sions are expected to be reduced from about 4,800 short tons
per year to a total of 3,700 short tons per year. The major
portion of these reduced emissions, 2,822 tons, are from
solvent metal cleaners exempt from the proposed RACT regu-
lations either by size or by the nature of solvent used.
Implementation of the regulations will reduce emissions by
1,100 tons per year (4,800-3,700).
11-19
-------
EXHIBIT 11-7
U.S. Environmental Protection Agency
AVERAGE UNIT EMISSION RATES AND EXPECTED
EMISSION REDUCTIONS
EMISSION RATES WITHOUT CONTROLS
Averaged Emission Rate
Type of Degreaser	Per Unit (short tons/yr.)
Cold cleaners, batch a	0.33
Open top vapor degreaser	11.00
Conveyorized degreaser	29.70
PERCENT EMISSION REDUCTION EXPECTED WITH TYPE B CONTROLS
Type of Degreaser	Percent Emission
Reduction Expected
Cold cleaner, batch
Low volatility solvents
53
( +
20)
High volatility solvents
69
( +
20)
Open top vapor degreaser
60
( +
15)
Conveyorized degreaser
60
( +
15)
a. Does not include emissions from conveyorized-type cold cleaners
which represent about 15 percent of all conveyorized cleaners.
Source: EPA-450/2-77-022, op. cit.
-------
EXHIBIT 11-8
U.S. Environmental Protection Agency
ESTIMATED CURRENT AND REDUCED EMISSIONS FROM
SOLVENT METAL CLEANING IN GEORGIA
(12 County Non-Attainment Area)b
Type of Cleaner
Estimated
Current
Emissions
Estimated
Emissions From
tfonexempt Cleaners
After RACT
Estimated
Emissions From
Exempt Cleaners
After RACTa
Estimated
Total
Emissions
After RACTa
Open top vapor
1, 056
250
429
679
Conveyorized
713
249
89
338
Cold
3, 031
364
2, 304
2, 668
Total
4, 800
863
2,822
3, 685
a. Includes emissions from cleaners
Source: Booz, Allen & Hamilton Inc.
exempt by size or using 1,1,1-trichloroethane or Freon 113
-------
11.3 ESTIMATED COSTS OF RACT IMPLEMENTATION
As discussed in Section 11.1.6 compliance costs are
based upon EPA estimates of the costs and benefits of various
retrofitted methods of control. These estimates are summar-
ized in Exhibits 11-9 and 11-10, on the following pages.
Costs of implementation of the RACT regulations are
summarized in Exhibits 11-11, 11-12 and 11-13 on the
assumption that control methods B are used to maximize
emission reduction on nonexempt cleaners. Exhibits 11-14,
11-15, and 11-16 summarize the number and type of controls
needed by cleaner type as determined from interviews with
cleaner manufacturers. Total expenditures for all cleaners,
vapor and cold types, are estimated to be about $1.1 million
in capital and about $0.14 million in net annualized costs.
The low net annualized costs result primarily from the
savings in solvent use which the regulations are expected to
provide.
In no case are the regulations expected to present a
severe financial burden to individual firms. The largest
single expenditure would be for retrofitting a monorail
conveyorized degreaser with chiller, switches, drying
tunnel, reduced openings and downtime covers. Total cost
for an average-sized degreaser of about 3.8 square meters
area (40.9 ft2) would be less than $12,500. A large unit,
14 square meters, would cost about $27,000 to $30,000.
Since these conveyorized systems would only be used in
large plants with large sales volumes, this implementation
cost is not expected to present a hardship to any par-
ticular firm.
11-20
-------
EXHIBIT 11-9
U.S. Environmental Protection Agency
CONTROL COSTS FOR COLD CLEANER
WITH 5.25 ft.2 AREA
Item
Low Volatility
Solvent^
High Volatility
Solvent*3
Installed capital ($)
25.00
365.00
Direct operating costs ($/yr.)
Capital related charges ($/yr.)c
Solvent cost (credit) ($/yr.)
(4.80)
1.00
4. 30
(39.36)
91. 25
2.6
Annualized cost (credit) ($/yr.)
0.50
54.49
a.	Costs include only a drainage facility for low volatility solvents.
b.	Includes $65 for drainage facility, a mechanically assisted cover,
and $300 for extension of freeboard.
c.	Capital charges used in study estimate were 25 percent of capital
instead of 17 percent used in EPA report.
Source: EPA-450/2-77-022, op. cit.
-------
EXHIBIT 11-10
U.S. Environmental Protection Agency
CONTROL COSTS FOR AVERAGE-SIZED
OPEN TOP VAPOR AND CONVEYORIZED CLEANERS
1. CONTROL COSTS FOR TYPICAL SIZE OPEN TOP VAPOR DEGREASER
(Vapor to Air Area of 1.67 m^)
Manual	Carbon	Refrigerated Extended Freeboard
Control Technique	Cover	Adsorption5	Chiller	& Powered Cover
Installed capital ($)	300	10,300	6,500	8,000
Direct operating	10	451	259	100
cost ($/yr.)
Capital related charges
($/vr.)	75	2,575	1,625	2,000
Solvent cost (credit)	(860)	(1,419)	(1,290)	(1,161)
($/yr.)
Net annualized cost	(775)	1,607	594	939
(credit) ($/yr.)
2. CONTROL COSTS FOR TYPICAL CONVEYORIZED DEGREASERS
(Vapor to Air Vapor Area of 3.8 m^)
Monorail Degreaser
Carbona
Adsorber
Control Technique
Installed capital ($) 17,600
Direct operating	970
costs ($/yr.)
Capital related charges
(v"/yr.)
Capital charges ($/yr.) 4,400
Solvent cost (credit) (5,633)
($/yr.)
Annualized cost (credit) (263)
($/yr.)
Refrigerated
Chiller
3,550
430
2,138
(5 ,633)
( 3, 065)
Crossrod Degreaser	
Carbona	Refrigerated
Adsorber	Chiller
17,600
754
4,400
(2,258)
2,896
7,460
334
1,865
(2,258)
(59)
a.	Not used in cost estimates since net annualized costs for carbon absorption
are the highest for any control method.
b.	Capital charges used in study estimate were 25 percent of capital instead of
17 percent used by EPA source.
Source: EPA 450/2-77-022, op. cit.
-------
EXHIBIT 11-11
U.S. Environmental Protection Agency
ESTIMATED CONTROL COSTS FOR COLD CLEANERS
FOR THE STATE OF GEORGIA
(12 County Non-Attainment Area)
1. CAPITAL COSTS
Number of Degreasers
Item
Needing Conversion
Costs
Capital
1,499
$509,735
2. ANNUALIZED COSTS
Item
Costs
Direct operating costs
$ 3,721
Capital related charges
127,434
Solvent cost
(55,199)
Net annualized costs
$ 75,956
Source: Booz, Allen & Hamilton, Inc.
-------
EXHIBIT 11-12
U.S. Environmental Protection Agency
ESTIMATED CONTROL COSTS FOR OPEN TOP
VAPOR DEGREASERS FOR THE STATE OF GEORGIA
(12 County Non-Attainment Area)
1. CAPITAL COSTS
Item
Cost
Safety switches
$ 1,700
Powered covers
408,000
Manual covers
5,100
Total
$414,800
2. ANNUALIZED COSTS
Item
Cost
Direct operating costs
$ 5,270
Capital related charges
103,700
Solvent cost
(73,831)
Net annualized costs
$ 35,139
Source: Booz, Allen & Hamilton, Inc.
-------
EXHIBIT 11-13
U.S. Environmental Protection Agency
ESTIMATED CONTROL COSTS FOR CONVEYORIZED
DEGREASERS FOR THE STATE OF GEORGIA
(12 County Non-Attainment Area)
1.
CAPITAL COSTS
Item
Refrigerator chiller
Monorail degreasers
Crossrod degreasers
Safety switches
Drying tunnel
Reduce openings
Downtime covers
Total
Costs
$ 68,400
82,060
1,000
5,000
19,000
5,700
$181,160
2.
ANNUALIZED COSTS
Item
Direct operating costs
Capital related charges
Solvent cost
Net annualized cost
Costs
$ 35,614
45,290
(47,322)
$ 33,582
Source: Booz, Allen & Hamilton, Inc.
-------
EXHIBIT 11-14
U.S. Environmental Protection Agency
ESTIMATED NUMBER OF COLD CLEANERS
NEEDING CONTROLS IN THE STATE
OF GEORGIA (12 County Non-Attainment Area)
Estimated	Estimated
Percent of	Number of Cleaners
Type of Control Cleaners Needing Control Needing Control
a
Drainage Facility	5	110
Freeboard and	63	1,389
Drainage
a.	Based on 10 percent of cleaners using low volatility solvents and
half of these needing drainage facilities.
b.	Based on 90 percent of cleaners using high volatility solvents and
70 percent of these needing additional freeboard and drainage.
Source: Booz, Allen & Hamilton Inc.
-------
EXHIBIT 11-15
U.S. Environmental Protection Agency
ESTIMATED NUMBER OF OPEN TOP VAPOR
DEGREASERS NEEDING CONTROL IN THE
STATE OF GEORGIA
(12 County Non-Attainment Area)
Estimated	Estimated
Percent of	Number of Cleaners
Type of Control Cleaners Needing Control	Needing Control
Manual covers 30	17
Safety switches 20	11
Powered cover 90	51
Source: Booz, Allen & Hamilton Inc.
-------
EXHIBIT 11-16
U.S. Environmental Protection Agency
ESTIMATED NUMBER OF CONVEYORIZED
DEGREASERS NEEDING CONTROLS
IN THE STATE OF GEORGIA
(12 Non-Attainment Counties)
Percent of Cleaners Number of Cleaners
Type of Control	Needing Control	Needing Control
Refrigerated chillers for	36	8
monorail and miscellan-
eous type cleanersa
Refrigerated chillers for	54	11
crossrod type cleaners
Safety switches	20	4
Drying tunnel	10	2
Minimized openings	90	19
Downtime covers	90	19
a Refrigerated chillers were estimated to be needed only on about
90 percent of all conveyorized vapor degreasers; thus, the per-
cent of units needed by monorail-miscellaneous and crossrod
types add only to 90 percent.
Source: Booz, Allen & Hamilton Inc.
-------
11.4 DIRECT ECONOMIC IMPLICATIONS
11.4.1 Time Required To Implement Proposed RACT Regulations
Because many degreasers are affected under the proposed
regulation (57 open top vapor degreasers, 21 conveyorized
degreasers and 2,204 cold cleaners in Georgia alone) and
because each requires retrofitting of a control device, some
users may not be able to comply within proposed compliance
schedules because of equipment availability. Discussions
with personnel from the major manufacturers of vapor and
cold degreasers reveal that none are prepared to provide the
necessary controls in quantities to meet a cumulative U.S.
wide demand. Some cleaners could be converted to 1,1,1-
trichloroethane and thus become exempt. In fact, many metal
solvent cleaners have been converted to trichloroethane in
the last few"years in anticipation of RACT regulations.
However, not all existing machines can be converted because
of inadequate condensing sections or improper materials of
construction. Trichloroethane can be extremely corrosive if
stabilizers are insufficiently replenished. In fact,
stainless steel vapor degreasers using 1,1,1-trichloroethane
have been reported to fail because of corrosion following
the loss of stabilizer.
11.4.2 Effect of Compliance Upon Selected Economic Indicators
Implementation of the proposed regulations is expected
to have a negligible effect on Georgia's statewide economy.
Low capital and annual operating costs required by the
solvent metal cleaner owners in meeting the proposed reg-
ulations are responsible for this minimal impact.
For example, Georgia's estimated total capital expen-
ditures in non-attainment counties for SIC groups 25 and 33-
39 exceed $75 million for 1976. Total capital expenditures
for retrofitting are estimated to be $1.1 million for all
SIC groups in non-attainment comities, less than one percent
of total capital expenditures for these counties.
Similarly implementation will have a negligible impact
on total shipments, prices and the state economy as a whole.
The total net annual operating costs of the proposed regu-
lations ($0.14 million) are negligible compared to the 1976
total shipments of $3.6 billion in SIC groups 25 and 33-39.
Considering that these expenditures are spread over service
industries and other industries not included in SIC's 25
and 33-39, the overall economic impact is even less signif-
icant.
11-21
-------
Although solvent metal cleaners are particular to cer-
tain industries the proposed regulations are expected to
not have an impact on the structure of the state industry.
This is due to the dispersion of solvent metal cleaners
over many industries and the minimal importance of solvent
metal cleaning to the manufacturing processes.
Implementation of the regulations will reduce demand
for metal cleaning solvents. This would result in a reduc-
tion in solvent sales of about $0.2 million annually which
may result in a loss of employment for firms supplying metal
cleaning solvents.
11.4.3 Effect of Compliance Upon Energy Consumption
Carbon adsorbers, refrigerated chillers and distilla-
tion units are the principal energy consuming control de-
vices used for controlling degreasing emissions. The re-
frigerated chiller, which would probably be the preferred
method of control because of its low capital and operating
costs, will increase a degreaser's energy consumption by
about 5 percent. The EPA has estimated consumption of 0.2
kw to 2.2 kw by a chiller, used on a typical open top vapor
degreaser of 1.7m2 size.1 For a typical conveyorized de-
greaser of about 3.8m2 size, consumption is estimated, on
this basis, to be 0.5 kw to 5.0 kw. Only conveyorized de-
greasers are expected to use chillers to comply; and about
90 percent or 19 of these currently do not have chillers.
Assuming 2,250 hours per year operation, total additional
energy consumption annually would be about 21,300 kw-hours
to 213,000 kw-hours. This is equal to $852 to $8,520 per
year in additional power costs, at a cost of $0.04 per kw-
hour. Most of this cost is recovered by savings in solvent
use. A portion of the increase in energy consumption will
be offset by reduced production and consumption of solvents;
production because it takes energy to produce solvents and
consumption because there is embodied energy in feedstocks
such as petroleum distillates.
EPA-450/2-77-022, op. cit.
11-22
-------
11.5 SELECTED SECONDARY ECONOMIC IMPACTS
Implementation is also expected to have minor, if not
negligible, impact upon other factors, such as employment,
market structure and productivity. The proposed regulations
include some change in work practices which will decrease
productivity in the metal cleaning operation by 5 percent
to 10 percent. Since metal cleaning is normally a minor
step in the manufacturing or service process, any change
in productivity and employment in user plants is expected
to be insignificant.
There will, however, be some temporary increase in
employment by those firms manufacturing such components
as refrigeration chillers and drying tunnels, that may be
required for retrofit controls. No estimates have been
made because manufacturers of such components are located
throughout the country. This temporary increase, however,
may be balanced by a slight decrease in employment occur-
ring because of lower solvent consumption. The decrease
would occur primarily in shipping and repackaging operations.
The implementation of the RACT guidelines should not
have any major affect on the current market structure of
the industries using solvent metal cleaning. Cleaners re-
quiring highest retrofitting costs (i.e., for conveyorized
cleaners) are generally owned by large firms. Smaller firms
would be expected to have only cold cleaners or open top
vapor degreasers. The highest capital costs would be for
an open top unit which would require an expenditure of
$8,000 or less to comply. This is not expected to be a
significant financial burden even to small-sized firms.
* * * *
Exhibit 11-17, on the following page, summarizes the
conclusions presented in this report.
11-23
-------
EXHIBIT 11-17
U.S. Environmental Protection Agency
summary of direct economic implications of
IMPLEMENTING RACT FOR SOLVENT META^ DEGREA5IJIG
IN THE STATE OF GEORGIA-
Current Situation
Number of potentially affected facilities
Indication of relative importance of
industrial section to state economy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of VOC control to meet
RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
RACT timing requirements (1982)
Problem Areas
VOC emission after RACT control
Cost effectiveness of RACT control
Discussion
About 2,300 plants.
Value of shipments of firms in SIC groups
affected for nonattainment counties is in the
range of 3.6 billion, about 40% of the state
total for these SIC groups.
Where technically feasible, firms are
substituting exempt solvent.
4,300 tons/year. (Including solvents classified
as exempt)
Substitution. Otherwise lowest cost option as
specified by EPA will be used.
Equipment modifications as specified by the
RACT guidelines.
Discussion
$1.1 million.
$0.14 million, (less than 0.01 percent of the
1977 affected facilities value of shipments).
Metal cleaning is only a fraction of manu-
facturing costs; price effect expected to be
less than 0.01 percent for affected facilities.
Less than 150 equivalent barrels of oil per
year increase.
5-10 percent decrease for manually operated
degreasers. Will not affect conveyorized
cleaners.
No effect except a possible slight decrease in
firms supplying metal degreasing solvents.
No change.
Equipment availability—only a few companies
now 3upply the recommended control modifications.
No significant problem areas seen. Most firms
will be able to absorb cost.
3,700 tons/year (11 percent of 1977 VOC
emission level—however, this does not include
emission controls for exempt solvents.)
$127 annualized cost per ton of emissions reduced.
nThese estimates were computed for nonattainment counties only. These were Clayton, Columbus,
Cobb, Coweta, DeKalb, Douglas, Fayette, Fulton, Gwinett, Henry, Paulding and Rockdale. The
proposed regulation would also apply to solvent metal cleaning operations in facilities with
potential VOC emissions over 100 tons annually outside the 12 county nonattainment area.
Although no facilities outside the nonattainment areas were identified, there mav be soma
affected m the state by the proposed regulations.
Source: 3ooz, Alien £ Hamilton, Inc.
-------
BIBLIOGRAPHY
U.S. Department of Commerce, County Business Patterns, 1976.
U.S. Department of Commerce, Census of Manufactures, 1972.
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Solvent Metal Cleaning EPA-450/2-77-002,
November 1977.
U.S. Environmental Protection Agency, Regulatory Guidance
for Control of Volatile Organic Emissions from 15 Categories
of Stationary Sources. EPA-905/2-78-001, April 1978.
Dow Chemical Company, Study to Support New Source Performance
Standards for Solvent Metal Cleaning Operations. EPA Contract
68-02-1329, June 30, 1976.
Private conversations with the following:
Dextrex Chemical Company, Detroit, Michigan
Ethyl Corporation
DuPont
Dow Chemical Company
PPG
Allied Chemical Company
R.R. Street
Baron Blakeslee Corporation, Cicero, Illinois
-------
13.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR'
TANK TRUCK GASOLINE
LOADING TERMINALS IN
THE STATE OF GEORGIA
-------
13.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
TANK TRUCK GASOLINE
LOADING TERMINALS IN
THE STATE OF GEORGIA
This chapter presents a detailed analysis of the impact
of implementing RACT controls for tank truck gasoline loading
terminals affected by proposed regulations in the State of
Georgia. The chapter is divided into six sections including:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Cost and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic implications
Selected secondary economic impacts.
Each section presents detailed data and findings based
on the RACT guidelines, previous studies of tank truck
gasoline loading terminals, interviews, and analysis.
Tank truck gasoline loading terminals in the State of
Georgia, for purposes of this report, refer to those
terminals affected by proposed state regulations.
Terminals located in the following counties: Clayton, Cobb,
Coweta, DeKalb, Douglas, Fayette, Fulton, Swinnett, Henry,
Muscogee, Paulding and Rockdale Counties, and all other terminals
in the state which emit 100 tons or more of VOC's per year.
13-1
-------
13.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining
estimates of:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Cost of controlling VOC emissions
Economic impact of emission control
for affected tank truck gasoline loading terminals in the
State of Georgia.
An overall assessment of the quality of the estimates
is detailed in the latter part of this section.
13.1.1 Industry Statistics
Industry statistics on affected tank truck gasoline
loading terminals were obtained from the Georgia Department
of Natural Resources, Environmental Protection Division and
the 1972 Census of Wholesale Trade, Petroleum Bulk Stations
and Terminals. All data are presented in a base year, 1977,
based on the following specific methodologies:
The number of establishments in Georgia for 1977
was provided by the Georgia Department of Natural
Resources Environmental Protection Division.
The number of employees in the terminals in 1977
was estimated by determining the number of employ-
ees per establishment in 197 2 (reported in the
1972 Census of Wholesale Trade, Petroleum Bulk
Stations and Terminals) and multiplying this ratio
by the number of facilities in 1977.
The number of gallons of gasoline sold from affected
terminals in 1977 in the State of Georgia was
estimated from the gasoline throughput reported
by the Georgia Department of Natural Resources,
Environmental Protection Division.
Sales, in dollars, of motor gasoline for 1977 were
estimated by multiplying the number of gallons of
gasoline sold in 1977 by the national dealer tank-
wagon price in 1977 (42. 5
-------
13.1.2 VOC Emissions
VOC emissions for tank truck gasoline loading terminals
in Georgia were estimated based on data provided by the
Georgia Department of Natural Resources, Environmental Pro-
tection Division. Emissions were calculated using U.S. EPA
emissions factors.
