United States Region IV EPA 904/9-79-038
Environmental Protection Air Programs Branch April 1979
Agency Atlanta, Georgia 30308
Air
s>EPA
Economic Impact
of Implementing
RACT Guidelines in
the State of Alabama
-------
EPA-904/9-79-038
J? *t>
FINAL REPORT
ECONOMIC IMPACT OF IMPLEMENTING TWO RACT
GUIDELINES IN THE STATE OF
ALABAMA
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
Prepared for:
U.S. ENVIRONMENTAL PROTECTION AGENCY REGION IV
Air and Hazardous Materials Division
Atlanta, Georgia
EPA PROJECT OFFICER: Winston Smith
from:
BOOZ, ALLEN & HAMILTON Inc.
May, 1979
-------
This air pollution report is issued by Region IV of the
U.S. Enviromental 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 ALABAMA
4.0 ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR SURFACE COATING OF
METAL FURNITURE IN THE STATE
OF ALABAMA
iii
-------
LIST OF EXHIBITS
-------
1
2
3
4
1
1
2
3
¦4
¦5
6
¦7
8
LIST OF EXHIBITS
Exhibit Following Page
LISTING OF EMISSION LIMITATIONS THAT
REPRESENT THE PRESUMPTIVE NORM TO BE
ACHIEVED THROUGH APPLICATION OF RACT
FOR SPECIFIC INDUSTRY CATEGORIES 1-3
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR CAN MANUFACTURING
PLANTS IN THE STATE OF ALABAMA 1-6
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR SURFACE COATING
OF METAL FURNITURE IN ALABAMA 1-7
SUMMARY OF IMPACT OF IMPLEMENTING RACT
GUIDELINES IN TWO INDUSTRIAL CATEGORIES—
ALABAMA 1-8
LISTING OF EMISSION LIMITATIONS THAT
REPRESENT THE PRESUMPTIVE NORM TO BE
ACHIEVED THROUGH APPLICATION OF RACT
FOR SPECIFIC INDUSTRY CATEGORIES 2-4
DATA QUALITY 3-5
LIST OF METAL CAN MANUFACTURING FACILITIES
POTENTIALLY AFFECTED BY RACT IN ALABAMA 3-6
ALABAMA EMISSION INVENTORY AS REVISED BY
BOOZ, ALLEN & HAMILTON INC. 3-9
EMISSIONS FOR TYPICAL COATING OPERATION
USED IN THE MANUFACTURE OF TWO-PIECE CANS 3-10
COATING AND PRINTING OPERATIONS USED IN
THE MANUFACTURE OF THREE PIECE CANS 3-10
EMISSIONS OF TYPICAL COATING OPERATIONS
USED IN THREE-PIECE CAN ASSEMBLY 3-10
RACT GUIDELINES FOR CAN COATING OPERATIONS 3-10
PERCENTAGE OF CANS MANUFACTURED USING
EACH ALTERNATIVE IN 19 82 3-11
IV
-------
9
10
11
12
1
2
3
4
5
6
7
8
9
Exhibit
Following Page
EMISSIONS FROM COATING THREE-PIECE 3-16
CANS PER MILLION CANS
COST OF IMPLEMENTING RACT ALTERNATIVES
FOR REPRESENTATIVE CAN MANUFACTURING
PLANTS 3-18
COST OF COMPLIANCE TO RACT FOR THE
CAN MANUFACTURING INDUSTRY IN ALABAMA 3-20
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR CAN MANUFACTURING
PLANTS IN THE STATE OF ALABAMA 3-20
SURFACE COATING OF METAL FURNITURE DATA
QUALITY 4-5
LIST OF MANUFACTURERS POTENTIALLY AFFECTED
BY RACT GUIDELINES FOR SURFACE COATING OF
METAL FURNITURE IN ALABAMA 4-6
SUMMARY OF HYDROCARBON EMISSIONS FROM
METAL FURNITURE MANUFACTURING FACILITIES
IN ALABAMA 4-7
EMISSION LIMITATIONS FOR RACT IN SURFACE
COATING OF METAL FURNITURE 4-7
RACT CONTROL OPTIONS FOR THE METAL
FURNITURE INDUSTRY 4-7
ESTIMATED COST OF CONTROL FOR MODEL
EXISTING ELECTROSTATIC SPRAY COATING
LINES 4-9
ESTIMATED COST OF CONTROL OPTIONS FOR
MODEL EXISTING DIP COATING LINES 4-9
STATEWIDE COSTS FOR PROCESS MODIFICATIONS
OF EXISTING METAL FURNITURE COATING LINES
TO MEET RACT GUIDELINES FOR VOC EMISSION
CONTROL 4-10
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR SURFACE COATING
OF METAL FURNITURE IN ALABAMA 4-13
v
-------
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
two industrial categories in the state of Alabama. Further
discussion and data are presented in detail in the subsequent
chapters of the report. This Executive Summary is
divided into two sections:
Objectives, Scope and Approach
Economic Implications of Each RACT Guideline
and Statewide Aggregate
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 oxidant
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 Alabama was to determine
the costs and direct impacts of control to achieve RACT guide-
line limitations in two 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, ener-gy, 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.
In Alabama, the economic impact was assessed
for the following RACT industrial categories:
Surface coating of cans
- Surface coating of metal furniture.
1-2
-------
In the determination of the economic impact of the
RACT guidelines, the following are the major study guidelines:
The emission limitations for each industrial
category were studied at the control level
established by the RACT guidelines. These
are presented in Exhibit 1-1, on the following
page.
The timing requirements for implementation of
controls to meet RACT emission limitations
was December 31, 1982.
All costs and emission data were presented
for 1977.
Emission sources included were existing
stationary point sources in the applicable
industrial categories with VOC emissions:
In urban nonattainment areas—
greater than 3 pounds in any hour or
15 pounds in any day
In rural areas—greater than 100 ton
potential annually.
The following volatile organic compounds were
exempted:
Methane
Ethane
Trichlorotrifluorethane (Freon 113)
- 1,1,1-trichloroethane (methyl chloroform).
1-3
-------
EXHIBIT 1-1
U.S. Environmental Protection Agency
LISTING OF EMISSION LIMITATIONS THAT REPRESENT
THE PRESUMPTIVE NORM TO BE ACHIEVED THROUGH
APPLICATION OF RACT FOR SPECIFIC INDUSTRY CATEGORIES
Category
Surface coating of cans
Sheet base coat (exterior and
interior)
Overvarnish
Two-piece can exterior (base-
coat 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
Surface coating of metal furniture
Prime and topcoat or single coat
RACT Guideline Emission Limitations
Surface Coating Categories Based on
Low Organic Solvents (lbs. solvent
per gallon of coating, minus water)
2.8
4.2
5.5
3.7
3.0
Source; Regulatory Guidance for Control of Volatile Organic Compound Emissions
from 15 Categories of Stationary Sources, U.S. Environmental Protection
Agency, EPA-905/2-78-001, April 1978.
-------
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.
For the two surface coating RACT industrial categories
studied (cans and metal furniture), the potentially affected
facilities, emissions and emission characteristics were ob-
tained primarily from the state emission inventory. Therefore,
the following generalized methodology was applied:
A list of potentially affected facilities
was compiled from secondary reference sources.
Data from the emission inventory were categorized
and compiled for each RACT industrial category.
Firms not listed in the emission inventory
were identified. Some of these facilities
were then interviewed by telephone when there
was doubt concerning their inclusion.
Emissions, emission characteristics, control
options and control costs were studied for
relevant firms.
Interviews were conducted to determine appli-
cable control options and potential control
costs.
The study team then evaluated the control cost
to meet the RACT requirements and the potential
emission reduction.
1-4
-------
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.
1-5
-------
1.2 ECONOMIC IMPLICATIONS OF EACH RACT GUIDELINE
AND STATEWIDE AGGREGATE
-------
1.2 ECONOMIC IMPLICATIONS OF EACH RACT GUIDELINE AND STATEWIDE
AGGREGATE
This section presents a summary of the economic impact
for the two RACT industrial categories studied in Alabama.
The aggregated economic implications are then presented in
terms of cost of control versus emission reductions.