13.1.3 Processes for Controlling VOC Emissions
Processes for controlling VOC emissions for tank truck
gasoline loading terminals are described in Control of
Hydrocarbons from Tank Truck Gasoline Loading Terminals,
EPA-450/2-77-026. These data provide the alternatives avail-
able for controlling VOC emissions from tank truck gasoline
loading terminals. Several studies of VOC emission control
were also analyzed in detail, and interviews with petroleum
trade associations, terminal operators and vapor control
equipment manufacturers were conducted to ascertain the most
likely types of control processes which would be used in
terminals in Georgia. The specific studies analyzed were:
Demonstration of Reduced Hydrocarbon Emissions from Gasoline
Loading Terminals, PB-243 363; Systems and Costs to Control
Hydrocarbon Emissions from Stationary Sources, PB-23 6 9 21;
and The Economic Impact of Vapor Control in the Bulk Storage
Industry, draft report to U.S. EPA by Arthur D. Little.
The alternative types of vapor control equipment likely
to be applied to tank truck gasoline loading terminals were
analyzed. Model plants reflecting each control alternative
were defined and each type of control alternative used was
applied to the number of tank truck gasoline loading ter-
minals in the state. The methodology for the cost analysis
of VOC emissions is described in the following paragraphs.
13.1.4 Cost of Vapor Control Systems
The costs of vapor control systems were developed by:
Determining the alternative types of control
systems likely to be used
Estimating the probable use of each type of
control system
Defining systems components
13-3
-------
Developing installed capital costs for systems
components
Aggregating installed capital costs for each
alternative control system
Defining two model terminals based on throughput
levels
Developing costs of the alternative control systems
for the two model terminals including:
Installed capital cost
Direct operating costs
- Annual capital charges
Gasoline credit
Net annual cost
Assigning model terminal costs to terminals in
Georgia
Aggregating costs to the total industry in
Georgia.
Costs were determined mainly from analyses of the RACT
guidelines and from interviews with petroleum marketers'
associations, terminal operators and vapor control equip-
ment manufacturers.
13.1.5 Economic Impact
The economic impacts were determined by analyzing the
lead time requirements needed to implement RACT; assessing
the feasibility of instituting RACT controls in terms of
capital availability and equipment availability; comparing
the direct costs of RACT control to various state economic
indicators; and assessing the secondary effects on market
structure, employment and productivity as a result of im-
plementing RACT controls in Georgia.
13.1.6 Quality of Estimates
Several sources of information were utilized in
assessing the emissions, cost and economic impact of imple-
menting RACT controls on tank truck gasoline loading
terminals in Georgia. A rating scheme is presented in this
13-4
-------
section to indicate the quality of the data available for use
in this study. A rating of "A" indicates hard data (i.e.,
data that were published for the base year); "B" indicates
data that were extrapolated from hard data; and "C" indicates
data that were not available in secondary literature and
were estimated based on interviews, analyses of previous
studies and best engineering judgement. Exhibit 13-1,
on the following page, rates each study output listed and the
overall quality of the data.
13-5
-------
Exhibit 13-1
U.S. Environmental Protection Agency
DATA QUALITY
B C
A Extrapolated Estimated
Study Outputs	Hard Data	Data	 Data
Industry statistics
Emissions
Cost of emissions
control
Statewide costs of
emissions
Economic impact
Overall quality of
data
Source: Booz, Allen & Hamilton, Inc.
-------
13.2 INDUSTRY STATISTICS
Industry characteristics, statistics and business
trends for tank truck gasoline loading terminals in Georgia
are presented in this section. The discussion includes a
description of the the number of facilities and their char-
acteristics, a comparison of the size of the gasoline ter-
minal industry to state economic indicators, a historical
characterization and description of the industry and an
assessment of future industry patterns. Data in this section
form the basis for assessing the impact on this industry of
implementing RACT on affected tank truck gasoline loading
terminals in Georgia.
13.2.1 Size of the Industry
There were an estimated 33 potentially affected tank
truck gasoline loading terminals, as of 1977, in Georgia.
Industry sales were in the range of $2.8 billion, with an
estimated yearly throughput of 6.54 billion gallons of
gasoline. The estimated number of employees in 1977 was
520. These data and the sources of information are summar-
ized in Exhibit 13-2, on the following page. Annual capital
investments have not been estimated. In general, tank
truck gasoline loading terminal investments are for plant
and equipment to replace worn-out facilities, modernize
the establishments or improve operating efficiencies.
13.2.2 Comparison of the Industry to the State Economy
A comparison of the affected tank truck gasoline loading
terminal industry to the economy of the State of Georgia is
shown in this section by comparing industry statistics to state
economic indicators. Employees in the tank truck gasoline
loading terminal industry represent 0.02 percent of the'total
state civilian labor force of Georgia. The value of gasoline
sold from terminals represented approximately 18 percent of
the total value of wholesale trade in Georgia in 1977.
13.2.3 Characterization of the Industry
Tank truck gasoline loading terminals are the primary
distribution point in the petroleum product market network
as shown in Exhibit 13-3, following Exhibit 13-2. Terminals
13-6
-------
Exhibit 13-2
U.S. Environmental Protection Agency
INDUSTRY STATISTICS FOR BULK GASOLINE
PLANTS IN GEORGIA
Number of Number of	Sales	Gasoline Sold
Establishments Employees ($ Billion, 1977) (Billions of Gallons)
33a	520b	2.8C	6.546a
a.	Georgia Department of Natural Resources Environmental Protection
Division.
b.	Booz, Allen & Hamilton Inc. estimate based on the ratio of the
number of employees to the number of establishments in 1972.
c.	Number of gallons of motor gasoline sold in 1977 multiplied by
the national dealer tankwagon price in 1977 (42.51C/gallon).
Source: Booz, Allen & Hamilton Inc.
-------
Exhibit 13-3
U.S. Environmental Protection Agency
GASOLINE DISTRIBUTION NETWORK
Typical delivery route of truck-trailer
Typical delivery route of account truck
Typical transaction with consumer coming to supplier
Final Product Usage
Economic Analysis of Vapor Recovery Systems on Small
Bulk Plants, EPA 240/1-77-013, September 1976, p. 3-2.
-------
receive gasoline from refineries by pipeline, tanker or
barge.
Most gasoline terminals load all of the petroleum
product they receive into truck transports at the terminals
loading racks. These truck transports usually have storage
capacities between 8,000 and 9,000 gallons and deliver gasoline
to service stations and bulk gasoline plants for further
distribution.
Over two-thirds of the gasoline terminals in the United
States are owned by major oil companies and refiner/marketers.
The remaining gasoline terminals are owned by independents.
The major oil companies and regional refiners own a propor-
tionately greater number of the large gasoline terminals and
proportionately fewer of the small gasoline terminals.
Approximately ten years ago, petroleum companies began
to consider gasoline terminals as separate profit centers.
Terminals are now expected to recover all operating expenses
as well as to provide an acceptable return on capital. Since
terminals are now treated as profit centers, petroleum mar-
keters have closed many uneconomic and marginal facilities
throughout the country." Some marketers have withdrawn
from selected regions of the country as part of their over-
all corporate strategy. Gasoline terminals in these markets
are being consolidated, sold or closed.
Gasoline terminals are generally located near refineries,
pipelines and large metropolitan areas. The daily through-
put ranges from 20,000 gallons per day to over 600,000 gallons
per day.
Exhibit 13-4, on the following page, shows an estimated
distribution of gasoline terminals by throughput in Georgia.
13-7
-------
Exhibit 13-4
U.S. Environmental Protection Agency
DISTRIBUTION OF TANK TRUCK GASOLINE
LOADING TERMINALS BY AMOUNT OF THROUGHPUT
IN THE UNITED STATES
Gasoline
Throughput	Percentage
(gallons per day) of Plants
Less than 200,000
30
200,000 to 399,000
27
400,000 to 599,000
10
Over 600,000
33
Total
100
Source: Georgia Department of Natural Resources,
Environmental Protection Division.
-------
13.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents information on tank truck gasoline
loading terminal operations, estimated VOC emissions from
terminal operations in Georgia, the extent of current con-
trol in use, the requirements of vapor control required by
RACT and the likely RACT alternatives which may be used for
controlling VOC emissions from affected gasoline terminals
in Georgia.
13.3.1 Tank Truck Gasoline Loading Terminal Operations
Tank truck gasoline loading terminals are the primary
distribution facilities which receive gasoline from pipe-
lines, tankers and barges; store it in above-ground storage
tanks; and subsequently dispense it via tank trucks to bulk
gasoline plants and service stations. Tank truck gasoline
loading terminals with an average daily gasoline throughput
of 20,000 gallons per day or more (as defined by EPA) require
vapor control equipment to reduce VOC emissions from gaso-
line terminal operations in the 12 county non-attainment
areas of Georgia. In unclassified areas of Georgia only
those facilities with potential emissions over 100 tons
annually must comply with the RACT requirements. Terminals
which emit 100 tons of VOC emissions or greater were identi-
fied by the Georgia Department of Natural Resources, Environ-
mental Protection Division. These facilities are described
in detail in Control of Hydrocarbons from Tank Truck Gasoline
Loading Terminals, EPA-450/1-77-026.
13.3.2 Emissions and Current Controls
This section presents the estimated VOC emissions from
affected tank truck gasoline loading terminals in Georgia
in 1977 and the current level of emission control already
implemented in the state. Exhibit 13-5, on the following
page, shows the total estimated emissions in tons per year
from gasoline terminals in Georgia. The estimated VOC
emissions from the 33 tank truck gasoline loading terminals
ar.e 20, 39 6 tons per year.
The Petroleum Council of Georgia reports that approx-
imately 15 percent of terminals in Georgia currently bottom
fill and the remaining 85 percent top submerge fill. This
finding is used in this analysis. It is estimated by the
Georgia Department of Natural Resources, Department of
Environmental Protection that no terminals in Georgia are
currently equipped with vapor recovery systems.
13-8
-------
Exhibit 13-5
U.S. Environmental Protection Agency
VOC EMISSIONS FROM TANK TRUCK GASOLINE
LOADING TERMINALS IN GEORGIA
Number of
Facilities	Total Emissions
(tons/year)
33	20,396c
a. Booz, Allen & Hamilton Inc. estimate based on data from the
Georgia Department of Natural Resources, Environmental Protection
Division.
Source; Booz, Allen & Hamilton Inc. and the Georgia Department of
Natural Resources, Environmental Protection Division.
-------
13.3.3 RACT Guidelines
The RACT guidelines for VOC emission control from tank
truck gasoline loading terminals require the following con-
trol systems:
Top submerged or bottom fill of gasoline storage
tanks and outgoing tank trucks
Vapor collection from trailer-transport truck
loading
Vapor recovery or thermal oxidation of collected
vapors
Proper operation and maintenance of equipment.
Exhibit 13-6, on the following page, summarizes the RACT
guidelines for VOC emissions control from tank truck gasoline
loading terminals.
13.3.4 Selection of the Most Likely RACT Alternatives
Control of VOC emissions from tank truck gasoline
loading terminals is achieved using submerged or bottom
¦filling of storage tanks and of tank trucks and vapor control
of the loading of outgoing trailer-transport trucks. There
are several alternative means of achieving vapor control at
tank truck gasoline loading terminals, based on the type of
vapor control equipment installed.
Four likely alternatives for vapor control are:
Adsorption/absorption•
Compression refrigeration absorption
Refrigeration
Thermal oxidation.
Each type of vapor control system is briefly described below.
13.3.4.1 Adsorption/Absorption (AA)
Vapor control by adsorption/absorption is achieved by
the following method. Vapors from tank truck loading oper-
ations are collected and directed to one of two activated
vapor beds. Vapors are condensed into pores in the carbon.
13-9
-------
Exhibit 13-6
U.S. Environmental Protection Agency
VOC EMISSION CONTROL TECHNOLOGY FOR
TANK TRUCK GASOLINE LOADING TERMINALS
Facilities Affected Sources of Emissions RACT Control Guideline
Non-Attainment Areas
12 County Area
Tank truck ter-
minals with daily
throughput of
greater than 76,000
liters (20,000
gallons) of gaso-
line
Unclassified Areas
Only those facil-
ities with potential
VOC emission over
100 tons annually.a
Filling tank
trucks and
breathing and
working losses
from storage
tanks
Leakage
Top submerge or
bottom fill tank
truck and one of
the following vapor
control systems:
Adsorption/
Absorption
Refrigeration
Compression
Refrigeration
Absorption
Thermal
Oxidation
Maintenance of
areas that may
leak
a. These facilities were identified by the Georgia Department of
Natural Resources, Environmental Protection Division
Source: U.S. Environmental Protection Agency
-------
These vapors are then regenerated by pulling a vacuum over
the bed. Cold gasoline is then circulated in a separator
and the hot vapors are absorbed into the cold gasoline. This
process has recently been marketed and is becoming competi-
tive with the refrigeration ;system described below. It has
been reported that less maintenance is required for this type
of vapor recovery system than for the other three types.
13.3.4.2 Compression Refrigeration Absorption (CRA)
Vapor control by compression refrigeration absorption
is achieved by the following method. Vapors from tank truck
loading operations are collected in a vapor holder. The pres-
sure is increased in the holder, thus causing vapors to
condense. Further condensation is then achieved by mixing
chilled gasoline and vapors under pressure and the vapors
are absorbed into the gasoline. This system is becoming
less popular than the more recently developed refrigeration
system described below and it is not expected that this type
of system will be used in Georgia.
13.3.4.3 Refrigeration (RF)
Vapor recovery using refrigeration is based on the
condensation of gasoline vapors by refrigeration at atmos-
pheric pressure. Vapors displaced from tank truck loading
operations enter a horizontal fin-tube condenser where they
are cooled to a temperature of about -40°F and condensed.
Because vapors are treated as they are vented from tank
trucks, no vapor holder is required. Condensate is with-
drawn from the condenser and the remaining air containing
only a small amount of hydrocarbons is vented to the atmos-
phere. This system is priced competitively with AA systems
because of market pressure, although it is estimated to be
more costly to build.
13.3.4.4 Thermal Oxidation (OX)
Vapor control by thermal oxidation is achieved by
incineration devices. Gasoline vapors are displaced to a
vapor holder. When the vapor holder reaches its capacity,
vapors are released to the oxidizer, after mixing with a
properly metered air stream,and combusted. Later models of
this type of thermal oxidizer do not require vapor holders;
vapors from the tank trucks during loading operations are
13-10
-------
vented directly to the thermal oxidizer. It is not expected
that this type of vapor control system will be used in
Georgia since there are fire hazards with a flame and
terminal operators are also reportedly reluctant to-burn
valuable hydrocarbons.
13.3.5 Leak Prevention from Tank Trucks
For vapor control systems to operate optimally,.
it is essential to maintain leakless tank trucks. This is
achieved by using proper operating procedures and periodic
maintenance of hatches, P-V valves and liquid and gaseous
connections.
13-11
-------
13.4 COST AND HYDROCARBON REDUCTION BENEFIT EVALUATIONS
FOR THE MOST LIKELY RACT ALTERNATIVES
Costs for VOC emission control equipment are presented
in this section. The costs for the four types of vapor con-
trol systems described in Section 13.3 are presented for
two model tank truck gasoline loading terminals. The final
section presents a projection of model terminal control
costs to the statewide industry in Georgia.
13.4.1 Factory Costs for Four Types of Vapor Control Systems
The factory costs for the four types of vapor control
systems (summarized in Exhibit 13-7, on the following page)
were derived from analysis of the RACT guidelines; from
interviews with terminal operators, major oil companies and
equipment manufacturers; and from previous cost and economic
studies of tank truck gasoline loading terminals.
Adsorption/absorption and refrigeration systems are
expected to be the only two types of vapor control systems
used at tank truck gasoline loading terminals in Georgia.
It is estimated that 50 percent of the systems will be
adsorption/absorption and the other 50 percent will be
refrigeration systems. Factory costs for both systems are
assumed to be equal because of competitive pressures. Mainte-
nance costs for refrigeration systems are approximately 2
percent higher than those for adsorption/absorption systems.
Costs to equip a terminal that currently top submerge
fills with a vapor recovery system are identical to costs to
equip a terminal that currently bottom fills with a vapor
recovery system. This holds true for terminals handling
saturated hydrocarbon vapor streams. In cases where Stage 1
for gasoline dispensing are not in effect, a terminal
hydrocarbon vapor stream is likely to not be fully saturated.
^Therefore, it may be possible to equip a bottom fill terminal
with a smaller vapor recovery unit than one required to
handle a saturated hydrocarbon vapor stream.
13.4.2 Costs for Two Model Tank Truck Gasoline Loading
Terminals
Two model tank truck gasoline loading terminals and
their associated vapor control costs are characterized in
this section. The costs are based on the control estimates
13-12
-------
Exhibit 13-7
U.S. Environmental Protection Agency
FACTORY COSTS OF ALTERNATIVE
VAPOR CONTROL SYSTEMS
a
Factory Cost	Factory Cost
for 250,000	for 500,000
gallon per	gallon per
Type of Control System day system	day system
($000, 1977)	($000, 1977)
Adsorption/Absorption 120	155
Compression-Refrigera- 128	164
tion-Absorption
Q
Refrigeration 120	155
Thermal Oxidation 72	95
a.	Costs are based on average of range of costs quoted by vendors
to the U.S. Environmental Protection Agency and reported in The
Economic Impact of Vapor Control on the Bulk Storage Industry,
draft report, July 1978.
b.	Hydrotech Engineering reported a factory price of $92,000 for a
250,000 gallon per day unit.
c.	Expect system priced competitively to adsorption/absorption system
due to market pressure.
Source: Hydrotech, U.S. Environmental Protection Agency, Exxon and
Booz, Allen & Hamilton Inc. estimates
-------
for adsorption/absorption and refrigeration systems reported
by equipment manufacturers and through interviews.
Exhibit 13-8, following Exhibit 13-7, defines two model
tank truck gasoline loading terminals characteristics and
50 percent of the terminals in. Georgia can be characterized
by Model Terminal A; the remaining 50 percent are assumed
to be characterized by Model Terminal B.
The costs for the model terminals are used in Section
13.4.3 to project costs of vapor control equipment to
the affected industry statewide. The costs for each model
terminal are:
Installed capital cost, which includes equipment
and modification costs, labor and costs to modify
trucks ($3,000 per truck).
Annualized direct operating costs which include elec-
tricity, maintenance, operating labor and carbon
replacement costs. Maintenance costs for the
adsorption/absorption system are slightly lower
than those for refrigeration.
Annualized capital charges include costs for
depreciation, interest, taxes and insurance and
are estimated to be 25 percent of the installed
capital cost.
Net annualized costs, which are the sum of the
capital charges and direct operating costs. It
should be noted that gasoline credit has not yet
been accounted for. Gasoline credit will be
taken into account when the costs are projected
to the industry.
Another cost characterization that can be made is hydrocarbon
reduction versus cost. This finding will also be shown in
the statewide analysis.
13.4.3 Projection to the Statewide Industry
Exhibit 13-9, on the following page, shows the projec-
tion of vapor recovery costs to- the statewide industry in
Georgia. The estimates are based on the following assump-
tions .
13-13
-------
Exhibit 13-8
U.S. Environmental Protection Agency
DESCRIPTION AND COST OF MODEL TANK
TRUCK GASOLINE LOADING TERMINALS
EQUIPPED WITH VAPOR CONTROL SYSTEMS
Tank Truck Gasoline Loading
Terminal Characteristics
Model Terminal A
Model Terminal B
Throughput
Loading racks
Storage tanks
Tank trucks
Compartments per account truck
Vapor control systems
250,000 gallons/day
1
3
6
4
500,000 gallons/day
1
3
15
4
Adsorption/Absorption Adsorption/Absorption
Refrigeration
Refrigeration
Tank Truck Gasoline Loading
	Terminal Costs	AA	RF	AA	RF
Installed capital cost	$258,000	$258,000	$355,000	$355,000
Annualized direct operating costs
. Electricity	3,900	9,900	7,800	19,800
. Maintenance	10,800	13,200	13,950	17,050
. Operating labor	1,500	1,500	1,500	1,500
Carbon replacement	2,400	-	4,700
Subtotal (direct operating costs)	18,600	24,600	27,950	38,350
Annualized capital charges	64,500	64,500	88,750	88,750
Net annualized cost (not in-	83,100	89,100	116,700	127,100
eluding gasoline credit)
Source: Booz, Allen & Hamilton Inc.
-------
Exhibit 13-9
U.S. Environmental Protection Agency
STATEWIDE COSTS OF VAPOR CONTROL SYSTEMS
FOR TANK TRUCK GASOLINE LOADING TERMINALS
Characteristic/Cost Item Data
Number of terminals	33
Total annual throughput	6. 54
(billions of gallons)
Uncontrolled emissions	20,396
(tons/year)
Emission reduction	18,356
(tons/year)
Installed capital cost	10.114
($ million, 1977)
Direct annual operating cost 0.903
($ millions, 1977)
Annual capital charges	2 528
($ millions, 1977)
Annual gasoline credit3	3.470
($_millions, 1977)
Net annualized cost (credit) (.039)
($ millions, 1977)
Annual cost (credit) per ton (2.12)
of emissions reduced at
the terminal
($ per ton)
Annual cost (credit) per	(1.71)
ton of emissions reduced
from gasoline marketing
($ per ton)
a. Based on an estimated 22,783 tons of emissions recovered which
includes 3,900 tons collected from gasoline service stations,
527 tons collected from bulk plants and 18,356 tons collected
at the terminal. The gasoline is valued at $.39 per gallon.
Source-. Booz, Allen & Hamilton Inc.
-------
In Georgia, 50 percent of the affected tank
truck gasoline loading terminals can be character-
ized by Model Terminal A and the remaining can
be characterized by Model Terminal B
Fifty percent of the affected terminals will
implement the adsorption/absorption vapor control
system to comply with RACT and the other 50
percent will implement the refrigeration system
to comply with RACT
Terminals outside the 12 county area whose
emissions are less than 100 tons are exempted
from this analysis
RACT is implemented at bulk gasoline plants and
gasoline service stations in the 12 counties in
the state. Ninety percent of the gasoline vapors
collected from bulk gasoline plants and 6 7 percent
of the gasoline vapors collected at gasoline
service stations are recovered and credited to
the tank truck gasoline loading terminal.
Based on the previous assumptions, the total cost to
the industry for installing vapor recovery equipment is
estimated to exceed $10 million. The amount of gasoline
recovered is valued at $3.47 million. The annual credit
per ton of emissions controlled from terminals is estimated
to be $2.12 per ton. The overall credit per ton of emissions
controlled from gasoline marketing in the affected counties
in the state is estimated to be $1.71 per ton.
13-14
-------
13.5 DIRECT ECONOMIC IiMPLICATIONS
This section presents the direct economic implications
of implementing RACT controls to the statewide industry,
including availability of equipment and capital; feasibility
of the control technology; and impact on state economic in-
dicators .
13.5.1 RACT Timing
RACT must be implemented statewide by February, 198 2.
This requires that tank truck gasoline loading terminal oper-
ators must have vapor control equipment installed and oper-
ating within the next three years. The timing requirements
of RACT impose several requirements on terminal operators
including:
Determining appropriate vapor control system
Raising capital to purchase equipment
Acquiring the necessary vapor control equipment
Installing and testing vapor control equipment to
insure that the system complies with RACT.
The sections which follow discuss the feasibility and the
economic implications of implementing RACT within the re-
quired timeframe.
13.5.2 Feasibility Issues
Technical and economic feasibility issues of implementing
RACT controls are discussed in this section.
Several tank truck gasoline loading terminal operators
in the United States have successfully implemented vapor
control systems. State adoption of RACT regulations will
generate a new demand for vapor control systems. It is
expected that sufficient leadtime is available to meet the
increased demand, thus making the implementation of RACT
technically feasible.
13-15
-------
RACT must be implemented at terminals in the 12 county
area in Georgia. Terminals outside the 12 county area whose
emissions are greater than 100 tons must implement RACT
controls. Terminals servicing uncontrolled bulk gasoline
plants and uncontrolled gasoline dispensing facilities will
have problems of equipment compatibility.
In the area of economic feasibility it has been
reported that terminal operators have access to capital
to purchase vapor control equipment and that no terminals
should cease operations because of the cost of implementing
RACT. Terminals located in the Savannah area will not
have the same amount of vapor recovery credit as will
terminals in the 12 county area since bulk gasoline plants
and gasoline dispensing facilities are not controlled outside
of the 12 county area.
13.5.3 Comparison of Direct Cost With Total Value of
Shipments
The net annualized cost to the tank truck gasoline
loading terminals resulting from RACT represents an
insignificant percent of the total gasoline sold from
terminals in the state.
13-16
-------
13.6 SELECTED SECONDARY ECONOMIC IMPACTS
This section discusses the secondary economic impact
of implementing RACT on employment, market structure and
productivity.
Employment—No decline in employment is predicted
since no terminal will close solely because of RACT
requirements. A slight increase in operating and
maintenance labor will be required through imple-
mentation of RACT but this is predicted to have
minimal impact on any employment increase.
Market structure—No change in market structure
is expected from implementation of RACT.
Productivity—No change in worker productivity is
expected to result from implementation of RACT.
Exhibit 13-10 presents a summary of the findings of
this report.
13-17
-------
Exhibit 13-10
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR TANK TRUCK GASOLINE
LOADING TERMINALS IN GEORGIA
Current Situation
Discussion
Number of potentially affected
facilities
Indication of relative importance
of industrial section to state
economy
Current industry technology trends
1977 VOC actual emissions
Industry preferred method of VOC
control to meet RACT guidelines
33
1977 industry sales were $2.8 billion, with
annual throughput of 6.546 billion gallons.
New terminals will be designed with vapor
recovery equipment
20,400 tons per year
Submerge fill or bottom fill and vapor
recovery
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized credit (statewide)
Price
Energy
Productivity
Employment
Market structure
Problem area
VOC emission after control
Cost effectiveness of control
Discussion
$10.114 million
.$0,039 million (approximately 0.001 percent
of value of shipment)
Assuming "full cost pass-through," no change
in price
Assuming full recovery of gasoline—net savings
of 125,382 barrels annually from terminal
emissions
No major impact
No direct impact
No direct impact
Full gasoline credit from vapors from bulk
gasoline plants and gasoline service
stations require uniform RACT requirements
throughout the state
2,000 tons per year
$1.71 annualized credit/annual ton of VOC
reduction from terminals assuming gasoline
credit from vapors returned from bulk gasoline
plants and gasoline service stations
Source: Booz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
Georgia Department of Natural Resources, Environmental
Protection Division, Emissions Inventory Data.
National Petroleum News Fact Book, 1976, McGraw Hill, Mid-
May 1976.
National Petroleum News Fact Book, 1977, McGraw Hill, Mid-
May 1977.
National Petroleum News Fact Book, 1978, McGraw Hill, Mid-
June 1978.
Control of Hydrocarbons from Tank Truck Gasoline Loading
Terminals, EPA-450/2-77-026, U.S. Environmental
Protection Agency, October 1977.
The Economic Impact of Vapor Control on the Bulk Storage
Industry, prepared for U.S. Environmental Protection
Agency by Arthur D. Little, draft report, July 1978.
Regulatory Guidance for Control of Volatile Organic Compound
Emissions from 3.5 Categories of Stationary Sources,
EPA-90 5/2-78-001, April 1978.
Systems and Costs to Control Hydrocarbon Emissions from
Stationary Sources, PB-236 921, Environmental Protection
Agency, September 1974.
1972 Census of Wholesale Trade, Petroleum Bulk Stations and
Terminals, U.S. Bureau of Census.
Demonstration of Reduced Hydrocarbon Emissions from Gasoline
Loading Terminals, PB-2 34 363.
Private conversation with Mr. Clark Houghton, Mid-Missouri
Oil Company.
Private conversation with Mr. Gordon Potter, Exxon, Houston,
Texas.
Private conversation with Mr. James McGill, Hydrotech,
Tulsa, Oklahoma.
Private conversation with Mr. Frederick Rainey, Shell Oil
Company, Houston, Texas.
-------
BIBLIOGRAPHY
National
Petroleum
News
Factbook,
1976,
McGraw
Hill,
Mid-
May 1976.







National
Petroleum
News
Factbook,
1977,
McGraw
Hill,
Mid-
May 1977.







National
Petroleum
News
Factbook,
1978,
McGraw
Hill,
Mid-
June 1978.
Control of Hydrocarbons from Tank Truck Gasoline Loading
Terminals, EPA-450/2-77-026, U.S. Environmental Protection
Agency.
The Economic Impact of Vapor Control on the Bulk Storage
Industry, prepared for U.S. Environmental Protection
Agency by Arthur D. Little, draft report, July 1978.
Regulatory Guidance for Control of Volatile Organic Compound
Emissions from 15 Categories of Stationary Sources,
EPA 905/2-78-001, April 1978.
Systems and Costs to Control Hydrocarbon Emissions from
Stationary Sources, PB-236 921, Environmental Protection
Agency, September 1974.
1972 Census of wholesale Trade, Petroleum Bulk Stations and
Terminals, U.S. Bureau of Census.
Demonstration of Reduced Hydrocarbons Emissions from Gasoline
Loading Terminals, PB-234 363.
Private conversation with Mr. Clark Houghton, Mid-Missouri
Oil Company.
Private conversation with Mr. Gordon Potter, Exxon, Houston,
Texas.
Private conversation with Mr. James McGill, Hydrotech,
Tulsa, Oklahoma.
Private conversation with Mr. Frederick Rainey, Shell Oil
Company, Houston, Texas.
Private conversation with Mr. William Deutsch, Illinois
Petroleum Marketers Association, Springfield, Illinois.
-------
14.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
BULK GASOLINE PLANTS IN
THE STATE OF GEORGIA
-------
14.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
BULK GASOLINE PLANTS IN
THE STATE OF GEORGIA
This chapter presents a detailed analysis of the impact
of implementing RACT controls for bulk gasoline plants in
the State of Georgia. The following 12 counties are con-
sidered urban nonattainment counties and are included in
the statewide analysis:
Clayton
Cobb
Coweta
DeKalb
Douglas
Fayette
Fulton
Gwinnett
Henry
Muscogee
Paulding
Rockdale.
In areas of the state that are unclassified, only those
facilities with potential emissions of over 100 tons annually
are subject to control requirements in the regulations. By
the EPA definition of a bulk gasoline plant (more than
20,000 gallons throughput per month) it is highly unlikely
that any bulk gasoline plants would have potential VOC
emissions of over 100 tons per year. Therefore, the RACT
guidelines will only apply to bulk gasoline plants in these
12 counties.1 Throughout the report, therefore, "the State
of Georgia" refers to these 12 counties. The chapter is
divided into six sections including:
Specific methodology and quality of estimates
Industry statistics
The technical situation of the industry
Cost and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic implications
1 Bulk gasoline plants subject to the regulations in
non-attainment areas include all sources emitting
5 pounds in any one hour or 50 pounds in any one
day of VOC.
14-1
-------
Selected secondary economic impacts.
Each section presents detailed data and findings based
on the RACT guidelines, previous studies of bulk gasoline
plants, interviews, and analysis.
14-2
-------
14.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining
estimates of:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Cost of controlling VOC emissions
Economic impact of emission control
for bulk gasoline plants in the State of Georgia.
14.1.1 Industry Statistics
Industry statistics on bulk gasoline plants were
obtained from several sources. All data were converted to
a base year, 1977, based on the following methodologies.
The number of establishments for 1977 was pro-
vided by the Georgia Department of Natural Re-
sources, Environmental Protection Division.
The number of employees in 1977 was derived from
the 1972 Census of Wholesale Trade, Petroleum Bulk
Stations and Terminals, by determining the number
of employees per establishment in 197 2 and mul-
tiplying this factor by the number of establish-
ments reported for 1977.
The number of gallons of gasoline throughput for
1977 in the 12 counties in the State of Georgia
was estimated from data supplied by the Georgia
Department of Natural Resources, Environmental
Protection Division.
Sales, in dollars, of motor gasoline for 1977 were
estimated by multiplying the gasoline throughput
in 1977 by the national dealer tankwagon price in
1977 (42 . 51C/gallon—reported in the National
Petroleum News Fact Book, 1978).
14.1.2 VOC Emissions
VOC emissions from the 12 affected counties in Georgia
were estimated using data on bulk plant gasoline throughput
and number of tanks supplied by the Georgia Department of
14-3
-------
Natural Resources, Environmental Protection Division. Cal-
culations are based on U.S. EPA emission factors provided
in Control of Volatile Organic Emissions from Bulk Gasoline
Plants, EPA-450/2-77-035.
14.1.3 Processes for Controlling VOC Emissions
Processes for controlling VOC emissions for bulk
gasoline plants are described in Control of Volatile Organic
Emissions from Bulk Gasoline Plants. These data provide
the alternatives available for controlling VOC emissions
from bulk gasoline plants. Several studies of VOC emission
control were also analyzed in detail, and interviews with
petroleum trade associations, bulk plant operators, and
vapor control equipment manufacturers were conducted to
ascertain the most likely types of control processes which
would be used in bulk gasoline plants in Georgia. The
specific studies analyzed were: Evaluation of Top Loading
Vapor Balance Systems for Small Bulk Plants, EPA 34 0/1-77-014;
Economic Analysis of Vapor Recovery Systems on Small Bulk
Plants, EPA 340/1-77-013; Systems and Costs to Control
Hydrocarbon Emissions from Stationary Sources, EPA, PB-23 6 921;
and Study of Gasoline Vapor Emission Controls at Small Bulk
Plants. EPA PB-267-096.
The alternative types of vapor control equipment likely
to be applied to bulk gasoline stations were arrayed, and
percentage reductions from using each type of control were
determined. The methodology for the cost analysis based on
this scheme is described in the following paragraphs.
14.1.4 Cost of Vapor Control Systems
The cost of vapor control systems were developed by:
Determining the alternative types of control
systems likely to be used
Estimating the probable use of each type of
control system
Defining systems components
Developing installed capital costs for systems
components
Aggregating installed capital costs for each
alternative control system
14-4
-------
Defining two model plants
Developing costs of control systems for model
plants including
Installed capital cost
Direct operating costs
Annual capital charges
Gasoline credit
Net annualized cost
Assigning model plant costs to plants in Georgia
Aggregating costs to the total industry in Georgia.
Costs were determined from analyses of the following
previous studies:
Control of Volatile Organic Emissions from Bulk
Gasoline Plants, EPA 450/2-77-035
Study of Gasoline Vapor Emission Controls at
Small Bulk Plants, EPA PB-267-096
Economic Analysis of Vapor Recovery Systems on
Small Bulk Plants, EPA 340/1-77-014
Evaluation of Top Loading Vapor Balance Systems
for Small Bulk Plants, EPA 340/1-77-014
and from interviews with petroleum marketers' associations,
bulk plant operators, and vapor control equipment manufac-
turers.
The estimated cost of control to Georgia was based on
information provided by the Georgia Department of Natural
Resources, Environmental Protection Division. Plant
characteristics determined from this data included:
Plant throughput
Number of storage tanks per facility.
It was assumed that top splash loading was employed
at 50 percent of the plants and top submerged loading at
the remaining plants.
14-5
-------
14.1.5 Economic Impacts
The economic impacts were determined by analyzing the
lead time requirements needed to implement RACT; assessing
the feasibility of instituting RACT controls in terms of
capital availability and equipment availability; comparing
the direct costs of RACT control to various state economic
indicators; and assessing the secondary effects on market
structure, employment, and productivity as a result of im-
plementing RACT controls for the 12 counties in Georgia.
14.1.6 Quality of Estimates
Several sources of information were utilized in
assessing the emissions, cost, and economic impact of
implementing RACT controls on bulk gasoline plants in Georgia.
A rating scheme is presented in this section indicating
quality of the data available for use in this study. A
rating of "A" indicates hard data (i.e., data that are
published for the base year); "B" indicates data that were
extrapolated from hard data; and "C" indicates data that
were not available in secondary literature and were estimated
based on interviews, analyses of previous studies, and best
engineering judgment. Exhibit 14-1, on the following page,
rates each study output listed and the overall quality of
the data.
14-6
-------
Exhibit 14-1
U.S. Environmental Protection Agency
DATA QUALITY
B	C
A	Extrapolated Estimated
Study Outputs	Hard Data	Data	Data
Industry statistics
Emissions
Cost of emissions
control
Statewide costs of
emissions
Economic impact
Overall quality of
data
Source: Booz, Allen & Hamilton, Inc.
-------
14.2 INDUSTRY STATISTICS
Industry characteristics, statistics, and business
trends for bulk gasoline plants in Georgia are presented
in this section. The discussion includes a description of
the number of facilities and their characteristics, a com-
parison of the size of the bulk gasoline plant industry to
state economic indicators, a historical characterization and
description of the industry, and an assessment of future
industry patterns. Data in this section form the basis for
assessing the impact on this industry of implementing RACT
guidelines to VOC emissions from bulk gasoline plants in
Georgia.
14.2.1 Size of the Industry
There were an estimated 35 bulk gasoline plants, as
of 1977, in the 12 counties in Georgia. Industry sales
were in the range of $27 million, with an estimated yearly
throughput of 64.11 million gallons of gasoline. The
estimated number of employees in 1977 was 209. These data
and the sources of .information are summarized in Exhibit 14-2,
on the following page. Annual capital investments have not
been estimated. In general, bulk plant capital investments
are for plant and equipment to replace worn-out facilities,
modernize the establishments, or improve operating effi- ¦
ciencies.
14.2.2 Comparison of the Industry to the State Economy
A comparison of the bulk gasoline plant industry in
the 12 counties to the economy of the State of Georgia
is shown in this section by comparing industry statistics
to state economic indicators. Employees in the affected
bulk gasoline plant industry represent less than 0.01
percent of the total state civilian labor force of Georgia.
The value of gasoline sold from the 35 bulk plants repre-
sented less than one percent of the total value of whole-
sale trade in Georgia in 1977.
14.2.3 Characterization of the Industry
Bulk plants are an intermediate distribution point in
the petroleum product marketing network as shown in
Exhibit 14-3, following Exhibit 14-2. Bulk gasoline plants
compete with bulk gasoline tank terminals and large retail
14-7
-------
Exhibit 14-2
U.S. Environmental Protection Agency
INDUSTRY STATISTICS FOR BULK GASOLINE
PLANTS IN GEORGIA
Number of
Establishments
Number of
Employees
Sales
($ Million, 1977)
Gasoline Sold
(Millions of Gallons)
35a
209b
21°
46'
a
a.	Data provided by Georgia Department of Natural Resources, Environ-
mental Protection Division.
b.	Booz, Allen & Hamilton estimate based on the ratio of the number '
of employees to the number of establishments in 1972.
c.	Number of gallons of gasoline throughput in 1977 multiplied
by the national dealer tankwagon price in 1977 (42.51C/gallon),
National Petroleum News Fact Book, 1978.
Source: Booz, Allen & Hamilton Inc.
-------
Exhibit 14-3
U.S. Environmental Protection Agency
GASOLINE DISTRIBUTION NETWORK
SMALL
VOLUME
ACCOUNTS
AGRICULTURAL
COMMERCIAL
RETAIL



CUSTOMER
PICK-UP
O
o
-*• Typical delivery route of truck-trailer
Typical delivery route of account truck
-+~ Typical transaction with consumer coming to supplier
Final Product Usage
Source: "Economic Analysis of Vapor Recovery Systems on Small
Bulk Plants," EPA 340/1-77-013, September 1976, p. 3-2.
-------
gasoline outlets. Ownership and operation of bulk plants
are predominantly by independent jobbers and commissioned
agents but also include cooperatives and salaried employees.
The independent jobber owns the equipment and structures
at his bulk plant, the inventory, and rolling stock, and
he contracts directly with the oil company for gasoline. A
commissioned agent usually does not own the equipment and
facilities but operates the bulk plant for a major integrated
oil company.
The maximum daily throughput of a bulk gasoline plant
ranges from less than 2,000 gallons per day up to 20,000
gallons per day. Exhibit 14-4, on'the following page, shows
the distribution of bulk gasoline plants by plant throughput
in the 12 counties in Georgia.
It is estimated that the majority of the bulk gasoline
plants are up to 25 years old, with a few new modernized,
higher volume plants. Forty years ago, bulk gasoline plants
were a major link in the gasoline distribution network.
From that time, their importance has been declining in the
marketing sector of the petroleum industry, basically for
economic reasons. There is evidence that profitability in
bulk gasoline plants has been decreasing. The number of
bulk gasoline plants decreased by 11 percent nationally
from 1967 to 1972 and is predicted to continue declining
in the near term.l- This decline is largely attributable to
major oil companies disposing of commission-agent-operated
bulk plants.
1. National Petroleum News Fact Book, 1976.
14-8
-------
Exhibit 14-4
U.S. Environmental Protection Agency
DISTRIBUTION OF BULK GASOLINE PLANTS
BY AMOUNT OF THROUGHPUT
Gasoline
Throughput
(gallons per day)
Less than 2,000
2,000 to 3,999
4,000 to 5,999
6,000 to 7,999
8,000 to 9,999
10,000 to 11,999
12,000 to 13,999
14,000 to 15,999
16,000 to 17,999
18,000 to 20,000
Percentage
of Plants
14
11
17
40
6
3
3
6
0
0
Source: Georgia Department of Natural Resources.