1.2.1 Surface Coating of Cans
Currently there are six major can coaters in the state
of Alabama. The Birmingham area is a major supplier of coated
can stock to can assembly plants located in the southeast sec-
tion of the nation. The coated stock industry has been declining
in recent years because of the rapid growth of two-piece cans.
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 replace some
three-piece can facilities with two-piece can facilities which
inherently have lower emissions (where commercially feasible),
convert three-piece can lines to waterborne coatings or install
thermal incineration for controlling high solvent coatings.
As a result of the industry trend toward two-piece can
lines, a number of the precoated stock facilities in Alabama
may shut down in the near term, regardless of the RACT
requirements. In some cases, the capital requirements of meeting
the RACT standards may be a contributing factor towards a deci-
sion to shut down a marginally profitable precoated stock facility.
The emission controls to meet the RACT requirements represent an
estimated $1.1 million in capital and $0.5 million in annualized
costs. However, much of this investment is already in place to
meet the Jefferson County smoke regulations. The incremental
cost of meeting the RACT requirements (above current control
levels) is estimated to be $100,000 in capital and $20,000
in annualized cost. This cost represents approximately 1
percent of the value of shipments manufactured for those
facilities currently not meeting the RACT requirements.
Exhibit 1-2, on the following page, presents highlights of
the study findings, which are presented in detail in Chapter 3
of this report.
1-6
-------
EXHIBIT 1-2
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING PACT TOR CAN MANUFACTURING
PLANTS IN THE STATE OF ALABAMA
Current Situation
Number of potentially affected facilities
Indication of relative importance of indus-
trial section to state economy
Current industry technology trends
TOC emissions
Industry preferred method of VOC control
to meet PACT guidelines
Discussion
There are 6 can manufacturing facilities
The Birmingham area is a major source of precoated
can stock but contains minimal can manufacturing
facilities. The 1977 value of shipment was about
$23 million.
Seer and beverage containers rapidly
changing to f«o-piece construction
1,600 tons per year (Booz, Allen estimate);
theoretical uncontrolled level is 2,300 tons
per year
Low solvent coatings (waterborae) with incineration
as an interim approach for older facilities
Affected Areas in Meeting PACT
Capital investment (statewide)
Annualized cost (statewide)
Energy
Productivity
Employment
Market structure
Problem area
VOC emission after PACT
Cost effectiveness of RACT
$1.1 million from the uncontrolled state.
However, most facilities have control due to
smoke regulations. Approximately $100,000
would be the incremental capital requirements
above current levels of control.
$0.5 million from the uncontrolled state.
However, incremental annualized costs are
estimated to be $20,000 (above current control
levels)
Assuming a direct pass-through of costs, no
significant change in price
8,600 equivalent barrels of oil annually
to operate incinerators (virtually no increase
from 1977 level, assuming incinerators are
operating 90 percent efficiency)
No ma^or impact
Mo major impact
Accelerated technology conversion to
two-piece cans
Further concentration of sheet coating
operations into larger facilities
Low solvent coating technology for end
sealing compound
1,100 tons per year (70 percent of current
emission level)
$40 annualized cost/annual ton of VOC
reduction from currant level of control
Source: 3ooz, Alien J Hamilton Inc.
-------
1.2.2
Surface Coating of Metal Furniture
There are five facilities in Alabama 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 $150,000 in capital, and
the annualized cost of control would be approximately
$26,000.
No significant productivity, employment or market
structure dislocations should be associated with the imple-
mentation of the RACT guidelines.
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.
Exhibit 1-3, on the following page, presents highlights
of the study findings, which are presented in detail in
Chapter 4 of this report.
1-7
-------
EXHIBIT 1-3
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR SURFACE COATING OF METAL
FURNITURE IN ALABAMA
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)
Discussion
There are 5 metal furniture manufac-
turing facilities
1977 value of shipments was $78 million
industrywide and approximately $48
million for five affected facilities
Trend is towards the use of a variety
of colors
460 tons per year
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
Employment
Market structure
RACT timing requirements (1982)
Problem area
VOC emissions after RACT
Cost effectiveness of RACT
Low solvent coatings
Low solvent coatings
Discussion
$148,000
$26,000, which represents less than
0.1 percent of the value of ship-
ments from the five affected firms
No major change
No major impact
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
15 percent of current emissions
level)
$68 annualized cost/annual ton of
VOC reduction
Source: Booz, Allen & Hamilton Inc.
-------
1.2.3 Statewide Aggregate Economic Impact for the Two
RACT Guidelines Studied
The implementation of RACT emission limitations for
the surface coating of cans and metal furniture in Alabama
involves an estimated $250,000 in capital cost and approxi-
mately $50,000 annualized cost per year. The net VOC
emission reduction is estimated to be 880 tons annually
from a 1977 baseline of 2,060 tons. Exhibit 1-4, on the
following page, presents a quantitative summary of the emis-
sions, estimated cost of control, cost indicators and cost
effectiveness of implementing the two RACT guidelines
studied.
* * *
The remaining chapters present details on the findings
that are presented in this executive summary.
1-8
-------
EXHIBIT 1-4
U.S. Environmental Protection Agency
SUMMARY OF IMPACT OF IMPLEMENTING RACT
GUIDELINES IN TWO INDUSTRIAL CATEGORIES—ALABAMA
EmissIons
Cost of RACT Control
Cost Indicators
industry
Category
Number of
Facilities
Potentially
Affected
1977 VOC
Emissions
(tons/yr)
Estimated VOC
Emissions
After
Implementing
RACT
(tons/yr)
Net VOC
Emission
Reductions
Capital
Cost
(tons/yr) ($ millions)
Annualized
Cost (credit)
($ millions)
Annualized
Cost as
Percent of
Value of
Shipments3
(percent)
Annualized
Cost Per
Unit
Shipment
(cost per unit)
Effectiveness
Annualized
Cost (crediL)
Per Ton of VOC
Reduction
($ per tons/yr)
Surface coating
06 cans
1,600
1,100
500
0.10
0.02
neg.
$40
Surface coating
of metal
furniture
460
80
380
0.15
0.03
<0.1
neg.
$60
TOTAL
11
2,060
1,100
080
0.25
0.05
Note: Figures presented in this exhibit ace rounded and approximated for comparison purposes.
a. Value of shipments represent the estimated value of shipments for those firms in the specific industry category required to implement
controls to meet the RACT requirements.
b. This represents a negligible industrywide annualized cost per unit shipment.
Source: Uooz, Allen & Hamilton Inc.
-------
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
Definitions 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 RACT industrial categories (chapters 3 and 4).
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 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.
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, 197 8, and, as
a first step, the proposed SIP revisions and the type of
assistance 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 include in
the study these industrial segments most likely to have signifi-
cant impact at the statewide level. For the most part this
included industrial categories that had more than a few facili-
ties 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 ALABAMA AND THE
STATE'S NEED FOR CONTRACTOR SUPPORT
Alabama has designated five areas, three urban and two
nonurban, as nonattainment for ozone. In order to attain
the ambient ozone standards in these areas, the state has
proposed to reduce the volatile organic compound (VOC) emis-
sions from existing stationary sources in these areas by
implementing the Reasonably Available Control Technology
Guidelines developed by the EPA. In addition, the state has
proposed motor vehicle inspection/maintenance programs in
two areas. The state has also designated five areas as non-
attainment for total suspended particulates (TSP) and two
areas as nonattainment for sulfur dioxide (SO2) and has
proposed regulations to control the TSP and SO2 emissions
from existing sources.
The state officials were interviewed to determine their
need for support in analyzing the economic impact of the SIP
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 two of the 15 industrial categories for which the
EPA has published RACT guidelines. These two RACT industrial
categories were surface coating of metal cans and surface coating
of metal furniture. The other 13 industrial categories were ex-
cluded from this study because either a very limited number of
sources were affected by the proposed regulation in those cate-
gories or the state had the necessary resources to perform analy-
sis itself.
2-3
-------
2.3 SCOPE
The principal objective of this study is to determine
the costs and impact of compliance with the proposed SIP
revisions in six states in EPA Region IV. The study will
emphasize the analysis of direct economic costs and benefits
of the proposed SIP revisions. Secondary (social, energy
and employment) impacts will also be addressed, but are not
the major study emphasis.