-------
14.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents information on bulk gasoline
plant operation, estimated VOC emissions from bulk gasoline
plant operations in the 12 counties in Georgia, the extent
of current control in use, the requirements of vapor control
required by RACT and the likely RACT alternatives which may
be used for controlling VOC emissions from bulk gasoline
plants in Georgia.
14.3.1 Bulk Gasoline Plant Operations
Bulk gasoline plants are typically secondary distribu-
tion facilities which receive gasoline from bulk gasoline
tank terminals by trailer-transport trucks; store it in
above-ground storage tanks; and subsequently dispense it
via account trucks to local farms, businesses and service
stations. Bulk gasoline plant operations" are discussed
in detail in Control of Volatile Organic Emissions from
Bulk Gasoline Plants, EPA 450/2-77-035.
14.3.2 Emissions and Current Controls
This section presents the estimated VOC emissions from
bulk gasoline plants in the 12 counties in Georgia in 1977.
Exhibit 4-5, on the following page, shows the total
estimated emissions in tons per year from bulk plants in
Georgia. The estimated VOC emissions from the 35 bulk
plants are 733 tons per year.
It was assumed that 50 percent of loading facilities
in the 12 affected Georgia counties are currently equipped
with submerged loading equipment and that 50 percent are
equipped with top-load splash-fill loading equipment based
on data provided by the Georgia Department of Natural
Resources, Environmental Protection Division.
14.3.3 RACT Guidelines
The RACT guidelines for VOC emission control from
bulk gasoline plants require the following control systems:
Top submerged or bottom fill of gasoline storage
tanks and outgoing account trucks
Vapor balancing between the incoming trailer-
transport truck and the gasoline storage tank
14-9
-------
Exhibit 14-5
U.S. Environmental Protection Agency
VOC EMISSIONS FROM BULK GASOLINE
PLANTS IN GEORGIA
Number of	Estimated	Average Daily
Facilities Number of Tanks	Throughput	Total Emissions
(tons/year)
35	107	256,437	733
Source: Georgia Department of Natural Resources, Environmental Protection
Division.
-------
Vapor balancing between the gasoline storage
tank and the outgoing account truck
Proper operation and maintenance of equipment.
Exhibit 14-6, on the following page, summarizes the RACT
guidelines for VOC emissions control from bulk gasoline
plants.
14.3.4 Selection of the Most Likely RACT Alternatives
Control of VOC emission from bulk gasoline plants is
achieved using submerged or bottom fillinq of storage tanks
and account trucks; and vapor balancing between the loading
and unloading of incoming and outgoing trailer-transport
trucks and the gasoline storage tanks. There are several
alternative means of achieving vapor control at bulk gasoline
plants, based on the manner in which the bulk plant is
operated.
Three likely control alternatives, summarized in
Exhibit 14-7, following Exhibit 14-6, are discussed separ-
ately in the paragraphs which follow.
14.3.4.1 Alternative I
Control Alternative I involves converting existing
top loading bulk plants to top submerged loading and equip-
ping the bulk plant with a vapor balancing system. In detail,
this control alternative implies:
Submerged filling of gasoline storage tanks
Vapor balancing between the incoming trailer-
transport truck and the gasoline storage tank
Submerged top loading of outgoing account trucks
Vapor balancing of gasoline storage tank and
outgoing account truck
Equipping account trucks with vapor balancing
connections.
It is estimated that most of the bulk plants in Georgia
would select Control Alternative I to achieve vapor recovery
to meet the state RACT requirements. During interviews, the
14-10
-------
EXHIBIT 14-6
U.S. Environmental Protection Agency
VOC EMISSION CONTROL TECHNOLOGY FOR
BULK GASOLINE PLANTS
Facilities
Affected
Bulk plants with
daily throughputs
of 76,000 liters
(20,000 gallons)
of gasoline or less
Sources of
Emissions
Vapor displacement
from filling ac-
count trucks, and
breathing losses
and working losses
from storage tanks
RACT Control
Guideline
Submerge filling and
vapor balancing:
. Vapor balancing of
transport truck and
storage tank
. Vapor balancing of
storage and
account truck
Cracks in seals
and connections
Improper hook up
of liquid lines
and top loading
nozzles
Truck cleaning
Pressure vacuum
relief valves
Proper operation
maintenance
Proper operation
maintenance
Proper operation
maintenance
Proper operation
maintenance
Source: Control of Volatile Organic Emissions from Bulk Gasoline
Plants, EPA-450/2-77-035.
-------
Exhibit 14-7
U.S. Environmental Protection Agency
ALTERNATIVE CONTROL METHODS
FOR VAPOR CONTROL AT BULK GASOLINE PLANTS
Description of
Alternative Number
Control Method
I
Convert existing top filled
plant to top submerged
filling and vapor balance
entire system
II
Vapor balance existing
bottom filled bulk
plant
III
Convert top filled bulk
plant to bottom filled,
and vapor balance total
system
Source: Booz, Allen & Hamilton analysis of Control of Volatile
Organic Emissions from Bulk Gasoline Plants
-------
industry has questioned whether vapor recovery by this con-
trol method will achieve 90 percent emissions recovery as
stated in the RACT guidelines.
14.3.4.2 Alternative II
Control Alternative II involves implementing a complete
vapor balancing system on bulk plants which currently operate
with bottom filling. In detail this control alternative
encompasses:
Vapor balancing between the incoming trailer-
transport truck and the gasoline storage tank
Vapor balancing between the gasoline storage tank
and the outgoing account truck
Modification of account trucks to accommodate a
vapor recovery connection.
14.3.4.3 Alternative III
Control Alternative III involves converting top loading
bulk gasoline plants to bottom filling and implementing a
complete vapor balancing system. In detail, this control
alternative entails:
Converting the loading rack to bottom filling
Converting storage tank loading to bottom filling
Vapor balancing the incoming trailer-transport
truck and the gasoline storage tank
Converting the account truck to bottom loading and
installing vapor balancing connections on the
account truck.
The additional cost of converting a bulk plant from
top filling to bottom filling makes Control Alternative III
more costly than Control Alternative I. This additional
cost may be attributable to improved bulk plant operations,
according to U.S. EPA.
14-11
-------
14.4 COST AND HYDROCARBON REDUCTION BENEFIT EVALUATIONS
FOR THE MOST LIKELY RACT ALTERNATIVES
Costs for VOC emission control equipment are presented
in this section. The costs for the three alternative con-
trol systems described in Section 14.3 are described
individually, followed by costs for typical bulk plants.
The final section then presents a projection of typical
bulk gasoline plant control costs to the industry in the
12 counties in Georgia.
14.4.1 Costs for Alternative Control Systems
The costs for the three alternative control systems
(summarized in Exhibit 14-8, on the following page) were
derived from analysis of the RACT guidelines, from
interviews with bulk plant operators and petroleum marketing
trade associations and from previous cost and economic
studies of small bulk plants.
Control Alternative I is expected to be the most widely
applied system for bulk plants in Georgia since it is assumed
that most bulk gasoline plants in Georgia employ top loading.
The U.S. EPA currently endorses the cost estimates developed
by Pacif-ic Environmental Services, Inc. for the Houston/
Galveston area bulk plants. However, several large volume
bulk plant operators who were interviewed have reported
vapor control costs in excess of $50,000 which included
conversion of the loading rack to bottom filling.
Control Alternative II is similar in cost to Control
Alternative I. Bulk plants which may currently bottom fill
must equip their plants with vapor balancing to comply
with RACT.
Control Alternative III is the most costly control
system. Several bulk gasoline plant operators interviewed
in California and Maryland have adopted this system, although
it cannot be shown from the data in Georgia that any bulk
gasoline plant operator in Georgia would be willing to imple-
ment a system this costly. This alternative, therefore, is
not included in the determination of vapor control costs to
the statewide industry in the next section.
14-12
-------
Exhibit 14-8
U.S. Environmental Protection Agency
COSTS OF ALTERNATIVE VAPOR CONTROL SYSTEMS
Cost Estimate
Alternative
I
National Oil
Jobbers Council
estimate
1 truck (4-com-
partments)
1 loading rack
(3 arms)
Alternative
II
Alternative ¦
III
(Includes conversion
to bottom filling)
Similar to costs 1 truck (4-com-
for alternative partments)
I
1 loading rack
(3 arms)
3-inch system
Pre-set meters
Direct Cost
(no labor)
$20,524 (with-
out air)
$22,754 (with
air)
3-inch system
Pre-set meters
Direct cost
(No labor)
$27,729
Pacific Environ-
mental Services
estimate of
Houston/Galveston 1 loading rack
area system
Meters
Wiggins system
Average in-
stalled cost
$3,200 (without
metering)
$7,700 (with
metering)
1 truck 4-com-
partments)
1 loading rack
(4 arms)
Pre-set meters
Installed cost
Source: National Oil Jobbers Council, Pacific	$17,352-
Environmental Services Inc., Wiggins	$18,416
Division, Delaware Turbines, Inc.
-------
14.4.2 Costs for Two Model Bulk Plants
Two model bulk plants and their associated vapor control
costs are characterized in this section. The costs are
based on the control estimates for Control Alternative I,
reported by Pacific Environmental Services, Inc. for bulk
plants in the Houston/Galveston area. Several other bulk
plant operators have reported costs in excess of $50,000
for vapor control systems although these cost estimates
exceed the level of control required to meet the RACT
requirements.
Exhibit 14-9, on the following page, defines two model
bulk plant characteristics and associated control costs.
It is assumed that approximately 90 percent of the bulk
plants-in Georgia can be characterized by Model Plant A; the
remaining 10 percent are assumed to be characterized by Model
Plant B.
The costs for the model plants are used in section 14.4.3
to determine costs of vapor control equipment to the
industry in 12 affected counties in Georgia. The costs for
each model plant are:
Installed capital cost, which includes parts
and labor
Annualized direct operating costs, expected to be
3 percent of installed capital costs, including
costs for labor, utilities, recordkeeping, and
training costs
Annualized capital charges, estimated to be 25 per-
cent of installed capital costs, including costs
for depreciation, interest, maintenance, taxes,
and insurance
Net annualized operating costs, which are the sum
of the capital charges and direct operating costs.
It should be noted that gasoline credit has not
yet been accounted for. Gasoline credit will be
taken into account when the costs are determined
for the industry.
Another cost characterization that can be made is hydro-
carbon reduction versus cost. This finding will also be
shown in the statewide analysis.
14-13
-------
Exhibit 14-9
U.S. Environmental Protection Agency
DESCRIPTION AND COST OF MODEL BULK PLANTS
EQUIPPED WITH VAPOR CONTROL SYSTEMS
Bulk Plant
Characteristics
Throughput
Loading racks
Storage tanks
Account trucks
Compartment per account
truck
Vapor control system
Model Bulk
Plant A
2,500 gallons/day
1
3
2
Model Bulk
Plant B
13,000 gallons/day
1
3
4
Alternative I
Alternative I
Bulk Plant-
Costs
Installed capital cost
Annualized direct operating
costs @ 3 percent of
installed cost
Annualized capital
charges @ 25 percent
of installed capital
cost
Net annualized cost
(not including gasoline
credit)
$13,700
411
3,425
3,836
$19,700
591
4,925
5,516
a. Cost to modify one 4-compartment account truck estimated
to be $3,000.
Source: Booz, Allen & Hamilton, Inc.
-------
14.4.3 Costs to the 12 Countywide Industry
Exhibit 14-10, on the following page, shows the vapor
recovery costs to the 12 countywide industry in Georgia.
The estimates are based on the following assumptions:
Ninety percent of the bulk gasoline plants in
these counties can be characterized by Model
Plant A and the remaining can be characterized
by Model Plant B
All bulk plants will implement the Control Alter-
native I vapor control system to comply with RACT.
Actual costs to bulk plant operators may vary depending on
the type of control alternative and manufacturer's equipment
selected by each bulk plant operator.
Based on the above assumptions, the total cost to the
industry affected for installing vapor recovery equipment
is estimated to exceed $500,000. The amount of gasoline
prevented from vaporizing using vapor control is valued
at approximately $9,200. Approximately ten percent of
total emissions can be credited to the bulk plant since
installation of vapor control equipment will reduce the
amount of vaporization by approximately 10 percent. The
annual cost per ton of emissions controlled is estimated
to be $2 25 per ton.
The statewide costs of vapor control systems by size of
bulk gasoline plant are analyzed and arrayed in Exhibit 14-11.
It is noted that bulk plants with throughput less than 4,000
gallons per day achieve only 10 percent reduction in overall
emissions yet bear over 25 percent of the annual cost of
hydrocarbon emission control.
14-14
-------
Exhibit 14-10
U.S. Environmental Protection Agency
GEORGIA COSTS OF VAPOR CONTROL
SYSTEMS FOR BULK GASOLINE PLANTS
IN THE 12 COUNTY AREA
Characteristics/Cost Item
Number of facilities
Total annual throughput
(millions of gallons)
Uncontrolled emissions
(tons/year)
Emission reduction
(tons/year)
Net emissions
(tons/year)
Installed capital
($, 1977)
Direct annual operating
cost ($, 1977)
DATA
35
64
733
586
147
503,000
15,000
Annualized capital charges
($, 1977)
Annual gasoline credita¦
($, 1977)
Net annualized cost
($, 1977)
Annualized cost per ton of
emissions reduced
126,000
9,200
132,000
225
a. Based on 10 percent of emission reduction accrued to bulk
plants at 40£ per gallon
Source: Booz, Allen & Hamilton, Inc.
-------
Current	Estimated
Estimated	Annual VOC
Bulk Plant Gasoline Percentage Annual VOC	Emissions After
Thioucjhput of Plants Emissions	RACT Control
(yallons per day)	(tons per year) (tons per year)
Less than 2,000	]4	24	5
2,000 - 3,999	11	48	10
4,000 - 5,999	17	104	21
6,000 - 7,999	40	326	65
0,000 - 9,999	6	56	11
10,000 - 11,999	3	37	7
12,000 - 13,999	3	40	8
14,000 - 15,999	6	98	20
Source: Booz, Allen & Hamilton, Inc.
Exhibit 14-11
U.S. Environmental Protection Agency
STATEWIDE COSTS OF VAPOR CONTROL
SYSTEM BY SIZE OF BULK GASOLINE PLANT
Net
VOC Emission
Reduction
(tons per year)
Percentage
of Total VOC
Emissions
Reduced
Estimated
Annual Cost
(S millions, 1977)
Percent of
Total Annual
Cost
Net Hydrocaibon
Cost
Effectiveness
/ $, 1977	\
\tons per year/
19
38
83
261
45
30
32
78
3.2
6.5
14.2
44. 5
7.7
5.1
5.5
13.3
18,055
14,444
21,666
50,554
7,223
4.970
4.971
9,941
14
11
16
38
5
4
4
8
950
380
261
194
161
166
155
127
-------
14.5 DIRECT ECONOMIC IMPLICATIONS
This section presents the direct economic implications
of implementing RACT controls to the industry, in the 12
counties in Georgia, including availability of equip-
ment and capital; feasibility of the control technology;
and impact on economic indicators, such as value of ship-
ments, unit price (assuming full cost passthrough), state
economic variables and capital investment.
14.5.1 RACT Timing
The Georgia deadline for implementing RACT guideline
control requirements is July l, 198 2. This requires that
bulk gasoline plant operators must have vapor control equip-
ment installed and operating within the next three years.
The timing requirements of RACT impose several requirements
on bulk plant operators including:
Determining appropriate vapor control system
Raising capital to purchase equipment
Generating sufficient income from current opera-
tions to pay the additional annual operating
costs incurred with vapor control
Acquiring the necessary vapor control equipment
Installing and testing vapor control equipment
to insure that the system complies with RACT.
The sections which follow discuss the feasibility and the
economic implications of implementing RACT within the
required timeframe.
14.5.2 Feasibility Issues
Technical and economic feasibility issues of implement-
ing RACT controls are discussed in this section.
Several bulk plants in the U.S. have attempted to
implement vapor control systems with varying degrees of
success. One bulk plant operator interviewed in Maryland
implemented vapor recovery at a cost of $65,000 in 1974.
The operator indicated that recent tests have shown the
system operates well within the 90 percent recovery require-
ment of RACT. This particular bulk plant was converted to
14-15
-------
bottom filling and completely vapor balanced. The plant's
throughput was 20,000 gallons per day and included one
loading rack and three account trucks. This plant would be
characterized as installing a sophisticated Alternative III
control system. The plant is also operated by a major oil
company, so capital availability problems were not similar
to a small, independently owned bulk plant.
Bulk plants in tne Houston/Galveston area, on the con-
trary, have implemented "bare bone" type control systems that
were individually designed and installed at a bulk plant
which was owned by a major oil company. No emission data
are available to verify whether these systems are in com-
pliance, but U.S. EPA estimates that these control systems
are sufficient to meet the requirements of RACT. These
systems are not marketed by any equipment manufacturer;
therefore, their availability for widespread application is
doubtful at the present time.
State adoption of RACT regulations will generate a demand
for economical vapor control systems for bulk gasoline plants.
There may be a shortage of off-the-shelf systems in the next
three years since the Houston/Galveston type systems have
not yet been fullv demonstrated.
A number of economic factors are involved in determining
whether a specific bulk plant operator will be able to
implement vapor control systems and still remain profitable.
These include:
Degree of competition
Ability to pass on a price increase
The current profitability of the plant
Age of the plant
State of repair of the plant
Ownership—major oil company or private individual.
It is estimated that small bulk plants, with throughput
than 3,500 gallons per day, will experience a direct
increase of nearly 0.5 cents per gallon if they imple-
RACT. This will affect an estimated 15 percent of the
plants in the state.
The key to the direct economic impact will be the
ability of a bulk plant operator to pass on up to a 0.5
cent increase in the price of gasoline to customers
(assuming a full cost passthrough). One small bulk plant
operator in Missouri reported during an interview that his
less
cost
ment
bulk
"14-16
-------
profit margin per gallon of gasoline is 4 to 5 cents per
gallon. His net profit margin is 0.5 cent per gallon.
This operator stated that he plans to discontinue operations
rather than comply with RACT. Again, sufficient data are
not available to determine if this would be typical of small
bulk plants in the state. In a previous study of the econ-
omics of vapor recovery for small bulk plants, a trend of
declining profitability in bulk plant operations was identi-
fied.1 If this trend continues, vapor control systems may
not be affordable at marginal plants. Many bulk plants now
operate at a profit only because their plants are fully
depreciated. In the same study it was also determined that
a large percentage of small bulk plants may not be able to
raise sufficient capital to purchase vapor control equipment.
Furthermore, it is estimated that the price of vapor control
systems is likely to increase in the future at a rate greater
than the GNP. One bulk plant operator stated that prices
for vapor control have risen 30 percent over the past three
years. It is therefore predicted that the industry decline
will continue and that some bulk plant operators will cease
operations because of their present financial condition and
the additional financial burden of the RACT requirements.2
The paragraphs which follow compare statewide compliance
costs of RACT control, in 1977 dollars, to various economic
indicators.
14.5.3 Comparison of Direct Cost With Selected Direct
Economic Indicators
This section presents a comparison of the net increases
in the annual operating cost of implementing RACT with the
total value of gasoline sold in the state, and the unit
price of gasoline.
The net increase in the annual operating cost to the
bulk gasoline plants due to RACT represents 0.48 percent of
the total gasoline sold from bulk plants in the affected 12
counties in the state. The impact on the unit price of
gasoline varies with the bulk plant throughput. As
discussed in the preceding section, the small bulk plants
1.	Economic Analysis of Vapor Recovery Systems on Small Bulk
Plants, EPA 340/1-77-013, September 1976.
2.	Interview with Mr. Harrison Bray, Georgia Oilmen's Association,
Atlanta, Georgia.
14-17
-------
may experience a direct cost increase of up to 0.5 cent per
gallon of gasoline sold, whereas the large bulk plants may-
experience a much smaller direct cost increase.
14-18
-------
14.6 SELECTED SECONDARY ECONOMIC IMPACTS
This section discusses the secondary impact of imple-
menting RACT on employment, market structure, and productiv-
ity.
For bulk gasoline plants that comply with the RACT
requirements, no additional manpower requirements are
expected. Overall bulk gasoline plant industrial sector
employment is expected to continue to decline since the
number of bulk gasoline plants operating in the state is
forecast to decline.. Based on the statewide estimates of
number of employees and number of bulk plants, an average
of approximately 6 jobs will be lost with the closing
of a bulk plant. No estimate was made of the number of
bulk plants that may close due to RACT.