In Alabama, the economic impact will be analyzed for
implementing RACT guidelines to reduce VOC from the follow-
ing two industrial categories:
Surface coating of cans
Surface coating of metal furniture.
In the determination of the economic impact of the RACT
guidelines, the following are the major study guidelines:
The emission limitations for each industrial
category were studied at the control level estab-
lished by the RACT guidelines. These are presented
in Exhibit 2-1, on the following page.
The timing requirement for implementation of con-
trols to meet RACT emission limitations is
December 1, 1982.
All costs and emission data were presented for
1977.
Emissions sources included were existing stationary
point sources in the applicable industrial cate-
gories with VOC emissions greater than 3 pounds in
any hour or 15 pounds in any"day in urban non-
attainment areas and greater than 100 tons per
year in nonurban and attainment areas.
The following volatile organic compounds were
exempted:
Methane
Ethane
Trichlorotrifluorethane (Freon 113)
1,1,1-trichloroethane (methyl chloroform)A
1 The exemption status of methyl chloroform under these guidelines
may be subject to change.
2-4
-------
Exhibit 2-1
U.S. Environmental Protection Agency
LISTING OF EMISSION LIMITATIONS THAT REPRESENT
THE PRESUMPTIVE NORM TO BE ACHIEVED THROUGH
APPLICATION OF RACT FOR SPECIFIC INDUSTRY CATEGORIES
a
Category RACT Guideline Emission Limitations
Surface Coating Categories Based on
Low Organic Solvents (lbs. solvent
per gallon of coating, minus water)
Surface coating of cans
Sheet basecoat (exterior and 2.8
interior)
Overvarnish
Two-piece can exterior (base-
coat and overvarnish)
Two and three-piece can 4.2
interior body spray
Two-piece can exterior end
(spray or rollcoat)
Three-piece can side-seam spray 5.5
End sealing compound 3.7
Surface coating of metal furniture
Prime and topcoat or single coat 3.0
Source: Regulatory Guidance for Control of Volatile Organic Compound Emissions
Irom 15 Categories of Stationary Sources, U.S. Environmental Protection
Agency, EPA-905/2-78-001, April 1978.
-------
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 Alabama. The
methodology applied to determine the economic impact for
each of the two RACT industrial categories in Alabama is
described in detail in each chapter dealing with the specific
RACT 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 cost 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
Current economics (financial) status
Industry concentration
Business patterns (small vs. large; downstream
integration)
2-5
-------
Age distribution of facilities
Future trends and developments.
For the two surface coating RACT industry categories
studied (cans and metal furniture) in Alabama, the industry
statistics were compiled as follows:
The facilities potentially affected by the RACT
guidelines were identified by the Alabama Air
Pollution Control Commission staff.
Industry category statistical data were compiled
using secondary sources such as:
Department of Commerce
Census of Manufactures
Trade associations
Bureau of Labor Statistics
National Technical Information Services.
The industry statistical data were refined by two
mechanisms:
Assessing the statistical data for reasonable-
ness in comparison to the list of potentially
affected facilities
Using industry and association interviews for
completion and validation.
2.4.2 VOC Emissions
An approach that made maximum use of the existing
Alabama emission data was defined.
State Air Pollution Control Commission represen-
tatives were interviewed to determine the complete-
ness and validity of emission data available for
each RACT industrial category. It was determined
that:
VOC emission data for major industrial sources
appeared to be reasonable.
2-6
-------
The emission data provided relevant data that
could be utilized for economic evaluation,
i.e., current emission levels (controlled and
uncontrolled emissions) and number of sources
(total and those controlled), type of control
implemented (if any) and average efficiency of
control.
The data base was compiled in a baseline con-
sistent with the RACT industrial categories.
The Alabama Air Pollution Control Commission pro-
vided data for the two industrial categories: cans
and metal furniture.
The emission estimates for each of the two RACT
industrial categories studied were refined during
industry interviews.
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 to 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:
2-7
-------
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 analysis to estimate
the cost of compliance.
Cost data presented within the body of the report were
standardized in the following manner:
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 25
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—8 percent
Taxes and insurance—3 percent
Maintenance—4 percent.
2-3
-------
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 oper-
ating costs included were:
Direct labor
Raw material costs (or savings)
Energy
Product recovery cost (or savings).
Other types of costs, not included in this analysis,
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 operating
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 compliance
costs rather than to estimate price changes or other secondary
effects of the regulation. Presented below are typical com-
parisons 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
relation to current prices of the manufactured
items at the potentially affected facilities, the
annualized cost is presented in terms of a price
increase assuming a direct pass-through of costs
to the marketplace.
2-9
-------
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 manufactured.
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.
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 state-
wide industrial category (i.e., including those
facilities which currently may meet the proposed
standard). This approach tends to understate the
effect to those specific firms requiring additional
expenses to meet the proposed standard. Therefore,
when available, the compliance cost is also presented
as a percent of the value of shipments for only
those firms not currently meeting the proposed regu-
lation.
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 (includ-
ing those facilities that may not require any capital
investment to meet the proposed standard).
2-10
-------
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 addition,
the study team has categorically ranked the overall data qual-
ity 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 per-
cent
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 are 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.
2-11
-------
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.
2-12
-------
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.
2-13
-------
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 the 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.
2-14
-------
3.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
CAN MANUFACTURING PLANTS
IN THE STATE OF ALABAMA
-------
3.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
CAN MANUFACTURING PLANTS
IN THE STATE OF ALABAMA
This chapter presents a detailed economic analysis of
implementing RACT controls for can manufacturing plants in the
State of Alabama. 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 benefit evaluations for
the most likely RACT alternatives
Direct economic implications.
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 Alabama.
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 were
developed from several sources since the census data do
not provide data for Alabama because of the concentration
of the industry. The sources included:
The 1972 Census of Manufactures
Data provided by the Alabama Air Pollution
Control Commission
Interviews with can manufacturers
Relevant experience developed in performing
similar studies for the EPA in Illinois, Ohio
Michigan and Wisconsin.
The value of shipments of the Alabama can manufacturing
industry was based on scaling up 1972 published data to 1977
and estimating the percentage of the cans that were produced
in Alabama.
The 1972 Census of Manufactures reported a total
U.S. volume of shipments of 78 billion units with
a value of $4.5 billion.
The value of shipments in the East South Central
Division was reported as:
State
Value of
Shipments, 1972
($ Million)
Percent of
U.S. Total
Alabama
Kentucky
Mississippi
Tennessee
Withheld
Withheld
Withheld
31. 7
0. 70
TOTAL
71.7
1.59
The value of shipments in 1976 in the U.S. was reported
to be $6,357 million. Based upon the same ratio of
state production to total U.S. production as in 19 72,
the 1976 production in the states was estimated to
have been:
State
1976 Value of
Shipments
($ Million)
Alabama
Kentucky
Mississippi
Tennessee
44. 7
TOTAL
101.2
3-2
-------
For 19 77, the Current Industrial Reports indicates that
the increase in production is 3 percent, with a 10 per-
cent increase in value of shipments. This factor was
used to estimate 1977 can production and the value
of shipments.
The can manufacturing industry in the states of Alabama,
Kentucky and Mississippi is estimated to have a value of ship-
ments of $56.5 million in 1976 and $62 million in 1977.
In 1972, 17 establishments had a value of shipments of
$71.7 million or $4.2 million per plant. Mississippi
was reported to have four establishments, and it was
assumed that their sales were $16.8 million in 1972
and $26 million in 1977. This leaves a balance of
$23.3 million in Alabama and Kentucky.
The four major plants in Alabama, along with fragmented
minor facilities, are estimated to have sales of
$2 3.3 million—Kentucky is assumed not to have a
can manufacturing industry.
The product mix of the type of cans currently produced
in the state was estimated using the national average
and refined using data obtained from the Alabama emis-
sion inventory and from interviews.
3.1.2 VOC Emissions
The data for determining the current level of emissions
from six plants was provided by the Alabama emission inventory.
These were compared with emissions estimated through the develop-
ment of representative can assembly plants.
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 Existing 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
control were also 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 manu-
facturing plants in Alabama. 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.
3-3
-------
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:
By can manufacturing technology
By type of can manufactured; i.e., beer vs. food
Determining the alternative approaches to control
likely to be used for each type of coating operation
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 Alabama.
Costs were determined from analysis of the previously
mentioned studies:
Control of Volatile Organic Emissions From
Existing 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.
3-4
-------
The cost of compliance and the expected emission reduction
in Alabama were developed based on the plant operational data
(included in the Alabama emission inventory) and discussions
with individuals at PEDCO Environmental Specialists, and were
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 Alabama.
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 Alabama. 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 inter-
views, analyses of previous studies and best engineering judg-
ment. Exhibit 3-1, on the following page, rates each study
output and overall quality of the data. However, emission
data are only as good as the assessment of the 1977 technical
approach to emission controls, particularly the degree of
usage of "exempt" solvents and the percentage of solvent
that is actually incinerated.
3-5
-------
EXHIBIT 3-1
U.S. Environmental Protection Agency
DATA QUALITY
C
"Estimated
Data"
Industry statistics #
Emissions £ #
Cost of emissions
control
A B-
"Hard "Extrapolated
Study Outputs Data" Data"
Statewide costs of
emissions
Overall quality of
data
Source: Booz, Allen & Hamilton Inc.
-------
3.2 INDUSTRY STATISTICS
Industry characteristics, statistics and business trends
for can manufacturing plants in Alabama are presented in this
section. Data in this section form the basis for assessing the
impact of implementing RACT to VOC emissions from can manufactur-
ing plants in the state.
3.2.1 Size of the Industry
There are approximately six can manufacturing facilities in
Alabama. The Birmingham area is one of the can manufacturing
centers in the Southeast. The can manufacturing industry in
Alabama appears to be relatively unique when compared to other
areas of the country. The industry assembles very few cans but
coats a significant quantity of steel plate which is shipped out
of the state. The state imports almost its entire requirements
of assembled cans. This phenomona is caused by the Birmingham
steel industry. Exhibit 3-2, on the following page, presents
a summary of can manufacturing facilities in the state.
The estimated number of employees in 1977 was 1,000 to
1,200. Can industry capital investments in Alabama are estimated
to have been less than $2 million, primarily for the rationaliza-
tion of existing plants. These plants are generally antiquated
and of declining importance.
3.2.2 Comparison of the Industry to the State Economy
The Alabama can manufacturing industry employs 0.1 per-
cent of the state labor force, excluding government employees.
The growth potential of the industry is not promising as the
U.S. can industry moves toward products that do not require
steel plate—the major rationale for establishing operations
in the Birmingham area.
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 Alabama,
the independent producers are the only can manufacturers.
3-6
-------
EXHIBIT 3-2
U.S. Environmental Protection Agency
LIST OF METAL CAN MANUFACTURING FACILITIES
POTENTIALLY AFFECTED BY RACT IN ALABAMA
Name of Firm
Continental Can Co.
Plant 410
Continental Can Co.
Plant 411
National Can Co.
Location
Jefferson County
Jefferson County
Jefferson County
Products
3-piece can assembly and
decorated can coated stock
Coated and decorated stock
can ends
Coated and decorated can
stock can ends
Notes
A plant shutdown is
reportedly being con-
sidered
SIRCO Systems
Jefferson County
Coated and decorated can
stock
Decorated can stock
Primarily produces steel
pails
George Frank Co.
Gerber Metal
Jefferson County
Jefferson County
Coated and decorated can
stock
Coated and decorated can
stock
Reportedly a new plant
built to replace capacity
being phased out by major
producers
Source: Booz, Allen & Hamilton Inc., Alabama Emissions Inventory
-------
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 vary-
ing 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 differ-
ent shapes, types 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.
Percent of
Type of Can 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 Alabama, the can industry is focused on meeting the
needs of can assembly plants in the southeast by providing
precoated stock.
Booz, Allen believes the can industry in Alabama produced
100 million cans in 1977 with a value of $7.0 million, as well
as coated stock for an estimated 3.2 billion cans that were
assembled out of state.
50 million food, general cans and aerosol cans
were produced almost entirely of three-piece
construction.
50 million three-piece beer and soft drink cans
were produced.
3-7
-------
Stock for 1.2 billion beer and soft drink cans was
coated for shipment to plants in other states.
Stock for 1.2 billion food and general purpose cans
was coated for shipment to plants in other states.
Stock for 0.8 billion food and general purpose cans
that were decorated only, for coating and assembly
in other states.
This estimate was based on combining three sources of data:
(1) the Alabama emissions inventory, (2) information on plant
operations developed in the interviews and (3) a methodology
developed by Booz, Allen (as a result of similar projects in
other states) that correlates emissions with can production
for several types of can manufacturing operations, specifically:
The total emissions, as developed later in this
report, was assumed to be about 2,800 tons.
The can assembly operations contributed about 50
tons.
25 percent of the sheet stock was decorated only,
resulting in no emissions.
37.5 percent of the sheet stock was decorated and
coated on two sides for the production of beer and
beverage cans. The resulting emissions were 0.4 65
tons per million cans.
37.5 percent of the sheet stock was coated on one
side for the production of food and general purpose
cans. The resulting emissions were 0.260 tons per
million cans.
End production was equivalent to twice the total
number of can blanks produced, resulting in emissions
of 0.435 tons per million cans.
An equation was developed and solved that indicated
that stock was coated for approximately 2.4 billion
cans and an additional 0.8 billion can blanks were
decorated but not coated.
The can industry in Alabama, as well as nationally, has
experienced rapid technological 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 beer and
beverage cans and a relatively small but growing percentage
of other cans will be of two-piece construction. There are
currently no two-piece can manufacturing facilities in the
state of Alabama.
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
emission control and the likely alternatives which may be
used for controlling VOC emissions in Alabama.
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. These technologies are fully
described in the RACT documents and therefore are not dis-
cussed in this study.
3.3.2 Emissions and Current Controls
This section presents the estimated VOC emissions from can
manufacturing facilities in Alabama in 1977 and the current
level of emission controls implemented in the state. Exhibit
3-3, on the following page, shows the total emissions from six
can manufacturing facilities to be about 1,600 tons per year.
The source of this emission data is the Alabama emission
inventory with minor revisions by Booz, Allen based on data
developed during interviews. The data indicate that, at the
present time, in-place controls have reduced emissions by
about 1,200 tons.
The industry in Alabama is currently partially controlling
emissions on an estimated 60 percent of the coating throughput
through the use of incineration designed to meet Jefferson
County regulations on smoke. There are currently no regulations
on hydrocarbon emissions.
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 beer can to a two-piece beer 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.
3-9
-------
EXHIBIT 3-3
U.S. Environmental Protection Agency
ALABAMA EMISSION INVENTORY AS REVISED BY
BOOZ, ALLEN & HAMILTON Inc.
Facility
Continental Can Co.
Plant 410
Product
3-piece can assembly
coated can stock
Number of
Emitting Sources
Gal./Yr.
(1000)
205
(a)
Lb./Gal.
9_5
-------
Exhibit 3-4 presents VOCs resulting from coating
operations used in the manufacture of two-piece
cans-
Exhibit 3-5 presents VOCs resulting from sheet
coating operations used in the manufacture of
three-piece cans.
Exhibit 3-6 presents VOCs resulting from typical
three-piece can assembly operations.
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
guideline, 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
3-7, following Exhibit 3-6, presents the recommended VOC
limitations, compared with typical, currently available, conven-
tional 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.
3-10
-------
EXHIBIT 3-4 11)
U.S. Env 1 roiunenta 1 Protection Agency
EMISSIONS FOR TYPICAL COATINC
OPERATION USED IN THE MANUFACTURE
OF TWO-PIECE CANS
Coating Properties
Operation
Organic Systems
Print and varnish
Size and print
White base coat and
print
Interior body spray
End coating A1
End coating steal
Low Solvent Systems
Density
(lb./gal.)
6.0
a.o
11.0
7.9
8.0
B.O
Sol ids
(wt. M
45
40
62. 5
26
45
45
Organic
Solvent
(wt. I) (lb./gal.)