The impact on the market structure for bulk plants
differs significantly in urban and rural areas. The
importance of bulk plants in the urban areas is declining
because of competition from retailers and tank truck
terminals and will continue to decline regardless of RACT
requirements.
In rural areas, the bulk plants serve as a vital link
in the gasoline distribution network, since large trailer
transport trucks cannot be accommodated by many rural roads
serving the farm accounts. It is estimated that approximately
60 percent of the customers served by the small bulk plants
in the rural areas are farm accounts, which could be severely
impacted if the small bulk plants are forced out of business.
However, in Georgia the bulk gasoline plants that would be
required to meet the RACT requirements are in the 12 county
non-attainment area (primarily metropolitan Atlanta). The
increased operating cost of complying with RACT may
create market imbalance if the compliance cost cannot be
passed on to the market place in terms of a price increase
(i.e., the market structure could tend to concentrate further)
Bulk plants not equipped with vapor control equipment may
not be able to serve gasoline service stations equipped with
vapor control equipment due to incompatible hardware con-
figurations. A uniform policy, therefore, is necessary so
that market disruptions due to equipment incompatibility
are minimized. In Georgia service stations in the 12
county non-attainment area also will require vapor balance
systems. In addition to the bulk gasoline plants identified
in this chapter, there are likely to be some additional plants
outside this area serving service stations with control
systems.
14-19
-------
However, some vapor control systems may decrease plant
productivity if flow rates substantially decline, requiring
longer times to load and unload trucks.
* * * *
Exhibit 14-12, on the following page, presents a summary
of the findings of this report.
14-20
-------
Current Situation
Exhibit 14-12
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS L.
IMPLEMENTING RACT FOR
BULK GASOLINE PLANTS IN GEORGIA
Discussion
Number of potentially affected
facilities
35
Indication of relative importance
of industrial sector to state
economy
Current industry technology tends
1977 affected industry sales were $27
million, with annual throughput of 0.064
billion gallons.
Only small percent of industry has new/
modernized plants
1977 VOC actual emissions
730 tons per year
Industry preferred method of VOC
control to meet RACT guidelines
Bottom fill and vapor balancing (cost analysis
reflects top submerged fill, not bottom fill)
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Discussion
Energy
Productivity
Employment
Market structure
Problem area
VOC emission after control
Cost effectiveness
$500,000
$130,000 (approximately 0.45 percent of
value of shipments from those facilities affectec
Assuming a "direct cost pass-through"
12 county-wide—$0.0048 per gallon increase
Small operations—$0,005 to $0.01 per
gallon increase
Assuming full recovery of gasoline—net savings
of 4,000 barrels annually
No major impact
No direct impact; however for plants closing,
potential average of 6 jobs lost per plant
closed
Regulation could further concentrate a declining
industry. Many small bulk gas plants today are
marginal operations; further cost increase
could result in some plant closings
Severe economic impact for small bulk plant
operations. Regulation could cause further
market imbalances. Technical control feasi-
bility of cost effective alternatives has not
been effectively demonstrated
150 tons per year
$225 annualized cost/annual ton of
VOC reduction
Source: Booz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
Georgia Department of Natural Resources, Environmental
Protection Division, Emissions Inventory.
National Petroleum News Fact Book, 1967, McGraw Hill,
Mid-May 1976.






National Petroleum
News
Fact
Book,
1977 ,
McGraw
Hill,
Mid-May 1977.






National Petroleum
News
Fact
Book,
1978,
McGraw
Hill,
Mid-June 1978.
Economic Analysis of Vapor Recovery Systems on Small Bulk
Plants, EPA 340/1-77-013, September 1976.
Stage I Vapor Recovery and Small Bulk Plants in Washington,
D.C., Baltimore, Maryland, and Houston/Galveston, Texas,
EPA 340/1-77-010, April 1977.
Evaluation of Top Loading Vapor Balance Systems for Small
Bulk Plants, EPA 340/1-77-014, April 1977.
Regulatory Guidance for Control of Volatile Organic Compound
Emissions from 15 Categories of Stationary Sources, EPA 905/
2-78-001, April 1978.
Systems and Costs to Control Hydrocarbon Emissions from
Stationary Sources, PB-236 921, Environmental Protection
Aqency, September 1974.
Control of Volatile Organic Emissions from Bulk Gasoline
Plants, EPA 450/2-77-035, December 1977.
Memorandum, "Meeting with EPA and Others on Bulk Plant
Vapor Recovery," National Oil Jobbers Council,
Mr. Bob Bassman, Counsel, March 21, 1978.
Letter to Mr. William F. Hamilton, Economic Analysis
Branch, United States Environmental Protection
Agency, from California Independent Oil Marketers
Association, February 28, 1978.
Private conversation with Mr. Clark Houghton, Missouri
Bulk Plant Operator.
Private conversation with Mr. D. L. Adams, Phillips
Petroleum, Towson, Maryland.
-------
Private conversation with Mr. Robert Schuster, bulk
plant operator in Escondido, California.
Private conversation with Mr. Burton McCormick, bulk
plant operator in Santa Barbara, California.
"The Lundburg Letter," Pele-Drop, North Hollywood,
California.
"1978 Marketing Directory and Yearbook," Michigan Petroleum
Association, 1978
Private conversation with Mr. William Deutsch, Illinois
Petroleum Marketers Association, Springfield, Illinois.
Bray, Georgia Oilmen's Assoication, Atlanta Georgia.
-------
15.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
STORAGE OF PETROLEUM
LIQUIDS IN FIXED-ROOF
TANKS IN THE STATE OF
GEORGIA
-------
15.0 THE ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR STORAGE OF PETROLEUM LIQUIDS IN
FIXED-ROOF TANKS IN THE STATE OF GEORGIA
This chapter presents a detailed analysis of the impact
of implementing RACT controls for the storage of petroleum
liquids in fixed-roof tanks. The RACT guidelines will apply
to all fixed-roof storage tanks with greater than 40,000
gallons capacity in the following 12 counties which are
part of urban non-attainment areas:
Clayton
Cobb
Coweta
DeKalb
Douglas
Fayette
Fulton
Gwinnett
Henry
Muscogee
Paulding
Rockdale
and to facilities in the remainder of the state that have
potential VOC emissions over 100 tons annually. The major
sections of the chapter include:
Specific methodology and quality of estimates
Technical characteristics of fixed-roof tanks for
storing petroleum liquids
Profile of statewide fixed-roof tank industry and
estimated annual VOC emissions
Cost of controlling VOC emissions
Economic impact.
Each section presents detailed data and findings based
on analyses of the RACT guidelines, previous studies of
fixed-roof storage tanks, interviews with industry repre-
sentatives and analysis.
15-1
-------
15.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining:
Technical characteristics of fixed-roof tanks
Profile of fixed-roof tanks
VOC emissions
Cost of vapor control systems
Economic impact of emission control for the stor-
age of petroleum liquids in fixed-roof tanks.
The quality of these estimates is discussed in the last
part of this section.
15.1.1	Technical Characteristics of Fixed-Roof Tanks
The technical characteristics of fixed-roof tanks and
processes for controlling th<§ir emissions were obtained
mainly from the RACT guideline entitled Control of Volatile
Organic Emissions from Storage of Petroleum Liquids in
Fixed-Roof Tanks. EPA-4 501/2-77-036, and from several other
studies of fixed-roof tanks listed in the reference section
of this report.
•
15.1.2	Profile of Fixed-Roof Tanks
The Georgia Department of Natural Resources provided a
listing of all fixed-roof tanks greater than 40,000-gallon
capacity used for storing petroleum liquids in the 12-
county urban non-attainment areas and a listing of all fixed-
roof tanks with the potential for greater than 100 tons per
year VOC emissions in the remainder of the state. The
capacity of each tank, the type of petroleum liquid stored,
and for some facilities, the annual throughput, were pro-
vided. Where not available, the annual throughput was
calculated based on an assumed turnover rate of 2 5 cycles
per year.
1 Based on throughput data for fixed-roof tanks in the State of
Kentucky, supplied by Kentucky Department of Natural Resources
and Environmental Protection.
15-2
-------
15.1.3 VOC Emissions
Statewide VOC emissions were provided for petroleum
liquids stored in fixed-roof tanks in Georgia by the Georgia
Department of Natural Resources, or calculated based on
the emission factors for working and breathing losses of
various types of petroleum liquids. The emission factors
were obtained from Revision of Evaporative Hydrocarbon
Emission Factors, EPA-450/3-76-039.
15.1.4 Cost of Vapor Control Systems
The costs of vapor control systems were developed by:
Determining the type of control system
Developing installed capital costs for each tank
Developing total annual costs of control systems
for the number of tanks in the state including:
Installed capital cost
Direct operating costs
Annual capital charges
Petroleum liquid credit
Net annual cost
Aggregating costs to the total industry in Georgia.
Costs were determined from analyses of the following
studies:
Control of Volatile Organic Emissions from Storage
of Petroleum Liquids in Fixed-Roof Tanks,
EPA 450/2-77-036
Benzene Emission Control Costs in Selected Segments
of the Chemical Industry, prepared for Manufactur-
ing Chemists Association by Booz, Allen & Hamilton
Inc., June 12, 1978
and from interviews with oetroleum marketers' associations,
Detrochemical manufacturers and vaDor control eauiDment manu-
facturers .
15-3
-------
The extrapolation of the estimated cost of control to
Georqia required a profile of fixed-roof tanks for storing
petroleum liquids for the state, showing the capacity of
each tank. These data were provided by the Georqia Depart-
ment of Natural Resources for fixed-roof tanks affected by
RACT guidelines.
15.1.5 Economic Impact of Emission Control
The economic impact of emission control for equipping
fixed-roof tanks used for storing petroleum liquids can
be determined only in terms of the statewide cost of con-
trols. Since several industries use fixed-roof tanks,
economic impacts on individual industries depend on the ex-
tent to which the industries must bear the increased cost.
The economic impact analysis in this report is, therefore,
limited to estimating statewide costs of controls and quali-
tatively assessing the potential impacts of these costs on
various industries.
15.1.6 Quality of Estimates
Several sources of information were utilized in assess-
ing the emissions, cost and economic impact of implementing
RACT controls for fixed-roof tanks in Georgia. A rating
scheme is presented in this section to indicate the quality
of the data available for use in this study. A rating of
"A" indicates hard data (i.e., data that are published for
the base year); "B" indicates data that were extrapolated
from hard data; and "C" indicates data that were not avail-
able in secondary literature and were estimated based on
interviews, analyses of previous studies and best engineer-
ing judgment. Exhibit 15-1, on the following page, rates
each study output listed and the overall quality of the
data.
15-4
-------
EXHIBIT 15-1
Study Outputs
Industry statistics
Emissions
Cost of emissions
control
Statewide costs of
emissions
Economic impact
Overall quality of
data
Source: Booz, Allen & Hamilton Inc.
U.S. Environmental Protection Agency
DATA QUALITY
B	C
A	Extrapolated Estimated
Hard Data	Data	Data
-------
15.2 TECHNICAL CHARACTERISTICS OF AND RACT GUIDELINES FOR
FIXED-ROOF TANKS FOR STORING PETROLEUM LIQUIDS
The technical characteristics of fixed-roof tanks for
storing petroleum liquids, the sources and types of VOC
emitted by these tanks, the control measures for reducing
VOC emission from fixed-roof tanks are described in the EPA
guidelines series, Control of Volatile Organic Emissions
from Storage of Petroleum Liquids in Fixed-Roof Tanks, EPA-
450/2-77-036.
The RACT guidelines call for installation of an inter-
nal floating roof for fixed-roof tanks storing greater than
40,000 gallons of petroleum liquids with a true vapor pres-
sure that exceeds 1.52 psi. The guidelines do not apply to
storage tanks equipped with external floating roofs or to stor-
age tanks having capacities less than 425,000 gallons used
to store crude oil.
It is expected that the State of Georgia will prepare
legislation for the storage of petroleum liquids which is
modeled after the RACT guidelines.
15-5
-------
15.3 PROFILE OF FIXED-ROOF TANKS FOR STORING PETROLEUM
LIQUIDS AND ESTIMATED VOC EMISSIONS
This section contains a profile of fixed-roof tanks
used for storing petroleum liquids having a true vapor
pressure of greater than 1.52 at 100°F in the State of
Georgia, and the estimated annual VOC emissions from these
tanks.
The Georgia Department of Natural Resources compiled
a list of fixed-roof tanks from their emissions inventory.
The capacity of each tank and the type of petroleum liquid
stored were provided in the listing. In summary, there are
approximately 27 fixed-roof tanks with greater than 4 0,000
gallon capacity not equipped with an internal floating roof
in the 12-county non-attainment areas, and an additional
4 large tanks with the potential for VOC emissions greater
than 100 tons per year in the remainder of the state.
The total storage capacity of these tanks is 21.8
million gallons and the annual throughput of petroleum
liquid is estimated to be 455 million gallons.
It is estimated that annual VOC emissions from the
storage of petroleum liquids in fixed-roof tanks affected
by RACT guidelines are 2,37 6 tons per year.
It is further estimated that these emissions could be
reduced by 90 percent or to 238 tons per year by implementing
RACT in Georgia.
15-6
-------
15.4 COST OF CONTROLLING VOC EMISSIONS
This section presents a cost analysis of equipping
fixed-roof tanks used for storing petroleum liquids with
internal floating roofs as a means for controlling VOC
emissions.
The cost factors for emission control include:
Installed capital cost, including parts and labor
Annual capital charges, estimated to be 25
percent of installed capital cost including costs
for depreciation, interest, maintenance, taxes,
and insurance
Annualized direct operating costs, estimated to be
two percent of installed capital cost including
costs for inspection and recordkeeping
Annual petroleum liquid credit, calculated by
multiplying emission reduction by the volume of
the petroleum liquid divided by the liquid
density and multiplied by a value of $0.39 per
gallon
Net annualized costs, the sum of the capitals
charges and direct operating costs less the
petroleum liquid credit.
Capital costs were determined for each tank from the graph
in Exhibit 15-2, on the following page. This graph was
prepared by Booz, Allen based on interviews with petroleum
refineries, petrochemical manufacturers, tank manufacturers
and emission control equipment manufacturers. Total
installed capital cost, including labor, is two times the
value given on the graph. All costs are for 1977.
A summary of the cost aggregated statewide from the
emission control of petroleum liquids stored in fixed-roof
tanks is shown in Exhibit 15-3, following Exhibit 15-2.
The total installed capital costs for equipping the 31
fixed-roof tanks affected by RACT with internal floating
roofs is approximately $2.11 million. The net annualized
cost to the industry is approximately $307,000 taking
into account an annual petroleum liquid credit of
approximately $265,000. The annualized cost per ton of
emissions reduced is approximately $144 per ton.
15-7
-------
(Prices
1 T.B. il 6 )
~ourc2: Co~-umc£ - ions
Inc. ar.alvsis
Wi-
lli t
itri-.-ioat inc.,
3002
- I ' c. ri
-ami!ton
-------
EXHIBIT 15-3
U.S. Environmental Protection Agency
VOC Emissions Control Costs for
Storage of Petroleum Liquids in
Fixed-Roof Tanks in Georgia
SUMMARY
Plant Characteristics
Number of tanks	31
Total capacity (millions of gallons)	21.8
Estimated annual throughput
(millions of gallons)	455.1
Uncontrolled emissions
(tons per year)	2,376
Emissions reduction (tons per year)	2,138
Emissions after control (tons
per year)	138
Costs
Installed capital cost ($ millions,
1977)	2.11
Annualized capital charges
($ thousands, 1977)	530
Annual direct operating costs
($ thousands, 1977)	42.2
Annual petroleum credit ($ thousands,
1977)	265a
Net annualized cost ($ thousands,
1977)	307
Cost per ton of emissions reduced
($ 1977)	144
a
Assume value of petroleum liquid saved is $0.39 per gallon and
density of petroleum liquid is 6.3 lbs. per gallon.
Source: Booz, Allen & Hamilton Inc.
-------
15.5 DIRECT ECONOMIC IMPACT
This section discusses the economic impact of equipping
fixed-roof tanks used for storing petroleum liquids with
internal floating roof to control VOC emissions. The
impacts analyzed include: total cost statewide and
identification of industries that may be affected and
their ability to raise the capital needed for the
controls.
Installed Capital Costs of Compliance in
Georgia. An estimated $2.11 million will be
required statewide in Georgia to equip fixed-
roof tanks for storing petroleum liquids with
internal floating roofs.
Industries Affected. Fixed-roof tanks affected
by RACT guidelines are owned by major oil
companies, large petrochemical firms and bulk
gasoline tank terminal companies. It is pre-
dicted that these companies will be able to
meet the capital requirements. The source of
capital is likely to be the company's traditional
source of funds.
15.6 SECONDARY ECONOMIC IMPACTS
It is expected that secondary economic impacts as
a result of implementing RACT guidelines in Georgia will
be minimal. Employment, worker productivity, and market
structure should remain unchanged.
~ ~ ~ * *
Exhibit 15-4 on the following page presents a summary
of the findings of this report.
15-8
-------
EXHIBIT 15-4
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR STORAGE OF PETROLEUM
LIQUIDS IN THE STATE OF GEORGIA
Current Situation	Discussion
Number of potentially affected 31
Storage tanks
Indication of relative impor-
tance of industrial section
to state economy
Current industry technology
trends
VOC emissions
Preferred method of VOC control
to meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost
(statewide)
The annual throughput was an esti-
mated 455 million gallons
Internal floating roof tanks utiliz-
ing a double seal have been proven
to be more cost effective
2,138 tons per year
Single seal and internal floating
roof
$2.11 million
$0.3 million
Price
Energy
Productivity
Employment
Market Structure
Problem area
VOC emission after control
Cost effectiveness of control
Assuming a "direct cost pass-through—
less than 0.1 cents per gallon
of throughput
Assuming 90 percent reduction of
current VOC level, the net energy
savings represent an estimated
savings of 17,000 equivalent barrels
of oil annually
No major impact
No major impact
No major impact
Potential availability of equipment
to implement RACT standard
2 38 tons per year
$144 annualized cost/annual ton
of VOC reduction
Source: Booz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
Benzene Emission Control Cost in Selected Segments of the
Chemical Industry, prepared for Manufacturing Chemists
Association by Booz, Allen & Hamilton Inc., June 12, 1978.
Control of Volatile Organic Emissions from Storage of
Petroleum Liquids in Fixed-Roof Tanks, EPA-450/2-77-036,
U.S. Environmental Protection Agency, December 1977.
Regulatory Guidance for Control of Volatile Organic Com-
pound Emissions from 15 Categories of Stationary Sources,
EPA-905/2-78-001, U.S. Environmental Protection Agency,
April 1978.
Revision of Evaporative Hydrocarbon Emission, PB-267 659,
Radian Corp., August 1976.
-------
16.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT STAGE I
FOR GASOLINE SERVICE STATIONS
IN THE STATE OF GEORGIA
-------
16.0 ¦ THE ECONOMIC IMPACT OF
IMPLEMENTING RACT STAGE I
FOR GASOLINE SERVICE STATIONS
IN THE STATE OF GEORGIA
This chapter presents a detailed analysis of implement-
ing RACT Stage I controls pertaining to gasoline dispensing
facilities3in the state of Georgia. Presently, only twelve
counties in Georgia are classified as- non-attainment areas.
They are: Clayton, Cobb, Coweta, DeKalb, Douglas, Fayette,
Fulton, Gwinnett, Henry, Muscogee (Columbus), Paulding and
Rockdale. The impact of RACT in these counties is investi-
gated in six sections as follows:
Specific methodology and quality of estimates
Industry statistics
The technical situation of the industry
Cost and hydrocarbon reduction benefit evaluations
for Stage I RACT requirements
Direct economic implications
Selected secondary economic impacts.
Each section presents detailed data and findings based
on analyses of the RACT guidelines, previous studies of
gasoline service station vapor recovery, interviews and
analysis.
Gasoline dispensing facility is a generic term which encompasses
both retail facilities and private outlets. The latter are pri-
marily establishments maintained by governmental, commercial or
industrial consumers for their own fleet operations. The latter
category also includes rural convenience stores, parking garages,
marinas and other retail outlets not classified as service stations.
16-1
-------
16.1 SPECIFIC METHODOLOGY
This section describes the methodology for determin-
ing estimates of:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Cost of controlling VOC emissions
Economic impact of emission control
for gasoline dispensing facilities in the State of Georgia.
The quality of the estimates based on a three point
scale is described in detail in the latter part of this
section.
16.1.1 Industry Statistics
The focal year of the analysis is 1977 and all hard
industry statistics are reported on this basis. When hard
data for the base year are not available, appropriate
scaling factors are applied to existing confirmed data to
derive base year estimates.
To derive the total number of gasoline dispensing
facilities in the twelve non-attainment counties a two-stage
procedure is used. First, the number of statewide retail
service stations is identified3 and the figure is then
scaled by a factor of 1.37° to produce an estimate of the
number of private dispensing facilities. Next, these two
statewide totals are disaggregated to the county level
using coefficients developed from a Bureau of Census
publication.0 In addition to providing a basis for esti-
mating the total number of dispensing facilities at the
county level, the census publication is also used to cal-
culate total county employment levels.
National Petroleum Mews Fact Book, 1978, p. 105.
The Economic Impact of Vapor Recovery Regulations on the Service
Station Industry, Department of Labor, OSHA, C79911, March 1978,
pp. 4-7.
County Business Patterns 1976 : Georgia U.S. Department of Commerce,
C3P-76-12, 1978.
16-2
-------
Finally, to derive the volume of gasoline sold in the
non-attainment counties, existing data on state sales
totals^ are disaggregated using coefficients reflecting
the ratio of county establishments to state establishments.
A value is assigned to this sales volume using the 1977
average national service station price (50.7C/gal. exclud-
ing tax.)e
16.1.2	VOC Emissions
The Illinois EPA estimated VOC emissions for gasoline
service stations by applying an emission factor to the 19 77
gasoline throughput. This emission factor and procedure
were used to calculate emissions in Georgia.
16.1.3	Processes for Controlling VOC Emissions
Processes for controlling VOC emissions from gasoline
service stations are described in "Design Criteria for
Stage I Vapor Control Systems Gasoline Service Stations."
This document provides the base data on alternative methods
available for controlling VOC emissions from gasoline ser-
vice stations. In addition, several studies of VOC emission
control were analyzed and interviews with petroleum trade
associations, gasoline service operators and vapor control
equipment manufacturers were conducted, to ascertain the
most likely types of equipment which would be used in gas-
oline service stations in Georgia. The specific studies
analyzed were: "Economic Impact of Stage II Vapor Recovery
Regulations: Working Memoranda," EPA-450/3-76-042; "A
Study of Vapor Control Methods for Gasoline Marketing
Operations," PB-246-088, Radian Corporation; "Reliability
Study of Vapor Recovery Systems at Service Stations,"
EPA-450/3-76-001; "Technical Support Document Stage I
Vapor Recovery at Service Stations," draft, Illinois
Environmental Protection Agency.
16.1.4 Cost of Vapor Control Systems
The costs of vapor control systems were developed by:
Developing costs of two different control systems
for a model service station including:
Federal Highway Administration Forms, MF 25, 26, 21.
National Petroleum News Fact Book, 1978, p. 100.
16-3
-------
Installed capital cost
Direct operating costs
Annual capital charges
Gasoline credit
Net annual cost
Aggregating costs to the countywide gasoline
dispensing establishment industry.
Costs were determined from analyses of the studies
listed previously, and from interviews with petroleum mar-
keters' associations, gasoline service station operators
and vapor control equipment manufacturers.
It was assumed that 75 percent of the gasoline dis-
pensing facilities would install coaxial or concentric
vapor balance systems and the remaining 25 percent would
install the two point vapor balance system. Costs for the
two systems are assumed to be represented by the costs
developed for the model service station discussed in
Section 16.4.1. Non-attainment county costs were extrapo-
lated from model costs.
16.1.5	Economic Impacts
The economic impacts were determined by analyzing the
lead time requirements needed to implement RACT; assessing
the feasibility of instituting RACT controls in terms of
capital and equipment availability; comparing the direct
costs of RACT control to various county economic indicators;
and assessing the secondary impacts on market structure,
employment and productivity resulting from implementation
of RACT controls.
16.1.6	Quality of Estimates
Several sources of information were utilized in
assessing the emissions, costs, and economic impact of
implementing RACT controls on gasoline service stations.
A rating scheme is'presented in this section to indicate
the quality of the data available for use in this study.
A rating of "A" indicates hard data (i.e., data that are
published for the base year); "B" indicates data that were
extrapolated from hard data; and "C" indicates data that
were not available in secondary literature and were esti-
mated based on interviews, analyses of previous studies
and best engineering judgment. Exhibit 16-1, on the follow-
ing page, rates each study output and the overall quality
of the data.
16-4
-------
EXHIBIT 16-1
U.S. Environmental Protection Agency
DATA QUALITY
ABC
Study Outputs Hard Data Extrapolated Estimated
				Data	Data
Industry statistics	•
Emissions	•
Cost of emissions	•
control
Countywide costs of	•
Emissions
Economic impact	•
Overall quality of	•
data
Source: Booz, Allen & Hamiliton Inc.
-------
16.2 INDUSTRY STATISTICS
Industry characteristics, statistics and business
trends for gasoline service stations are presented in this
section. The discussion includes a description of the
number of facilities and their characteristics, a comparison
of the size of the service station industry to state eco-
nomic indicators, a historical characterization and des-
cription of the industry and an assessment of future
industry patterns. Data in this section form the basis
for assessing the impact on this industry of implementing
RACT to VOC emissions from gasoline service stations in
Georgia.
16.2.1 Size of Industry
There were an estimated 1,825 retail gasoline dispens-
ing facilities in the twelve counties in Georgia in 1977.
In addition, there were an estimated 2,500 private dispensing
establishments (which include gasoline dispensing facilities
such as marinas, general aviation facilities, commercial
and industrial gasoline consumers and rural operations
with gas pumps). For all dispensing facilities sales were
in the range of $529 million and yearly throughput was
approximately 1.0 4 billion gallons of gasoline. The esti-
mated number of employees in 19 77 was 9,377 employees in
retail outlets and 5,000 employees in private outlets for
a total of 14,377 employees. These data and the sources
of information are summarized in Exhibit 16-2, on the
following page. Total capital investments by the gasoline
dispensing industry were not identified, although in general
gasoline dispensing outlet operators make investments in
plant and equipment to replace worn-out facilities and
equipment; modernize the establishments; or improve opera-
ting efficiencies.
16.2.2 Comparison of Industry to State Economy
Employment and sales are used as reference indicators
in order to gain a perspective on the economic significance
of the gasoline dispensing industry. The estimated 14,377
employees and $529,000,000 in sales constitute approximately
one percent of the civilian labor force and seven percent
of the total twelve county retail trade in 19 77. In eval-
uating these percentages, it should be remembered that
transportation is a vital linking element in the economy
16-5
-------
Number of Facilities
Retail	Private
Dispensing Dispensing
Facilities Facilities
1,825
2,500
EXHIBIT 16-2
U.S. Environmental Protection Agency
INDUSTRY STATISTICS FOR GASOLINE
SERVICE STATIONS IN GEORGIA
Number of Emdovees
Retail
9,377
Private
5,000
Sales
Gasoline Sold
(SBillion, 1977) (Billions of Gallons)
,e
0.529
1.04"
National Petroleum News Fact Book, 1978.
Includes gasoline dispensing facilities such as marinas, general aviation
facilities, commercial and industrial gasoline consumers and rural convenience
score operations with gas pumps.
Estimate based on the ratio of the number of employees to the number of estab-
lishments (scaled appropriately) in the twelve counties as of 1976.
Clayton
Cobb
Coweta
DeKalb
Douglas
Fayette
Fulton
Gwinnett
Henry
Paulding
Rockdale
Muscogee
(Columbus)
6.47 employees per retail outlet
4.94
3.51
5.95
5.34
5.17
4.89
3.98
3.6
5.45
6.25
4.64
d.
(Source:
Georgia CBP-76-12, 1978
Estimate based on two employees per facility.
U.S Department of Commerce, Bureau of the Census, County
Business Patters 1976):
Number of gallons of motor gasoline sold in 1977 multiplied by the national
service station price in 1977 (50.7C/gallon), National Petroleum News Fact
Book, 1978.
Estimated based on Federal highway statistics for 1977.
Source: Booz, Allen & Hamilton Inc.
-------
and any significant disruption to the gasoline dispensing
sector could have indirect consequences for other sectors
of the economy.
16.2.3 Characterization of the Industry: Structure and
Trends
Gasoline dispensing establishments are the final
distribution point in the petroleum marketing network.
Exhibit 16-3 shows the position of both retail and private
dispensing facilities with the former located in the bottom
row and the latter primarily in the source marked "Commer-
cial/Industrial Consumer Accounts." As the graphic indicates,
all petroleum marketers retail their gasoline through one
of the following type operations:
Direct-salary operation: supplier "controlled"/
supplier-operated
Lessee dealer: supplier-"controlled"/lessee-
dealer operated
Open dealer: dealer-"controlled"/dealer-operated
Convenience Store
According to this classification, the retail gasoline dis-
pensing sector has the following dimensions: 18 percent
direct outlets, 5.4 percent convenience stores, 46.9 percent
lessee dealers and 29.7 percent open dealers. See Exhibit
16-4 for more details.
By way of contrastjthe private dispensing establish-
ments have the following breakdown by end use: agriculture
trucking and local service, government, taxis, school busses,
and miscellaneous. See Exhibit 16-5 for more details.
Regardless of ownership pattern or end use category,
gasoline marketing is characterized by high fixed costs,
with operations varying by degree of labor intensity.
Conventional service stations (service bay with mechanics
on duty and nongasoline automotive items available) are
the most labor intensive, while self-service "gas and go"
stations exemplify low labor intensity.
Finally, no discussion of the industry would be com-
plete wihtout a characterization of major trends. The
number of gasoline dispensing facilities, and in particular
16-6
-------
EXHIBIT 16-3
U.S. Environmental Protection Agency
GASOLINE DISTRIBUTION NETWORK
Kifimvflittfiki
ftM* fete*
OJr»rT Camuwf
Cmwhw Tank Cm
BzUit
DtalM Ttnli
Wigofi Prict
fltck Pile* Plus
Fitifht
For Oirtct
Operations
Privm
Briefed
Opto
Dtiltr
Source:
U.S. Department of Labor, The Economic Impact of Vapor Recovery
Regulations on the Service Station Industry, c-79911, March 1978,
p. 56.
-------
EXHIBIT 16-4
U.S. Environmental Protection Agency
U.S. RETAIL GASOLINE DISPENSING FACILITIES
% TOTAL OUTLETS
Major Oil Company
Regional Refiner
Independent
Marketer
Small Jobber
Direct
Outlets3
3.5
2.3
9. 3
2.9
Convenience
Stores
0.4
0.1
4.3
0.6
Lessee.
Dealer0
28.2
5.3
2.5
10.9
Open
Dealerc
15.7
1.1
0.6
12.3
Total
Directly
Supplied
47.8%
8.8%
16.7%
26.7%
% Total Outlets 18.0%	5.4%
Total Number of
Outlets	32,070	9,600
46.9%	29.7% 100.0%
83,690 53,030 178,390
a Company "investment"/company operated
13 Company "investment"/lessee dealer
c Dealer "investment"/dealer operated
Source: U.S. Department of Labor "The Economic Impact of Vapor
Recovery Regulations on the Service Station Industry,"
C-79911, March 1978, p. 58.
-------
EXHIBIT 16-5
U.S. Environmental Protection Aaency
U.S. PRIVATE GASOLINE DISPENSING FACILITIES
End-Use Sector
Number of
"Private" GasolLne-
Dispenaing Outlets
Annual Gasoline
Consumption
(Million Gal)
% Total U.S.
Private
Gasoline
Volume
% Total U.S.
Gasoline
Volume
Agriculture
32.600
3,801.3
15%
3%
Trucking and
local service
21.900
5,241.6
21%
5%
Government
85,450

11%
2%
- Federal

227.6
0.
9%
- Military

174.1
0.
6%
- Other*

2, 266.4
9.
3%
Taxis
3,380
882.1
3%
0.8%
School Busses
3, 070
144.7
1%
0.1%
Miscellaneous"*
94.530
12,497.2
49%
11%
Total Non-Service
Station Segment
242, 930
25,235.0
100%
23%
Retail Service
Station Segment
178,390
84,412.0

77%
All Segments —
421.320
109,647.0

100%
•State and municipal governments.
•"Auto rental, utilities, and other.
Source:
U.S. Department of Labor, "The Economic Impact of Vapor
Recovery Regulations on the Service Station Industry,"
C-79911, March 1978, p. 47.
-------
the retail service stations, has been declining nationally
since 1972. At the same time, throughput per station has
been rising, reflecting the switch to high volume self-service
"gas and go" establishments.3 This trend also appears in
Georgia and is predicted to continue. In 1972 there were
6,730 service stations and in 1977 this number fell to
5,243.
16.2.4 Gasoline Prices
Gasoline prices vary among types of gasoline stations
within a geographical area. Convenience stores are apt to
have higher pump prices than large self-service "gas and go"
stations. The pump price less the dealer tank wagon price
represents the gross margin on a gallon of gasoline. Re-
tail gasoline service station operating costs then must
come out of the gross margin for gasoline as well as the
gross margin for other products which may be sold at the
service station. Operating costs vary substantially among
the various types of service stations. It is reported that
some service stations operate with nearly zero net margin
or profit on the sale of gasoline, while others may enjoy
up to four to five cents profit per gallon. Insufficient
detail is available on service stations in Georgia to
present a thorough analysis of existing price structures
and degree of competition in the industry within the state.
a	"Economic Impact of Stage II Vapor Recovery Regulations: Working
Memoranda," EPA-450/3-76-042, November 1976, p. 2. By 1980
one-'nalf of all retail gasoline stations are expected to be
self-service.
b
National Petroleum News Fact Book, 1978, p. 105.
16-7
-------
16.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents information on gasoline dispens-
ing outlet operations, estimated VOC emissions from these
operations in the non-attainment areas, the extent of
current control in use, the vapor control requirements of
RACT and the likely alternatives which may be used for
controlling VOC emissions from gasoline' dispensing facili-
ties in Georgia.
16.3.1 Gasoline Dispensing
Gasoline service stations are the final distribution
point in the gasoline marketing network. Taking retail
and private outlets together, the average monthly through-
put per station in the twelve counties is 20,096 gallons.
These facilities are all subject to RACT regulations and
will be required to comply with Stage I vapor control by
January 1, 1982.
16.3.1.1 Facilities
Equipment at gasoline dispensing facilities include:
gasoline storage tanks, piping and gasoline pumps. The
most prevalent type of gasoline storage tank is the under-
ground tank. It was assumed that there are typically
three storage tanks per facility. Gasoline is dispensed
to motor vehicles through pumps and there,may be anywhere
from one to twenty pumps per facility. Stage I vapor con-
trol regulations apply to the delivery of gasoline to the
facility and the subsequent storage in underground tanks.
16.3.1.2 Operations, Emissions and Controls
Uncontrolled VOC emissions at dispensing facilities
come from loading and unloading losses from tank trucks
and underground tanks, refueling losses from vehicle tanks
and breathing losses from the underground tank vent. Stage
I vapor control applies to tank truck unloading and working,
and breathing losses from underground storage tanks.
Tank trucks are unloaded into underground storage tanks
either by splash loading or submerged loading. Splash load-
ing results in more emissions than submerged loading.
16-3
-------
More specifically, losses consist of:
Organic liquid that evaporates into the air that
is drawn in during the withdrawal of the tank
compartment contents
losses from refilling the underground tank that
occur as vapors are displaced from the tank
vapors vented into the atmosphere from under-
ground storage tanks as a result of changes in
temperature and pressure
Exhibit 16-6 shows the estimated emissions in tons per
year from all dispensing facilities in non-attainment
counties. To arrive at this estimate it is assumed that
90 percent3 of all storage tank loading is by the submerge
fill method and 10 percent by the splash fill method. Given
this assumption, emissions based on throughput are estimated
to be 4,026 tons.
16.3.2 RACT Guidelines
The RACT guidelines for Stage X VQC emission control
from gasoline service stations require the following con-
trols :
Submerged fill of gasoline storage tanks
Vapor balancing between the truck and the gaso-
line storage tank
Proper operation and maintenance of equipment.
Exhibit 16-7 summarizes the RACT guidelines for VOC emissions
control from gasoline service stations.
16.3.3 Selection of the Most Likely RACT Control Techniques
State I control of VOC emissions from gasoline dispens-
ing facilities can be achieved by using vapor balancing be-
tween the unloading of incoming tank trucks and the gasoline
storage tank and by submerged filling of storage tanks. There
Source: Booz, Allen interviews with industry representatives.
16-9
-------
EXHIBIT 16-6
U.S. Environmental Protection Agency
VOC EMISSIONS FROM GASOLINE
Estimated
Number of
a
Facilities Average Yearly Throughput Total Emissions
(Millions of Gallons)	(Tons/Year)
4,325	1,043	4,026
Splash fill emissions: 11.5 lbs/1000 gallons throughput
Submerge fill emissions: 7.3 lbs/1000 gallons throughput
assumes no vapor balancing
Source:
Illinois Environmental Protection Agency
-------
EXHIBIT 16-7
U.S. Environmental Protection Agency
VOC EMISSION CONTROL TECHNOLOGY FOR
GASOLINE DISPENSING FACILITIES
Facilities Affected. Sources of Emissions RACT Control Guidelines
Gasoline service
stations and gaso
line dispensing
facilities
during storage tank
filling, and submerge
filling; instructions to
operator of facility on
maintenance procedures;
repair and replacement
of malfunctioning or worn
equipment; maintenance of
meters and test devices
Storage tank filling
and unloading tank
truck
Stage I vapor control
system, i.e., vapor
balance system which
returns vapors dis-
placed from the storage
tank to the truck
Source: "Regulatory Guidance for Control of Volatile Organic Com-
pound Emissions from 15 Categories of Stationary Sources,"
pp. 28-31.
-------
are alternative means of achieving vapor balance, based pri-
marily on the method of connecting the vapor return line to
the gasoline storage tank.- The two primary methods for
connecting vapor return lines are the two point connection
and coaxial or concentric connection (often referred to as
tube-in-tube connection). The two point connection method
involves using two risers with the storage tank: one for
fuel delivery and the other for returning vapors to the
tank truck. The coaxial system uses a concentric liquid
vapor return line and thus requires only one tank riser.
EPA tests have shown the two point system to be more effec-
tive than the coaxial system in transferring displaced
vapors, but at the same time the two point system is more
expensive. It is judged that 25 percent of gasoline
dispensing facilities will install the two point system,
bearing a higher installed cost but achieving greater
efficiency. Submerged fill is required by Stage I vapor
control. It is achieved by using a drop tube extending
to within six inches of the storage tank bottom.
^"Booz, Allen interviews with industry personnel
16-10
-------
16.4 COST AND HYDROCARBON REDUCTION BENEFIT EVALUATIONS
FOR STAGE I RACT REQUIREMENTS
Costs for VOC emission control equipment are presented
in this section. The costs for a typical gasoline service
station are described, followed by an extrapolation to the
non-attainment county industry.
16.4.1 Costs for Vapor Control Systems
The costs for vapor control systems were developed
from information provided by petroleum marketing trade
associations and from previous cost studies of gasoline
dispensing facilities. These costs are summarized for a
typical gasoline dispensing facility in Exhibit 16-8. The
monthly throughput of affected facility averages out at
36,500 gallons or 2,500 gallons less than the average for
all retail facilities in the United States.3 Though Georgia
facilities are somewhat below the U.S. average, in general,
service station equipment requirements (number of storage
tanks) are not very sensitive to throughput over a large
gallon range. Therefore, it appears that Georgia facili-
ties should be quite similar to the prototype facility
described in Exhibit 16-8. Given this observation, Stage I
vapor control costs have been estimated as follows.
Capital costs of installing the two point vapor-
balancing equipment at existing service stations are about
$2,000 per station. This cost includes eauipment costs
($300-5500) and installation ($1,300-$l,600).b The
installed capital cost for a coaxial or concentric system
is reported by U.S. EPA to be $150 to $200 per tank,
including parts and labor. Annualized capital costs are
estimated at 25 percent of installed capital cost and
include interest, depreciation, taxes and maintenance.
U.S. Department of Labor, OSHA, "The Economic Impact of Vapor
Recovery Regulations on the Service Station Industry," C-79911,
March 1978, p. 29.
"Air Pollution Control Technology Applicable to 26 Sources of
Organic Compounds," U.S. Environmental Protection Agency, May 27,
19 77. (This cost includes excavation and construction of mani-
folded storage tanks.)