100
100
100
100
100
100
4.40
4.80
4.13
5.85
4 .40
4 .40
Water
(gal. /qa L .
coating)
VOC
(lb. solvent/
gal. less water)
4.40
4 .BO
4.11
5.85
4 .40
4.40
VOC
(lb. solvent/
gal. incl. water)
4.40
4.80
4.1]
5.85
4.40
4.40
Yield
(1000 can/
gal.)
12
20
9
6"
200
40
Waturborne
Print and varniah 8.5
Snu and print 8.5
Whitu base coat and
l>i int 11.7
Interior body u|>ray 8.55
End coating AI 8.5
End co.ilimj iLcul 8.5
UV Cure High Solids
Print and varnish^ 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
0.5]
0.5]
2. 36
2.76
1 .55
3.99
2.36
2. 36
0.40
1.11
1.19
0.88
1. 36
1.11
1.11
0.40
11
17
8
5*
200
40
25
a. Assuming 75 percent boor cans, all given a single coat, and 25 percent soft drink cans, given a double coating
b. Boor, Allen L Hamilton, Inc. estimate ba^cd on data supplied by Q4I( Individual can auuiuf acturu rt> and the
EPA document 4tjU/J - 7 7-OOd
-------
EXHIBIT 3-4 (2)
U.S. EnvlronnenUL Protection Agency
Operation
Organic Systeas
Production
(cans/min.)
(Hill ion
cana/yr.)
Coating Consumed
(gal./hr.)
(1000 yal./yr-)
(lb./hr.)
VOC
(tona/yr.)
(lb./ml 11 Ion cans)
Print and varnish
Size and print
Wtiite base coat
and print
Interior body
spray
End coating A1
End coating steel
Low Solvent Systems
650
650
650
650
650
650
253.5
253.5
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. a
38.0
0.9
4.3
46.5
30.6
57.9
123.S
2.9
14.0
364
241
457
974
23
110
Waterborne
Print and varnish 650
Size and print 650
White base coat 650
and print
Interior body 650
spray
End coating A1 650
End coating steel 650
UV Cured High solids
Print and varnish 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: Booz, Allen ( Hamilton Inc. estimates based on data supplied by Can Manufacturers Institute and interviews with can companies.
-------
EXHIBIT 3-5 (1)
U.S. Environmental Protection Agency
COATING AND PRINTING OPERATIONS USED IN
THE MANUFACTURE OF THREE PIECE CANS
(Sheet Co*ting Operation)
Operation
Coating Properties
Dry Coating Thickness
Density
SolIds
Organic
Sol vent
Hater
VOC
VOC
( lb.
(lb./gal.)
(wt *)
(wt *)
(lb./gal.)
(gal/gal
coating)
(lb. solvent/
gal. leas
water)
(lb. solvent/
gal. including
water)
basebox)
Conventional Organlcs Systems
Sizing and print
Inside basecoat
Outside white and print
Outside sheet printing end
6.0
8.05
11.0
8.0
40
40
62. 5
45
100
100
100
100
4. 80
4.8]
4.13
4.40
0
0
0
0
4.80
4.83
4.13
4.40
4.80
4.83
4.13
4.40
5
20
40
10
0.086
0. 146
0.692
0.172
varnish
Low Solvent Systems
Sizing (waterborne)
8.5
30
20
1.19
0.57
2.76
1.19
5
0.086
Inside basecoat
High solids
8.0
80
100
1.60
0
1.60
1.60
20
0. 346
Haterborne
8.8
40
20
1.06
0.51
2.15
1.05
20
0.346
Outside white
High solids
12.0
80
100
2.40
0
2.40
2.40
40
0.69 2
Waterborne
11.7
62
20
0.89
0.43
1.55
0.88
40
0.692
Outside sheet print and
8.5
35
20
1.11
0.53
2. 36
1.11
10
0.172
varnish (wsterborne)
-------
EXHIBIT 3-5 (2)
U.S. Environmental Protection Agency
Operation
Conventional Organlea Systems
Sizing and print
Inside basecoat
Outside white and print
Outside sheet printing and varnish
Product Ion
(base box (IO00 base boxes3
Coating Consumption
VOC
hr.)
150
150
150
150
yuar)
240
240
240
240
(galIon
basebox)
.027
. 107
. 100
.048
(qa1Ion
hour)
4.1
16.1
15.0
7.2
(1000 gal.
year)
6.6
25.7
24.0
11.5
(lb.
hour)
19.7
77.8
62 .0
31.7
(tons
year)
15.8
62. 2
49.6
25.4
(
lb*.
1000 base boxes)
130
517
413
211
Low Solvent Systems
Sizing (waterborne)
Inside basecoat
High solids
Waterborne
Outside white
High solids
Waterborne
Outside sheet print and varnish
(waterborne)
150
150
150
150
150
150
240
240
240
240
240
240
.034
.054
.098
.072
.095
.057
5. 1
0.1
14. 7
10.8
14. 3
8.6
8.1
13.0
23.5
17.3
22.9
13.8
6.1
13.0
15.4
25.9
12.6
9.5
4.9
10.4
12.3
20.7
10.1
7.6
41
87
103
172
841
63
a. Assuming 1,600 hours per year of operation.
Source: Boot, Allen l Hamilton Inc. estimates based on data supplied by Can Manufacturers Institute and Interviews with can com l
-------
Operation
Organic
Penalty Solids Solvent
(lb./gal.) (wt. %) (wt. %) (lb./gal.
Organic Systems
Interior body apray
(beer) 7.9
Inaide stripe
(beer C bev.) 6.0
(food) 6.0
Outside stxlpe
(beer) 6.0
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 System* (waterborne)
Interior body spray
(beer) S.55
Inside stripe
(beer & bev.) 6.55
(food) 8.55
Outalde stripe
(beer) 8.55
End sealing compound
(beer & bev.)4 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 3-6 (1)
U.S. Environmental Protection Agency
EMISSIONS OF TYPICAL COATING
OPERATIONS USED IN THREE-PIECE
CAN ASSEMBLY
Coating Propertlea
Water VOC VOC Yeild
(gal./gal. (lb. solvent/ (lb. solvent/ (1000 cans/
coating) gal. leas water) gal. lncl. water) gal.)
5 .85
5 .85
6 .92
6.92
6.92
6.92
70
70
6.92
6.92
50
4. 30
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
-------
Organic Syatema
Low Solvent Systems
(Waterborne)
EXHIBIT 3-6 (2)
U.S. Environmental Protection Agency
Operation
Production Rate*1
(cans/mln.)
(Million
cans/yr.)
Coating Consumed
(gal,/hr.)
(1000 gal./yr.1
(lb./hr.)
vex:
(tons/yr.)
(lb./million cane)
Interior body
spray (beer)
Inside stripe
(beer 4 bev.)
(food)
Outside atrlpe
(beer)
End aealing
compound
(beer t 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
87.8
5.3
3.2
e. 3
26.0
15.6
1 ,463
88
88
138
433
433
Interior body
spray (beer)
Inside stripe
(beer fc bev.)
(food) .
Outside stripe
(bear)
End aealing
compound
(beer fc bev.)4
(food)4
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 average of 3,000 hours for food cans and 5,000 hours for beer and beverage cans.
Sourcei Booz, Allen I Hamilton Inc. estimates based on data supplied by CMI and individual can companies
-------
EXHIBIT 3-7
U.S. Environmental Protection Agency
RACT GUIDELINES FOR CAN COATING OPERATIONS
Typical Currently
Available
Coating Operation Recommended Limitation Conventional Coatings
kg. per liter lbs. per gallon lbs. per gallon
of coating of coating of coating
(minus water) (minus water) (minus water)
Sheet basecoat (exterior) 0.34 2.8 4.1-5.5
and interior) and over-
varnish; two-piece can
exterior (basecoat and
overvarnish)
Two- and three-piece can 0.51 4.2 6.0
interior body spray,
two-piece can exterior
end (spray or roll coat)
Three-piece can side-seam 0.66 5.5 7.0
spray
End sealing compound 0.44 3.7 4.3
Source: U.S. Environmental Protection Agency
-------
The choice between thermal incinerators
and catalytic incinerators will be based
on the availability of fuel and the pref-
erence 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 will not install carbon adsorption
systems because of the very poor performance record
established to date.