16-11
-------
EXHI3IT 16-8
U.S. Environmental Protection Agency
STAGE I VAPOR CONTROL COSTS FOR A
TYPICAL RETAIL GASOLINE DISPENSING FACILITY
Description o£ Model Gasoline Station
Monthly throughput (gallons)	39,000a
Number of storage tanks	3^
Costs
($, 1977)
Coaxial or
Two Point	Concentric
System	System
Installed capital 2,000c	600
Annualized capital charges^ 500	150
Direct operating cost 0	0
Annualized coste 500	150
>a 39,000 is the national average. In Georgia's non-
attainment counties the average is 36,500 for retail
dispensing outlets and 7910 for private outlets.
12 In private dispensing outlets, the number of tanks is
assumed to be one as opposed to three On the
average, private stations have monthly'throughput
flows of only 22 percent of throughput in retail
service stations.
c Includes dost of repaving but does not account for
lost sales due to down time.
^ Twenty-five percent of installed capital cost.
Includes depreciation, interest, taxes, insurance
and maintenance.
e Does not include credit for recovered gasoline.
Source: Booz, Allen & Hamilton Inc.
-------
Based on these figures, the annualized cost3 at a
typical gasoline dispensing facility with 36,500 gallons/
month throughput is estimated to be $500 for the two point
system and $150 for the concentric or coaxial system. It
is worth noting that direct operating costs should not
increase due to Stage I controls and thus the annualized
cost will reflect only the capital changes associated with
the control equipment.
In addition to the cost incurred at the gasoline
dispensing facility, there are also the costs of vapor
balancing borne by the owners of the tank trucks. The costs
to bulk gas plants and terminals of Stage I vapor modifica-
tions of fleet trucks have been discussed in other chapters.
Here the focus is on independent fleet operators subject to
RACT vapor controls. By approximating the total number of
tank trucks needed to service the gasoline dispensing facili-
ties in the non-attainment counties, and by subtracting from
this total the estimated number of trucks controlled by bulk
terminals and gas plants, the size of the independent fleet
is derived. Booz, Allen estimates that 25 percent of the
total fleet is independent, and this translates rouqhly into
70 tank trucks requiring vapor modification at a total cost
of $210,000.
The cost of vapor control modification on trucks is
estimated to be between $2,000 and $7,200 depending on
whether top or bottom loading methods are used. For purposes
of this analysis, it is assumed that the less expensive top
loading method will be used, and that this system can be in-
stalled at a cost of $3,000 per truck. Annualized capital
costs are estimated at 25 percent of installed capital cost
and include: interest, depreciation, taxes and maintenance.
Direct operating costs are assumed to be zero. See Exhib-
it 16-9 on the following page for more details.
16.4.2 Extrapolation to the Industry in Non-Attainment
Areas
Exhibit 16-10 shows the extrapolation of vapor control
costs to the countywide industry. Costs include truck modifi-
cations and vapor control at the gasoline dispensing facili-
ties. It should be noted that actual costs to the operators
of trucks and gasoline dispensing outlets may vary depending
on the control method and specific equipment selected.
Gasoline recovery credit has not been accounted for here, but
will be when the results are extrapolated to the county-wide
industry.
16-12
-------
EXHIBIT 16-9
U.S. Environmental Protection Agency
STAGE I VAPOR CONTROL COSTS
FOR A TYPICAL GASOLINE DISPENSING TRUCK
Costs for
Top Loading
Method ($, 1977)
Installed capital3
Annualized capital charges13
Direct operating cost
Annualized cost
3,000
750
0
750
aBooz, Allen interviews with equipment manufacturers.
^25 percent of installed capital cost. It includes depreciation,
interest, taxes, insurance and maintenance.
Source: Booz, Allen & Hamilton Inc.
-------
EXHIBIT 16-10
U.S. Environmental Protection Agency
NON-ATTAINMENT AREA COSTS FOR STAGE'I VAPOR
CONTROL OF GASOLINE DISPENSING FACILITIES
SUMMARY OF COSTS
Number of facilities	4,325
Total annual throughput
(billions of gallons)	1.043
Uncontrolled emissions
(tons/year)	4,026
Emissions reduction
(tons/year)	3,825a
Uncontrolled emissions
(tons/year)	201
Installed capital
($ millions)	2.742
dispensing facilities	2.532
tank trucks	0.210
Annualized capital cost
($ millions)	0.686
dispensing facilities	0.633
tank trucks	0.053
Annual gasoline credit
($ millions)	0.036^
Net annualized cost
($ millions)	0.650
Net annual cost per ton of
emission reduced
($ per ton/year)	$170
Estimate based on 95 percent reduction in emissions.
Gasoline credit to dispensing outlets is based on the conversion
from splash to submerged filling. The actual formula relates
throughput in splash fill facilities to potential captured vapors
resulting from equipment conversion, and values the recoverable
gasoline at its retail selling price (50.7C/gallon)• Bulk ter-
minals also receive a gasoline credit for the recovered vapors
brought back by tank trucks. This gasoline is estimated to be
worth $500,000 when valued at the bulk wholesale price (42C/gal-
lon) .
Source: Booz, Allen & Hamilton Inc.
-------
The total cost to the industry of installing vapor
control equipment is estimated to be approximately $2,740,000.
The amount of gasoline prevented from vaporizing by convert-
ing to sumberaed filling of the gasoline storage tank is
estimated to be worth approximately $36,000. Based on these
estimates, the annual cost per ton of emissions controlled
was $170 per ton.
16-13
-------
16.5 DIRECT ECONOMIC IMPLICATIONS
This section discusses the direct economic implica-
tions for the non-attainment counties of implementing
Stage I RACT controls.
16.5.1 RACT Timing
RACT must be implemented statewide by January 1,
1982.a This means that gasoline service station operators
must have vapor control equipment installed and operating
within the next three years. The timing deadlines of RACT
impose several requirements on service station operators
including:
Determining the appropriate method of vapor
balancing
Raising capital to purchase equipment
Generating sufficient income from current
operators to pay the additional annual operating
costs incurred with vapor control
Acquiring the necessary vapor control equipment
Installing and testing vapor control equipment
to insure that the system complies with RACT.
16.5.2 Feasibility Issues
Technical and economic feasibility issues of imple-
menting RACT controls are discussed in this section.
Gasoline service stations in several air quality
control regions of the U.S. have successfully implemented
Stage I vapor control systems.
State adoption of Stage I RACT regulations will
generate additional demand for the vapor control systems
for gasoline service stations. However, it .is estimated
The deadline actually begins October 1, 1980, but mandatory
compliance will probably not be enforced until 1982.
16-14
-------
that off-the-shelf systems will be readily available within
the next three years, thus making the implementation of
Stage I RACT technically feasible.
A number of economic factors are involved in determin-
ing whether a specific establishment will be able to imple-
ment vapor control systems and still remain profitable.
These include:
Ability to obtain financing
Ownership—major oil company or private individual
Ability to pass on a price increase
The current profitability of the establishment
Age of the establishment.
A major finding in a study on gasoline service station
vapor control was that small service stations could have
problems raising the necessary capital to purchase ana
install vapor control equipment. The inability to raise
the necessary capital to install vapor control equipment
could cause the closing of some service stations.a
Service stations that are owned by major oil companies
may have better access to capital than privately owned
service stations. A private service station owner may have
to borrow capital frcm local banks, friends or relatives,
whereas a station owned by a major oil company may receive
funding out of the oil company's capital budget.
It is estimated that small gasoline service stations
with throughput less than 10 ,000 gallons*3 per month will
experience a cost increase of nearly 0.25 cents per gallon
to implement RACT, using the two point vapor balance system.
Larger service stations will experience a cost increase only
one-fifth as much. This will put the smaller stations at a
competitive disadvantage in terms of passing on a price
increase.
Recent experience indicates that temporary disruption
due to Stage I RACT control can have serious impacts on the
service stations' profitability. In an interview, the
Greater Washington/Maryland Service Station Association
reported that several service stations experienced a loss
"Economic Impact of Stage II Vapor Recovery Regulations: Working
Memoranda," EPA-450/3-76-042, November 19~6.
b
The EPA may exempt service stations with throughput less than
10,000 gallons per month from the RACT requirements.
-------
of business for up to three weeks while Stage I vapor con-
trol was being installed. Service station driveways were
torn up, greatly restricting access to pumps. In some
instances, oil company owned service stations were sold or
closed down because the oil companies did not want to expend
funds for vapor control at these marginally profitable
operations.
The older service stations reportedly will experience
greater costs than new service stations when implementing
Stage I vapor control requirements. This is because older
stations will have more extensive retrofit requirements and
will probably experience more temporarily lost business
during the retrofit.
The number of gasoline service stations have been
declining nationally over the past few years for a number
of reasons, reflecting a trend towards reducing overhead
costs by building high throughput stations. This trend is
likely to continue whether or not vapor control is required.
Implementation of Stage I RACT control may simply accelerate
this as marginal operators may opt not to invest in the
Required capital equipment. Sufficient data for Georgia
are not available to quantify the magnitude of this impact.
16.5.3 Comparison of Direct Cost With Selected Direct
Economic Indicators
The net increase in the annual operating cost to the
gasoline service stations industry from RACT represents
0.14 percent of the value of the total gasoline sold in
the non-attainment counties. Compared to the county-wide
value of retail trade, this annual cost increase would be
insignificant. The impact on the unit price of gasoline
varies with the gasoline service station throughput. As
discussed in the preceding section, the small stations, with
less than 10,000 gallons per month throughput, may experi-
ence an annulaized cost increase of up to 0.25 cents per
gallon of gasoline sold, whereas the large service stations
may experience an annualized cost increase only one-fifth
as large.
16-16
-------
16.6 SELECTED SECONDARY ECONOMIC IMPACTS
This section discusses the secondary impact of imple-
menting RACT on employment, market structure, and gasoline
station operation.
Employment is expected to decline, if a number of small
marginally profitable gasoline service stations cease
operating rather than invest capital for compliance with
RACT. Based on the county-wide estimates of number of
employees and the number of facilities, approximately three
jobs will be lost with the closing of each gasoline dis-
pensing outlet. No estimate was made of the total number
of facilities that may close due to RACT.
The market structure is not expected to change
significantly because of Stage I vapor control requirements.
The dominant industry trend is towards fewer stations with
higher throughputs. This trend will continue with or without
RACT. Those marginal facilities which do close because of
RACT will merely enhance the existing industry trend
towards greater concentration.
The impact on a specific service station operation
is expected to be slight. Fill rates for loading gasoline
storage tanks may marginally decline if coaxial or
concentric vapor hose connections are used.
~ ~ ~ * *
Exhibit 16-11, on the following page, presents a
summary of the findings of this report.
16-17
-------
EXHIBIT 16-11(1)
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR
GASOLINE DISPENSING FACILITIES
IN THE STATE OF GEORGIA
Current Situation
Number of potentially
facilities
Discussion
affected 4,325
Indication of relative importance
of industrial sector to county
economy
Current industry technology
trends
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet HACT guidelines
Assumed method of control to meet
RACT guidelines
Affected Areas in Meeting RACT
Capital investment (12 counties)
Annualized cost
(12 counties)
Price
Energy
Productivity
Employment
Market structure
12 county industry sales are S529
million with a yearly throughput of
1.04 billion gallons
Number of stations has been declining
and throughput per station has been
increasing. By 1980, one-half of
stations m U.S. are predicted to
become totally self-service
4,026 tons per year from	tank loading
operation
Submerged fill	and vapor	balance
Submerged fill and vapor	balance
Discussion
$2.7 million
$0,686 million (less than 0.1
percent of the value of gasoline sold)
Assuming a "direct cost pass-through"—
less than $0,001 per gallon of gaso-
line sold in the 12 counties
Assuming full recovery: 1,234/000
gallons/year (24,919 equivalent barrels
of oil) saveda
No major impact
No major impact
Compliance requirements may accelerate
the industry trend towards high through-
put stations (i.e., marginal operations
may opt to shut down)
One gallon of gasoline has 125,000 BTU's. One barrel of oil
equivalent has 6,050,000 BTU's.
-------
EXHIBIT 16-11(2)
U.S. Environmental Protection Agency
RACT timing requirements (1982)
Retrofitting all service stations
within time constraints may be diffi-
cult in a few instances
Problem area
Older stations face higher retrofit
costs—potential concerns are dis-
locations during installations
VOC emission after RACT control
201 tons per year from tank loading
operation
Cost effectiveness of RACT
control
$170 annualized cost/annual ton of
VOC reduction
Source: Booz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
National Petroleum News Fact Book 1978, McGraw-Hill.
The Economic Impact of Vapor Recovery Regulations on the
Service Station Industry, Department of Labor, OSHA, C79911
March, 1978.
County Business Patterns 1976; South Carolina, U.S. Depart-
ment of Commerce, CBP-76-12, 1978.
Economic Impact of Stage II Vapor Recovery Regulation:
Working Memoranda, EPA-450/3-76-042, November, 1976.
Federal Highway Administration: Mr. Ken Toda.
Table MF 25: Private and Commercial Highway Use of Special
Fuels by Months, 1977.
Table MF 26: Highway Use of Gasoline by Months, 1977.
Table MF 21: Motor Fuel Use, 1977.
Regulatory Guidance for Control of Volatile Organic Compound
Emissions from 15 Categories of Stationary Sources,
EPA-905/2-78-001, April, 1978.
Air Pollution Control Technology Applicable to 26 Sources of
Organic Compounds, U.S. EPA, May 27, 1977.
A Study of Vapor Control Methods for Gasoline Marketing
Operations, PB-246-088, Radian Corporation.
Reliability Study of Vapor Recovery Systems at Service
Stations, EPA-450/3-76-001, March 1976.
Technical Support Document, Stage I Vapor Recovery At
Service Stations, Draft, Illinois Environmental Protection
Agency.
1972 Census of Retail Trade, Area Statistics, U.S. Department
of Commerce, Bureau of the Census.
-------
Hydrocarbon Emission Control Strategies for Gasoline
Marketing Operations, U.S. EPA, Contract No. 68-01-4465,
September, 1977, Draft.
Design Criteria For Stage I Vapor Control Systems Gasoline
Service Stations, U.S. EPA, Research Triangle Park, North
Carolina, November, 1975.
Mr. Kenneth H. Lloyd, EPA, Research Triangle Park, North
Carolina.
Mr. Vic Rasheed, Greater Washington/Maryland Service Station
Association.
Survey of Gasoline Tank Vehicles and Rail Cars, EPA Contract
No. 68-02-2606, Draft, November, 1968.
Cost Data-Vapor Recovery Systems at Service Stations,
PB-248-353, September, 1955.
Human Exposure to Atmospheric Benzine, EPA Contract No.
68-01-4314, October, 1977.
Systems and Costs to Control Hydrocarbon Emissions from
Stationary Sources, PB-236-921, EPA, September, 1974.
Revision of Evaporative Hydrocarbon Emissions from Station-
ary Sources, PB-267-659, August, 1976.
-------
17.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
USE OF CUTBACK ASPHALT
IN THE STATE OF GEORGIA
-------
17o0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
USE OF CUTBACK ASPHALT
IN THE STATE OF GEORGIA
This chapter presents a detailed analysis of the impact
of implementing RACT for use of cutback asphalt in the non-
attainment counties in the state of Georgia. Presently,
only twelve counties in Georgia are classified as non-attain-
ment areas. They are: Clayton, Cobb, Coweta, DeKalb, Doug-
las, Fayette, Fulton, Gwinnett, Henry, Paulding, Rockdale
and Muscogee (Columbus). The impact of RACT in these coun-
ties is investigated in five sections as follows:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Cost and hydrocarbon reduction benefit evaluations
for RACT requirements
Economic impacts
Each section presents detailed data and findings based
on review of the RACT guidelines, previous studies of the
use of cutback asphalt, interviews and analysis.
17-1
-------
17.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining
estimates of:
Industry statistics
VOC emissions
Control of VOC emissions
Cost of controlling VOC emissions
Economic impact of emission control
Data quality
for the use of cutback asphalt in Georgia.
17.1.1 Industry Statistics
Industry statistics on the use of cutback asphalt were
obtained from the U.S. Bureau of Mines. Sales in tons were
avalaible for 1977. The value of shipments was calculated
by applying an average unit price of 36 cents per gallon.
17.1.2 VOC Emissions
VOC emissions from the use of cutback asphalt in Georgia
were calculated by multiplying the emission factors for cut-
back asphalt by the number of tons of asphalt used. The
emission factor for slow cure asphalt is 0.078 tons per ton,
for medium cure asphalt 0.209 tons per ton, and for rapid
cure asphalt 0.20 tons per ton.l
17.1.3 Process for Controlling VOC Emissions
f
The process for controlling VOC emissions from the use
of cutback asphalt is described in "Control of Volatile
Organic Compounds from the Use of Cutback Asphalt,"
EPA-450/2-77-037, and "Air Quality and Energy Conservation
Benefits from Using Emulsions to Replace Cutbacks in Certain
Paving Operations," EPA-450/12-78-004. Interviews were
conducted with asphalt trade associations, asphalt producers,
and government agencies to gather the most up-to-date infor-
mation on: costs for cutback asphalt and asphalt emulsions,
the feasibility of using emulsions in place of cutback
asphalt and the associated cost implications. Other sources
of information were "Mineral Industry Surveys," U.S. Bureau
of Mines; "Magic Carpet, the Story of Asphalt," The Asphat
Institute; "Technical Support for RACT Cutback Asphalt,"
1. "Control of Volatile Organic Compounds From Use of Cutback
Asphalt," EPA-450/2-77-037, p. 1-3.
17-2
-------
State of Illinois; '"World Use of Asphalt Emulsion," paper
by Cyril C. Landis, Armak Company, "A Brief Introduction to
Asphalt and Some of Its Uses," the Asphalt Institute; and
"Asphalt: Its Composition, Properties and Uses," Reinhola
Publishing Corporation.
17.1.4 Cost of Vapor Control
The costs for control of VOC emissions from the use of
cutback asphalt are incurred by, using emulsions in place of
cutback asphalt. These costs include:
Changes in equipment for applying emulsions m
place of cutback asphalt
Training of personnel to work with asphalt emul-
sions in place of cutback asphalt.
Additionally, if every state incorporates the RACT
guidelines, additional plant capacity to produce asphalt
emulsions would have to be created.
Costs were determined from analyses of the studies
listed in the previous section and from interviews with
asphalt trade associations, government agencies and producers
and users of cutback asphalt and emulsions. These differ-
ential costs of replacing cutback asphalt with asphalt
emulsions, were then extrapolated to the non-attainment
counties in the state.
17.1.5 Economic Impacts
The economic impacts were determined by examining the
effects of conversion to emulsion asphalts on: the costs
of paving and road maintenance; the price of cutback and
emulsion asphalts; the supply and demand for these asphalts;
the employment of workers in end-use application; and on
labor productivity in end-use applications.
17-3
-------
17.1.6 Quality of Estimates
Several sources of information were utilized m assess-
ing the emissions, cost and economic impact of implementing
RACT for the use of cutback asphalt. A rating scheme is
presented in this section to indicate the quality of the
data available for use in this study. A rating of "A"
indicates hard data (i.e., data that are published for the
base year); "B" indicates data that were extrapolated from
hard data; and "C" indicates data that were not available
in secondary literature and were estimated based on inter-
views, analyses of previous studies and best engineering
judgment. Exhibit 17-1, on the following page, rates each
study output listed and the overall quality of the data.
17-4
-------
EXHIBIT 17-1
U.S. Environmental Protection Agency
DATA QUALITY
ABC
Extrapolated Estimated
Study Outputs	Hard Data	Data	 Data
Industry statistics	•
Emissions	•
Cost of emissions
control	•
12 county costs of
emissions	•
Economic impact	•
Overall quality of
data	•
Source: Booz, Allen & Hamilton Inc.
-------
17.2 INDUSTRY STATISTICS
This section presents information on the cutback
asphalt industry, statewide statistics of cutback asphalt
use, and comparison of cutback asphalt consumption to the
statewide value of wholesale trade. A history of the use
of cutback asphalt is also discussed. Data in this section
form the basis for assessing the technical and economic
impacts of implementing RACT in Georgia.
17.2.1 Industry Description
The cutback asphalt industry encompasses the produc-
tion and use of cutback asphalt. Cutback asphalt is one
product resulting from the refining and processing of
asphalt from crude oil. Cutback asphalt is produced from
refined asphalt and petroleum liquids at an asphalt mixing
plant. It is then stored in tanks or loaded into tank trucks
and sold to the end users, primarily state highway organiza-
tions and construction contractors.
17.2.2 Size of the Cutback Asphalt User Industry
This report addresses the size of the cutback asphalt
user industry in Georgia. Although some cutback asphalt
may be produced in Georgia, the production industry is not
the focus of this study since RACT requires control of the
use of cutback asphalt. Thirty-four thousand and one
hundred-ninety tons of cutback asphalt were purchased in
Georgia in 1977 at a value of $3.2 million. An estimated
12,821 tons of cutback asphalt worth $1.2 million were
sold in the 12 non-attainment counties. The value is based
on an estimated average price per gallon of $0.36.