Eight likely control alternatives, as well as two
base cases, are discussed in the paragraphs below.
The percentage of cans likely to be manufactured by
each of the control option alternatives, by 1982, is
summarized in Exhibit 3-8, on the following page.
The resulting emissions are summarized in Exhibit
3-9, at the end of this section. For cases involving
incineration, the following assumptions were made.
Energy cost is $2.25 per million BTUs.
Capital cost is $20,000 per CFM.
Incinerators operate at 10 percent of the lower
explosive limit.
90 percent of the roller coating emissions are
collected and incinerated.
30 percent of the interior spray coating emissions
are collected and incinerated.
3.3.4.1 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.
3-11
-------
EXHIBIT 3-8
U.S. Environmental Protection Agency
PERCENTAGE OF CANS MANUFACTURED
USING EACH ALTERNATIVE IN 1982
Water-
borne or
Other Low
Solvent
Thermal
Incineration
with Primary
Can Type
Coatings Heat Recovery
Print Only,
All Low Solvent
Coatings
Low Solvent
Coatings
Except
End Sealant
Which Is
UV Cured
Outside Varnish
Waterborne
Incinerated Inside Spray
3-piece beer 25 20 — 55
and soft
drink
3-piece food 25 20 — 55
and other
cans
Sheet coating 40 60
and end com-
pounding in
feeder plants
of material
to be shipped
for assembly
elsewhere
Source: Booz, Allen & Hamilton Inc.
-------
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 differences has been elminated to reduce
the complexity of the study. Because of the declining importance
of three-piece beer and beverage cans, the impact will be smaller
in 1982 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) .
3.3.4.2 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 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 five
coating operations 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.
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 and belts and also
the can metal.
-'-Annualized capital cost includes depreciation, interest
taxes, insurance and maintenance.
3-12
-------
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 currently
acceptable 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
8 0 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. The acceptance of
this technology will be retarded by the lack of a complete
line of available coatings.
3.3.4.3 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. Several thermal incinerators
are currently being employed on coating lines in Alabama.
The capital required for five incinerators would be
about $320,000—assuming an installed cost of $20,000 per CFM.
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.
The total incremental cost of adopting thermal in-
cineration is estimated to be about $8 34 per million cans.
This represents a cost increase of about 0.2 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 prohibitively 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 Alabama in 1982.
3-13
-------
3.3.4.4 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.
3.3.4.5 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.
3.3.4.6 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.
3-14
-------
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 focus of research is on two-piece beer and
soft drink cans, which is the most rapidly
growing market segment.
The need to achieve FDA approval for the broad
spectrum of products required has caused coating
manufacturers to focus on the large-volume coatings
required for beer and soft drinks.
As a result, it is estimated that only 25 percent of
the cans will be produced using this control approach.
3.3.4.7 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 2 0 percent of the cans would be produced
using this approach.
3.3.4.8 Three-Piece Food Cans—All Waterborne Except
End Sealant, Which Is Thermally Incinerated
Because waterborne and other low solvent coatings
are not available, 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.
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.
3-15
-------
3.3.4.9 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 $15 per million cans. It is unlikely that a
complete spectrum of waterborne coatings will be available
to meet industry requirements by 1982; as a result, 40 percent
of the stock will be coated with waterborne coatings.
3.3.4.10 Sheet Coating Feeder Plant—Thermal Incinerators
And Primary Heat Recovery
This alternative assumes that all sheet coating
and end compounding lines are retrofitted with incinerators.
At the present time, a significant number of sheet coating lines
in Alabama already are operating incinerators. Because of the
already installed incinerators and the lack of a complete
spectrum of coatings, it is estimated that 60 percent of the
stock will be coated using thermal incinerators for VOC control.
3-16
-------
EXHIBIT 3-9
U.S. Environmental Protection Agency
EMISSIONS FROM COATING TllREE-PIECE
CANS PER MILLION CANS
Case Annualized Incremental Costs Coating And Emissions ___
Annualized
Capital Coating VOC VOC Incremental
Capital CQ3t/Milliona Materials Energy Total Input Emissions Decrease Cost
(j) ($) ($) (5) (?) (gal.) (tons) (tons) % ($ per ton)
BEVERAGE CANS
1978 BASE CASE 0 0 0 0 0 894 1.79 a a a
Interior base coat
Decoration and/or
varnish
Interioring and
exterioring stripe
Interior spray
End sealant
WATERBORNE AS PROPOSED 416 104 0 0 104 720 0.34 1.45 81 72
IN RACT
BASE CASE WITH THERMAL 2670 668 0 166 834 694 0.74 1.05 59 794
INCINERATORS AND HEAT
RECOVERY PRIMARY
SUPPLEMENTAL SCENARIO 3 686 171 0 20 191 715 0.35 1.44 80 133
Waterborne except end
sealant which is incin-
erated
FOOD CANS
1978 BASE CASE 0 0 0 0 0 424 0.99 a a a
Interior base coat
Exterior base coat
Interior stripe
End sealant
WATERBORNE AS PROPOSED 453 113 0 95 687 439 0.24 0.75 76 151
IN RACT
BASE CASE WITH THERMAL 2380 595 0 95 687 424 0.19 0.80 81 859
INCINERATORS AND
PRIMARY HEAT RECOVERY
SUPPLEMENTAL SCENARIO 4 768 192 0 17 209 435 0.23 0.76 77 275
All waterborne except
end sealant which is
incinerated
a. Not Applicable
Source: Booz, Allen & Hamilton Inc. estimates
-------
3.4 COST AND VOC BENEFIT EVALUATIONS FOR THE MOST LIKELY
RACT ALTERNATIVES
Costs for alternative VOC emission controls are presented
in this section based upon the costs per million cans developed
for each alternative in the previous section. The extrapolation
is based upon can production and emission for actual can
manufacturing processes and not upon the representative plants.
3.4.1 Costs for Alternative Control Systems
Although there is no typical can manufacturing facility,
the following two representative plants describe the situation
in most three-piece can manufacturing facilities in Alabama.
Representative Plant A produces 50 percent three-
piece beer and soft drink cans and 50 percent three-
piece food cans using two assembly lines. The
sheet coating lines operate at 2.5 base boxes per
minute for about 1,500 hours per year, to support
the assembly line. Each can assembly line
operates at 400 cans per minute, for 2,000 hours
annually.
Representative Plant B 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.
3-17
-------
The capital cost to adopt the alternative controls to the
representative plants ranges from $30,000 (to convert the
sheet coating plant to waterborne coatings) to more than $300,00 0
(to retrofit the three-piece coating and assembly plant with
incinerators). The incremental operating costs (energy plus
25 percent of capital) range from $8,000 (coating plant converted
to waterborne coating) to a cost of $177,000 (for operating inciner-
ators at the three-piece coating and assembly plant). Capital and
annual operating costs for each of the representative plants
is presented for each applicable alternative on Exhibit 3-10,
on the following page.
3.4.2 Extrapolation of the Costs to the Statewide Industry
Exhibit 3-11, following Exhibit 3-10, shows an extrapolation
of the costs of VOC emission control to the state of Alabama.
The costs are based upon:
The estimates of the cost of compliance for each
of the coating operations that were developed in
section 3.3
An estimate of the share of the market for each type
of can manufactured
The assumption that coated stock sufficient to
produce an additional 2.4 billion cans is shipped
from Alabama to other states.
Based on the above assumptions and assuming that the
industry currently is not controlling emissions, the total
capital required to reduce emissions to meet the RACT guide-
lines from the uncontrolled level would be about $1.1 million.
The annual compliance cost would be about $0.5 million.
Emissions from the Alabama can manufacturing industry
were reduced by an estimated 1,200 tons per year by the end
of 1977, through control approaches acceptable under RACT—
incineration.
The industry currently is spending more on controls than
they are likely to in 1982, assuming the industry substantially
increases its usage of waterborne coatings. However, it is
entirely possible that, in the face of falling demand for three-
piece cans, manufacturers will shut down some capacity and use
existing incinerators on remaining capacity.
3-18
-------
Representative Plant
Waterborne
Thermal Incinerators
Capital Annual Capi tal Annual
Expense Expense
3-piece beer & soft 80 20 330 177
drink and food can
coating and assembly
plant
1 coating line
1 sheet varnish line
2 assembly lines
100 million cans
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
Supplies stock for 290
million cans
a. Not applicable
b. Not considered to be a likely response by 1982
Source; Booz, Allen & Hamilton Inc. estimates
EXHIBIT 3-10
U.S. ENVIRONMENTAL PROTECTION AGENCY
COST OF IMPLEMENTING RACT ALTERNATIVES FOR
REPRESENTATIVE CAN MANUFACTURING PLANTS ($1,000)
Waterborne
Print Only/Waterborne UV Cured/Materborne Incinerate End Sealant
Capital Annual Capital Annual Capital Annual
Expense Expense Expense
a a b b 128 67
82
34
-------
CAN TYPE
Can Production
(millions of units)
Wa ter-
borne or Thermal
Other Low Incineration
Solvent with Primary
Coatings Meat Recovery
Print Only,
All Low Solvent
Coatings
Low Solvent
Coatings
Except
End Sealant
Which Is
Incinerated Total
3-Pieee
Beer and
Soft Drink 12 10 a 28 50
3-Pi ece
Food and
Other Cans 12 10 a 28 50
Sheetcoating
opera t ions
for ship-
ment. ovit
of Alabama 960 1,440 a a 2,400
2,500
EXHIBIT 3-11(1)
U.S. Environmental Protection Agency
COST OF COMPLIANCE TO RACT FOR THE
CAN MANUFACTURING INDUSTRY IN ALABAMA
Capital Investment
(thousands of $)
Water-
borne or
Other Low
Solvent
Thermal
Incinerat ion
with Primary
Coatings Heat Recovery
Print Only,
All low Solvent
Coatings
low Solvent
Coa t i iujs
Except
End Sealant
Which Is
Incinerated Total
27
15
47
24
21
100
1,266
1, 366
1 ,461
-------
Annual Compliance Cost
CAN TYPE (thousands of $)
Low Solvent
Water-
Coatings
borne or
Thermal
Except
Other Low
Incineration
Print Only,
End Sealant
Solvent
with Primary
All Low Solvent
Which Is
Coat inqs
iieat Recovery
Coatings
Incinerated Total
3-P i ece
Boer and
Soft Drink 1 8 a 5 14
3-Piece
Food ancl
Other Cans 17 a 6 14
Sheetcoating
operations
for ship-
ment out
of Alabama 16 710 a a 726
754
a. Not Applicable
Source: Booz, Allen & Hamilton Inc.
EXHIBIT 3-11(2)
U.S. Environmental Protection Agency
Emission Reduction
(tons)
Water-
borne or Thermal
Other Low Incineration
Solvent with Primary
Coatings lleat Recovery
Print Only,
All Low Solvent
Coatings
Low Solvent
Coatings
Except
End Sealant
Which Is
Incinerated
Unit
Cost of
Emission
Total Reduction
($ per ton)
10
40
68
21
30
360
633
660
948
966
61
1 f 581
1,687
459
447
-------
3.5 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.
3.5.1 RACT Timing
RACT must be implemented statewide by January 1, 1982.
This implies that can manufacturers must have either low
solvent- coatings or VOC control equipment installed and
operating within the next four 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, 1982, 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.
3-19
-------
The can manufacturers have shut down a significant number
of three-piece can manufacturing facilities. It appears likely
that the implementation of RACT will 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 $0.5 million
(0.4 percent) of current manufacturing costs. The future
economic impact on the industry is likely to be considerably
less than $0.5 million because of considerable controls already
in place — and in fact, will probably not exceed $20,000 from
the current level.
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 manufacturers have succeeded in having the guidelines
altered to encompass a plant-wide emissions basis. This allows
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 regulation would be to further
concentrate the difficult-to-control emissions, such as end sealing
compounds, into the largest facilities and to reduce further the
number of can assembly plants.
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.
* * * *
Exhibit 3-12, on the following page, presents a summary of
the current economic implications of implementing RACT for can
manufacturing plants in the State of Alabama.
3-20
-------
EXHIBIT 3-12
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING SACT FOR CAN MANUFACTURING
PLANTS IN THE STATE OF ALABAMA
Current Situation
Numbar of potentially affacted facilities
Indication of relative importance of indus-
trial section to state economy
Current industry technology trends
1977 VOC emissions
Industry preferred method of VOC control
to meet PACT 'guidelines
Discussion
TherS are 6 can manufacturing facilities
The Birmingham area is a major source of precoated
can 3tock but contains minimal can manufacturing
facilities. The 1977 value of shipment Mas aoout
523 million.
Seer and beverage containers rapidly
changing to two-piece construction
1,600 tons per year (Booz, Allen estimate);
theoretical uncontrolled level is 2,300 tons
per year
Low solvent coatings (waterborne) with incineration
as an interim approacn for older facilities
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
Problem area
VOC emissions after RACT
Cost effectiveness of RACT
$1.1 million from the uncontrolled state.
However, most facilities have control due to
smoke regulations. Approximately 5100 000
would be the incremental capital requirements
above current levels of control.
$0.5 million from the uncontrolled state.
However, incremental annualized costs are
estimated to be 520,000 (above currant control
levels)
Assuming a direct pas3-through of costs, no
significant change in price
3,600 equivalent barrels of oil annually
to operate incinerators (virtually no increase
from 1977 level, assuming incinerators are
operating 90 percent efficiency)
No major impact
No major impact
Accelerated technology conversion to
two-piece cans
Further concentration of sheet coating
operations into larger facilities
Low solvent coating technology for and
sealing compound
1,100 tons per year (70 percent of current
emission level)
540 annualized cost/annual ton of VOC
reduction from current level of control
Source: 3ooz, Allen 5 Hamilton Inc.
-------
bibliography
Control of Volatile Organic Emissions from Existing Stationary
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 with the following:
George Frank Company, Birmingham, Alabama
Southeastern Steel, Birmingham, Alabama
SIRCO System, Birmingham, Alabama
Guber Metal, Birmingham, Alabama
Alabama Air Pollution Control Commission, Montgomery, Alabama
American Can Company, Greenwich, Connecticut
Continental Can Company, Chicago, Illinois & Birmingham, Alabama
National Can Company, Chicago, Illinois & Birmingham, Alabama
Can Manufacturers Institute, Washington, D.C.
-------
4.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
SURFACE COATING OF METAL
FURNITURE IN THE STATE OF
ALABAMA
-------
4.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
SURFACE COATING OF METAL
FURNITURE IN THE STATE OF
ALABAMA
This chapter presents a detailed economic analysis of
implementing RACT controls for surface coating of metal
furniture in the State of Alabama. The chapter is divided
into six sections:
Specific methodology
Industry statistics
The technical situation in the industry
Cost and VOC reduction benefit 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 and analysis.
4-1
-------
4.1 SPECIFIC METHODOLOGY
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 Alabama.
The quality of the estimates is described in detail
in the last part of this section.
4.1.1 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 Solvent Emissions from Stationary Sources in Alabama;
and supplemented by a review of the 1976 County Business
Patterns and interviews with selected metal furniture
manufacturing corporations. The number of employees was
obtained from the 1976 County Business Patterns and refined
based on information obtained during interviews with
selected metal furniture manufacturers.
The industry value of shipments was estimated by
scaling up 1972 and 197 6 published data to 1977. Because
of the lack of uniform data, different approaches were used
for the household and business/institutional furniture
subcategories of this industry, as discussed below.
4.1.1.1 Value of Shipments for Household Metal
Furniture
Predicasts Inc. (Issue #64, July 27, 1976) presented
the 1976 U.S. value of shipments of household metal
furniture (SIC 2514) as $1,161 million and indicated an
8.7 percent increase in the value of shipments for 1977.
The 1972 Census of Manufactures reported that the value
of shipments in the East South Central region was $152
million, or 21 percent of the U.S. value of shipments.
The value of shipments for household metal furniture in
Alabama was reported as $22.0 million, or 14.5 percent
of the regional value of shipments.
4-2
-------
The 1977 value of shipments of metal household furniture
in Alabama was estimated by scaling up the 197 6 U.S. value
of shipments to 1977 and- applying the above regional and
state percentages.