Though the uses of cutback asphalt in Georgia are well
documented, hard data on the number of employees involved
in cutback paving operations are not currently available.
Still, it is possible to make a reasonable estimate of the
number of employees based on data found in the Department
of Commerce County Business Patterns. It is estimated
17-5
-------
that in the 12 non-attainment counties approximately 325a
people are engaged in operations where cutbacks can be
used.
17.2.3	Comparison to Statewide Economy
The value of shipments of cutback asphalt to the state-
wide value of wholesale trade in Georgia is less than 0.05
percent.
17.2.4	Demand for Cutback Asphalt
In the 1920's and 1930's, the increasing sales of
automobiles stimulated highway construction. The need for
low cost pavement binders which provided weather resistance
and dust free surfaces became apparent during this building
cycle. Cutback asphalts emerged to fill this need. After
World War II, the sale of cutback asphalts remained at an
almost constant level. Since 1973, the use of cutback
asphalt has decreased. Exhibit 17-2, on the following page,
shows national sales from 1970 to 1976 of cutback asphalt,
asphalt cement, and asphalt emulsions.
17.2 Prices of Products and Costs of Usage
Historically, cutback asphalts have been up to 10 percent
more expensive per gallon than asphalt emulsions. In recent
years, this differential has been negligible; however, in
the past two years the historical price disadvantage has begun
to reemerge.
In the non-attainment counties approximately 3,250 people were
employed in highway and street construction. It is assumed that
the number of people employed m cutback and emulsion applications
is proportional to the 3,250 people. The factor of proportion-
ality is the ratio of 1977 state sales of cutbacks and emulsions
to 1977 state sales of all petroleum asphalts and road oils. At
an estimated 10 percent, employment is approximately 325. At the
state level, the 10 percent ratio implies a labor force between
500-999. See: County Business Patterns 1976: Georgia, U.S.
Department of Commerce CBP-76-12, 1978, p. 3.
17-6
-------
YEAR
ASPHALT CEMENT
Percent
Use of	of Total
(000 of tons)
EXHIBIT 17-2
U.S. Environmental Protection Agency
HISTORICAL NATIONAL SALES OF ASPHALT CEMEMT,
CUTBACK ASPHALT AND ASPHALT EMULSIONS
CUTBACK ASPHALT
Percent
Use of	of Total
(000 of tons)
ASPHALT EMULSIONS	TOTAL
Percent
Use of	of Total Use of
(000 of tons)
1970
1971
1972
1973
1974
1975
1976
17,158
17,612
18,046
20,235
19,075
16,324
16,183
72.7
73.8
74.2
74.8
77.4
75.7
75.3
4,096
3,994
3,860
4 ,220
3, 359
3,072
3,038
17.4
16.7
15.9
15.6
13.6
14.2
14.2
2, 341
2,275
2,399
2,585
2,208
2,197
2,254
9.9
9.5
9.9
9.6
9.0
10.1
10.5
23,594
2 3,82 L
24 ,305
27,040
24 ,642
21,593
21,474
Source:
U.S. Bureau of Mines
-------
The comparison between cutbacks and emulsions is some-
what different when one looks at quantity requirements.
Though technically interchangeable in many applications, it
is typically the case that more emulsion must be applied
than cutback for an identical task. This is because emul-
sions have a lower asphalt content than cutbacks on a per
gallon basis. Estimates on quantity conversions (substitu-
tability) range from one-to-one to one-to-two in favor
of cutbacks depending on the type of emulsion and the given
application.
However, in terms of average cost of usage, currently,
price and quantity differentials tend to be offsetting.
Thus the cost of usage should be approximately the same.
a Interview materials from The Asphalt Institute, College Park,
Maryland
b Ibid. Contentions that the price/per mile of emulsions is
cheaper than oil based asphalts are currently being made.
Though true, the contention is misleading because the comparison
is between hot mix asphalts and emulsions in overlay applications.
Cutbacks are not used in overlay applications.
Source: Booz, Allen & Hamilton, Inc.
17-7
-------
17.3 THE TECHNICAL'SITUATION IN THE INDUSTRY
This section presents information on the use and pro-
duction of asphalt. The sources and characteristics of
VOC emissions from the use of cutback asphalt are then
described and are followed by estimated statewide VOC
emissions from the use of cutback asphalt; the VOC control
measures required by RACT, and the VOC emission control
procedure for use of cutback asphalt in Georgia.
17.3.1 Asphalt: Its Production and Uses
Asphalt is a product of the distillation of crude oil.
It is found naturally and is also produced by petroleum
refining. In the latter instance, the crude oil is dis-
tilled at atmospheric pressure to remove lower boiling
materials. Nondistillable asphalt is then recovered from
selected topped crude by vacuum distillation; oil and wax
are removed as distillates; and the asphalt is left as a
residue. Asphalts can be produced in a variety of types
and grades ranging from hard brittle solids to almost water
thin liquids. The type of asphalt produced depends on its
ultimate use.
Asphalt is used as a paving material and in a wide
range of construction applications. The cutback and emul-
sion asphalts that are the object of RACT legislation are
paving materials used primarily in spraying and cold mix
patching operations. For further information on asphalt
production and use the reader is referred to: A Brief
Introduction to Asphalt and Some of its Uses, The Asphalt
Institute, 1977.
17.3.2 Sources and Characteristics of VOC Emissions From
the Use pf Cutback Asphalt
Hydrocarbons evaporate from cutback asphalts at the
job site and at the mixing plant. At the job site, hydro-
carbons are emitted from equipment used for applying the
asphaltic product and from road surfaces themselves. At
the mixing plant, hydrocarbons are released during mixing
and stockpiling. The largest source of emissions, however,
is the road surface itself. In Georgia, cutback asphalt is
used in the construction and maintenance of secondary roads
throughout the state.
17-8
-------
It is the petroleum distillate (diluent) in the cur-
back asphalt that evaporates. The percentage of diluent
that evaporates depends on the cure type.
The evaporating diluent in the three types of cutback
asphalt constitutes the following percent of the asphalt
mix by weight:
Slow cure—25 percent
Medium cure—70 percent
Rapid cure—80 percent.
17.3.3 Statewide and Non-Attainment Area Emissions
Total emissions from the use of cutback asphalt in
Georgia during 1977 are estimated to be 7,070 tons. In
non-attainment counties approximately 2,660 tons of VOC
were emitted. But given permitted RACT exemptions on cut-
back curtailment, only 1,460 tons will be subject to con-
trol.3 See Exhibit 17-3 for details.
17.3.4 RACT Guidelines and the Implications of Their
Implementation
Presently, the State of Georgia is preparing draft
legislation on the use of cutback asphalt which will be
modeled after the RACT guidelines.
The RACT guidelines specify that the manufacture,
storage and use of cutback asphalts may not be permitted
unless: long life storage is necessary; application at
ambient temperatures below 50°F is nececcary; or applica-
tion as a penetrating prime coat is necessary.
Given these exemptions, general experience with asphalt
emulsions in several regions of the U.S. indicates that emul-
sions are adequate substitutes for cutbacks.13 Moreover, the
same equipment that is used to apply cutback asphalt can be
used with asphalt emulsions after minor modification. The
few changes necessary to replace cutback asphalt with emul-
sion asphalt are as follows:
Representatives of the Georgia Department of Transportation have
indicated that RACT exemptions could account for 45% of current
cutback usage.
It is reported that emulsions cannot be applied in the rain. This
is also true for rapid and medium cure cutbacks.
17-9
-------
EXHIBIT 17-3
U.S. Environmental Protection Agency
ESTIMATED HYDROCARBON EMISSIONS
FROM USE OF CUTBACK ASPHALT IN GEORGIA
Sales3 pf
Cutback Asphalt
(000 Tons)
Estimated
Hydrocarbon Emissions
	in 1977
(000 Tons)
Estimated Non-Exempted
Hydrocarbon Emissions in J 977
(000 Tons)
Rapid Medium Slow Rapid Medium Slow
Cure
Cure
Cure Cure
Cure
Cure Total
State
11.97 22.22
2.44
4.64
7.07
12 Non-Attainment
Counti esb
4.49 8.33
.92
1. 74
2.6
1.460c
Source: U.S. Department of Energy, Bureau of Mines
Sales in the 12 non-attainment counties are assumed to be proportional to total state sales.
The factor of proportionality is the fraction of the state population livinq in the 12 counties.
55 percent of emissions are from non-exempted cutbacks. Sen footnote (a) to section 173.3.
Source: Booz, Allen & Hamilton Inc.
-------
Retrain employees on the use of asphalt emulsions.
Modify cutback asphalt equipment to accomodate
asphalt emulsions, including:
Providing new nozzles on the distributor
truck which applies the asphalt
Adjusting the pumps which apply the emul-
sion
- Cleaning equipment prior to using emulsion
Create emulsion plant capacity to meet the in-
creased demand
Provide asphalt manufacturing facilities with
venting for steam.
17-10
-------
17.4 COST AND HYDROCARBON REDUCTION BENEFIT EVALUATIONS FOR
RACT REQUIREMENTS
Costs for using asphalt emulsions in place of cutback
asphalts are presented in this section. Each cost item is
discussed, quantified, and then the total cost is calculated
in the non-attainment areas.
17.4.1 Costs Associated With Using Asphalt Emulsions in
Place of Cutback Asphalt
The information on the costs of using asphalt emulsions
in place of cutback asphalt was gained from interviews with
asphalt trade association members, asphalt manufacturers,
and from analysis of existing studies on asphalt.
Costs to users of cutback asphalt who must convert to
emulsions are primarily those expenditures associated with
retraining personnel and making minor equipment modifica-
tions. The existing price/gallon advantage accruing to
emulsions is approximately offset by the quantity advantage
accruing to cutbacks (in terms of required asphalt content
and comparitive durability). Put differently, expenditures
on materials should remain approximately constant, but those
on capital and labor should increase as users convert to
asphalt emulsions.
The most significant cost to the user will be for re-
training personnel in the methods of asphalt emulsion appli-
cation. It is estimated that these training costs are $300
per person including the cost of supervision for the train-
ing session.
Modification of trucks used in applying asphalt consists
of replacing nozzles at a cost of $5 per nozzle. An average
truck -is equipped with 30 nozzles; therefore, the cost per
truck would be $150. Other equipment costs include adjust-
ing pumps and cleaning equipment before asphalt emulsions
can be applied, and these are considered to be minimal.
Total user costs are assumed to be incurred on a one
time basis. Minor equipment costs are generally not capi-
talized but are expensed in the accounting period in which
they are incurred. The paragraph which follows shows total
costs to the non-attainment counties for converting from the
use of cutback asphalt to asphalt emulsion.
17-11
-------
17.4.2 Extrapolation to the Industry in the Non-Attam-
ment Counties
Converting from cutback asphalts to asphalt emulsions
in the non-attainment counties is estimated to cost $55,57 5.
This translates into $38.06 per ton of hydrocarbon emissions
reduced. A summary of these costs is given in Exhibit 17-4
on the following page.
17-12
-------
EXHIBIT
U.S. Environmental
COSTS IN GEORGIA
RACT TO THE USE OF
17-4
Protection Agency
FOR APPLYING
CUTBACK ASPHALT
Direct Cost Summarv
Cutback asphalt used in
non-attainment counties
(tons per year)	12,80C
Potential emissions reduction3
from converting to use of emulsion
asphalt (tons per year)	1,460
Retraining costs^	531,200
Equipment modification costsc	$24,373
Total one-time costs	$55,575
One-time costs per ton of	$38.06
emissions reduced
Annualized operating cost
per ton of emission reduced	$ 0-0
Assumes 45% of cutback usage will be exempted.
Retraining costs are calculated in two stages.
First, it is assumed that the percent of the
labor force unfamiliar with emulsion application
will be roughly equal to a proxy ratio which re-
lates sales of cutbacks to sales of cutback plus
emulsions in 1977. Since the sales of cutbacks
were 34,190 short tons and those of emulsions
71,761, the proxy ratio is about one-third.
Second, this proxy is multiplied by the esti-
mated total labor force (325) and the cost
per person ($300).
Representatives of national asphalt organizations
have suggested that for every two workers there
is approximately one distributor truck. This
implies that 162.5 trucks will need modification
at a cost of $150 per truck.
Source: Booz, Allen & Hamilton Inc.
-------
17.5 ECONOMIC IMPACTS
This section discusses the economic impacts associated
with applying RACT to the use of cutback asphalt m Georgia.
The direct economic impacts include:
User Cost—The estimated one-time cost of $55,575
distributed over 12 counties in Georgia is small
compared to the $162,000,000 allocated for construc-
tion and maintenance in the fiscal 1978 state budget.
Price—The prices of cutback and emulsion asphalts
may be marginally affected by RACT to the extent
that demand ^.and supply shifts for both products are
not offsetting. However, it is not RACT but rather
the increasing cost of diluents used in cutbacks
which will have the most decisive impact on price
differentials in the future.
Demand—If current usage patterns prevail through
1981 when RACT is scheduled for implementation,
then the demand for cutbacks might fall off by 55%
while the demand for emulsions rises by 21%.
Employment—No change in employment is predicted
from implementing RACT, although it will be neces-
sary to retrain approximately 325 employees in
Georgia on the use of asphalt emulsions.
Productivity—Given appropriate retraining, worker
productivity is not expected to be affected by
handling more emulsion asphalts.
In addition to direct impacts there may also be indirect
effects. Implementing RACT may cause a strain on current in-
dustry capacity to meet the increased demand for emulsion
asphalts. To the extent that a supply-demand imbalance is
inherent, it may be necessary for producers to invest in new
plant capacity. Presently, it is anticipated that sufficient
lead time exists for any supply-demand imbalance to be re-
dressed. Insufficient data are available to quantify these
potential costs in Georgia.
Exhibit 17-5, on the following page, presents a summary
of the findings in this report.
17-13
-------
EXHIBIT 17-5(1)
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR USE OF
CUTBACK ASPHALT IN THE STATE OF GEORGIA
Current: Situation
Use potentially affected
Indication of relative importance
of 'industrial section to non-
attainment county economies
Current industry technology
trends
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of control to meet
RACT guidelines
Affected Areas in Meeting RACT
Capital investment in
non-attainment areas
Annualized cost
in non-attainment areas
Price
Energy
Productivity
Employment
Discussion
In 1977, use of cutback asphalt was
34,190 tons statewide and an estimated
12,821 tons in non-attainment counties.
1977 sales of cutback asphalt were
estimated to be $3.2 million state-
wide ana 51.2 million in non-attain-
ment counties.
Nationally, use of cutback asphalt
has been declining.
7,070 tons annually statewide; 2,660
in non-attainment counties, 1,460 of
which are non-exempted
Replace with asphalt 'emulsions
Reylace with asphalt emulsions
Discussion
$0.06 million
No changes in paving costs are expected.
No changes in paving costs are expected.
14,100 equivalent barrels of oil saveda
No major impact
No major impact
The saving accrues to manufacturer, not user. The total energy
associated with manufacturing, processing and laying one gallon
of cutback is approximately 50,200 BTUs/gallon. For emulsified
asphalts, it is 2,830 BTUs/gallon. One barrel of oil equivalent
is assumed to have 6.05 million BTUs, and one ton of cutback
asphalt is assumed to have 256 gallons.
-------
EXHIBIT 17-5(2)
U.S. Environmental Protection Agency
RAIT timma recuirements (1981)
Long ranee supply of asphalt emulsions
are expected to be available.
Problem area
Winter paving
Short ranae sucdIv of asohalt emulsions
VOC emission after RACT control
Net VOC emission reduction is estimated
to be 1,460 tons annually
Cost effectiveness of RACT
control
The cost is $38.06 per ton in the
first year. In subsequent years
the cost is zero.
Source: Booz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
Control of Volatile Organic Compounds from the Use of
Cutback Asphalt^ EPA-450/2-77-037, December 1977.
Air Quality and Energy Conservation Benefits from Using
Emulsions to Replace Cutbacks m Certain Paving Operations/
EPA-450/12-78-004, January 1978.
Mineral Industry Surveys: Asphalt Sales, Annual U.S. Depart-
ment of the Interior, Bureau of Mines, Washington, D.C.
Magic Carpet; The Story Of Asphalt, The Asphalt Institute,
College Park, Maryland.
Technical Support for RACT Cutback Asphalt, State of Illinois
"World Use of Asphalt Emulsion," paper presented by Cyril C.
Landis, Armak Company.
A Brief Introduction to Asphalt and Some of Its Uses, The
Asphalt Institute, College Park, Maryland.
Asphalt: Its Composition, Properties and Uses, by Ralph N.
Traxler, Rheinhold Publishing Corp., New York, 1961.
County Business Patterns 1976: South Carolina, U.S. Depart-
ment of Commerce, CBP-76-12.
Mr. Gladstone, Federal Highway Administration Statistics on
State Highway Construction and Maintenance Expenditures.
Atmospheric Emissions from the Asphalt Industry,
EPA-650/2-73-046, December 1973.
Energy Requirements for Roadway Pavements, The Asphalt
Institute, College Park, Maryland, Misc.-75-3, April 1975.
Asphalt Hot-Mix Emission Study, The Asphalt Institute,
College Park, Maryland, Research Report 75-1 (RR-75-1),
March, 1975.
"Hot-Mix, Cutbacks and Emulsions" by Fred Kloiber, Natural
Asphalt Pavement Association, Special Report, November 4, 1977.
Mr. Fred Kloiber, National Asphalt Pavement Association.
Mr. Steven Patterson, U.S. Bureau of Mines.
-------
Mr. Charles Owens, Asphalt Institute.
Mr. Frank Kerwin, U.S. EPA.
Mr. Vaughan Marker, The Asphalt Institute, College Park,
Maryland.
The Asphalt Handbook, The Asphalt Institute, April 1965.
Mr. Charles Maday, U.S. EPA.
Mr. Terry Drane, Emulsified Asphalt, Inc.
-------
TECHNICAL REPORT DATA
(Please read holme not 11 on the reverse hejore completing)
l REPORT NO 2
904/9-79-033
3 RECIPIENT'S ACCESSION NO.
¦1 TITLE AND SUBTITLE
Economic Impact of Implementing RACT guide-
lines in the State of Georgia
5. REPORT DATE
6. PERFORMING ORGANIZATION CODE
7 AUTHORIS)
8. PERFORMING ORGANIZATION REPORT NO.
9. PERFORMING ORGANIZATION NAME AND ADDRESS
Booz, Allen & Hamilton Inc.
Foster D. Snell Division (Florham Park, N.J.)
& Public Management Technology Center
(Bethesda, MD)
10. PROGRAM ELEMENT NO.
11. CONTRACT/GRANT NO.
68-02-2544, Task 6
12. SPONSORING AGENCY NAME AND ADDRESS
U.S. Environmental Protection Agency
Region IV
Air Programs Branch
Atlanta, Georgia 30308
13. TYPE OF REPORT AND PERIOD COVERED
Final Report
14. SPONSORING AGENCY CODE
15. SUPPLEMENTARY NOTES
EPA Project Officer: Winston Smith
16. ABSTRACT
The major objective of the contract effort was to determine the
direct economic impact of implementing RACT standards in Georgia. The
study is to be used primarily to assist EPA and Georgia decisions on
achieving the emission limitations of the RACT standards.
The economic impact was assessed for the following RACT industrial
categories: surface coatings (cans, paper, fabrics, automobiles, metal
furniture and large appliances); solvent metal cleaning; bulk gasoline
terminals; bulk gasoline plants; storage of petroleum liquids in fixed
roof tanks; gasoline dispensing stations—Stage I; and use of cutback
asphalt.
The scope of this project was to determine the costs and direct
impact of control to achieve RACT guideline limitations for these 12
industry categories in Georgia. Direct economic costs and benefits
from the implementation of RACT limitations were identified and quanti-
fied while secondary impacts (social, energy, employment, etc.) are
addressed, they were not a major emphasis in the study.
17. KEY WORDS AND DOCUMENT ANALYSIS
a. DESCRIPTORS
b.IDENTIFIERS/OPEN ENDED TERMS
c. COSATl Field/Group
Gasoline marketing
Air pollution
Metal coatings
Solvent substitution
Emission limits
Air pollution control
Stationary sources
Georgia
Economic impact
Hydrocarbon emissions
Coatings

13 DISTRIBUTION STATEMENT
Unlimited
^ncl ass Repor"
21 NO. OF PAGES
20. SECURITY CLASS (This page 1
Unclassified!
22. PRICE
EPA Form 2220-1 (9-73)
-------
Library Regie® IV
US Environmesiial Psrdedioa Agency
345 Coasllasid Street
Afckmta, Georgia 30365
DATE DUE I
-------