4.1.1.2 Value of Shipments for Business/Institutional
Metal Furniture
Business/institutional metal furniture includes office
furniture (SIC 2522), metal partitions (SIC 2542) and public
building furniture (SIC 2531). The value of shipments was
estimated using the following technique:
For office furniture, the 1976 Current Industrial
Reports presented the U.S. value of shipments as
$1,002 million and Predicasts Inc., Issue #64, July
27, 1976 indicated an 8 percent increase in the value
of shipments for 1977. The value of shipments for
Alabama was reported as $15.7 million in the 1976
Census of Manufactures, which was 1.85 percent of the
U.S. value of shipments. The 1977 value of shipments
for Alabama was estimated by applying this percentage
to the 19 77 U.S. value of shipments.
For metal partitions, which also include shelving,
lockers, storage racks and accessories and miscel-
laneous fixtures, the 1972 Census of Manufactures
reported the value of shipments for Alabama as
$14 million. The 1977 value of shipments was
estimated by assuming a 6 percent linear rate of
growth between 1972 and 1977.
For public building furniture, which includes metal,
wood and plastic furniture for stadiums, schools
and other public buildings, the 19 72 Census of
Manufactures reported the U.S. value of shipments
ai $546.9 million and the value of shipments for
the East South Central region as $35.7 million.
The value of shipments for Alabama was reported as
$3.2 million. The breakdown among metal, wood and
plastic furniture was not reported. Because of
the lack of data on the breakdown among metal
and other types, half of the total value of ship-
ments was assumed to be for metal furniture. The
1977 value of shipments was estimated by assuming
a 6 percent linear rate of growth between 1972
and 1977.
4-3
-------
4.1.2 VOC Emissions
The VOC emissions were obtained from the Alabama Air
Pollution Control Commission's emissions inventory, except
for one facility where the annual throughput of coatings was
used to estimate the emissions. Current VOC emissions controls
were determined through interviews with plant operations.
4.1.3 Processes for Controlling VOC Emissions
Processes for controlling VOC emissions for metal
furniture plants are described in Control of Volatile
Organic Emissions from Existing Stationary Sources,
EPA-450/2-77-032. The data provide the alternatives
available for controlling VOC emissions from metal fur-
niture manufacturing plants. Several studies of VOC
emission control were also analyzed in detail, and metal
furniture manufacturers were interviewed to ascertain the
most likely types of control techniques to be used in
metal furniture manufacturing plants in Alabama. 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 furni-
ture manufacturers.
4.1.4 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 costs for each
alternative control system
Aggregating installed capital costs for each
alternative control system
Defining two model plants
4-
-------
Developing costs of a control system for the
model plants:
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.
The model plants used as the basis for estimating the
costs of meeting RACT were solvent-based dipping and elec-
trostatic spraying operations. The cost of modifications
to handle waterborne or high solids was not considered to be
a function of the type of metal furniture to be coated,
since no modifications to the production lines should be necessary.
Modifications are required only to the coatings handling
and pumping and spraying equipment, and these would probably not
differ for different types of furniture pieces.
4.1.5 Economic Impacts
The economic impacts were assessed in terms of analyzing the
lead time requirements to implement RACT, assessing the
feasibility of instituting RACT controls in terms of capi-
tal 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 Alabama.
4.1.6 Quality of Estimates
Several sources of information were utilized in asses-
sing the emissions, cost and economic impact of implementing
RACT controls on the surface coating of metal furniture in
Alabama. 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 or previous studies and best engineer-
ing judgment. Exhibit 4-1, on the following page, rates each
study output listed and the overall quality of the data.
4-5
-------
EXHIBIT 4-1
U.S. Environmental Protection Agency
SURFACE COATING Or METAL FURNITURE DATA QUALITY
Study Outputs
Industry
statistics
Emi ssions
Cost of
emissions
control
Economic impact
Overall cuali-y
of data
ABC
Extrapolated Estimated
Hard Data Data Data
X
X
X
X
Source: Booz, .Allen & Hamilton Inc.
-------
4.2 INDUSTRY STATISTICS
Industry characteristics, statistics and business trends
for metal furniture manufacturing plants in Alabama are
presented in this section. Data in this section form the
basis for assessing the impact of implementing RACT for con-
trol of VOC emissions from metal furniture manufacturing
plants in the state.
4.2.1 Industry Characteristics
Metal furniture is manufactured for both indoor and
outdoor use and may be divided into two general catego-
ries: office or business and institutional, and
household. Business and institutional furniture is manu-
factured for use in hospitals, schools, athletic stadiums,
restaurants, laboratories and other types of institutions,
and government and private offices. Household metal furni-
ture is manufactured primarily for home and general office
use.
4.2.2 Size of Industry
The Alabama Air Pollution Control Commission reports
and Booz, Allen interviews have identified four companies with
five plants in Alabama, participating in the manufacture and
coating of metal furniture, as shown in Exhibit 4-2, on the
following page. Statewide, the metal furniture industry in
Alabama accounted for an estimated $38 million in household
metal furniture shipments and $40 million.in business/insti-
tutional metal furniture shipments in 1977. This is equiva-
lent to about 3 percent and 1.7 percent of the U.S. value of
shipments of household and business/institutional metal furni-
ture, respectively. The metal furniture industry in Alabama
employs approximately 2,600 persons. Since the five plants
affected by RACT account,for approximately 1,600 employees
(or 62 percent) of the industry, it is assumed that these
five firms also account for approximately 62 percent of the
value of shipments.
4.2.3 Comparison of the Industry to the State Economy
A comparison of the value of shipments of metal
furniture with the state economy indicates that the metal
furniture industry represents about 0.4 percent of the
total Alabama value of shipments of all manufactured
goods. The industry employs approximately 0.8 percent of
all people employed in manufacturing in Alabama.
-------
Facility Name
Birmingham Ornamental
Iron
Plantation Patterns
Southeastern Metal
Company (SIMCO) Division
of United Chair Corp.
United Chair Corporation
(Subsidiary of U.S. Industries)
Dixie Craft Manufacturing Company
Exhibit 4-2
U.S. Environmental Protection Agency
LIST OF MANUFACTURERS POTENTIALLY AFFECTED
BY RACT GUIDELINES FOR SURFACE COATING OF
METAL FURNITURE IN ALABAMA
Location
Birmingham
Birmingham
Birmingham
Leeds
Goodwater
Source: Alabama Air Pollution Control Commission and Booz, Allen
and Hamilton Inc. interviews.
-------
4.3 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 Alabama.
4.3.1 Emissions and Current Controls
This section presents the estimated VOC emissions from
metal furniture manufacturing facilities in Alabama in 1977
and the current level of emission controls implemented in
the state. Exhibit 4-3, on the followinq paqe, shows the
total emissions from the 5 metal furniture manufacturing
facilities to be about 460 tons per year. These data were
obtained from the Alabama Air Pollution Commission and inter-
views with industry representatives. None of the manufacturers
listed has implemented hydrocarbon emissions control systems.
4.3.2 RACT Guidelines and Control Options
The emission limitations that can be achieved through
the application of Reasonably Available Control Technology
(RACT) for the metal furniture coating industry are presented
in Exhibit 4-4, on the following pages. This emission limit
is based on the use of low organic solvent coatings. It
can also be achieved with waterborne coatings and is approx-
imately equivalent (on the basis of solids applied) to the
use of an add-on control device that collects or destroys
about 80 percent of the solvent from a conventional high
organic solvent coating. In some cases, greater reductions
(up to 90 percent) can be achieved by installing new equip-
ment which uses powder or electrodeposited waterborne coat-
ings. A comparison of the various control options is pre-
sented in Exhibit 4-5, following Exhibit 4-4.
4.3.3 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 metal furniture, requires a line-
by-line evaluation. A number of factors must be considered
based on the individual characteristics of the coating line
to be controlled. The degree of economic dislocation is a
function of these factors.
4-7
-------
Exhibit 4-3
Uc. S. Environmental Protection Agency
SUMMARY OF HYDROCARBON .EMISSIONS FROM METAL FURNITURE
MANUFACTURING FACILITIES IN ALABAMA
Facility Name
Birmingham Ornamental
Iron
Number of
Coating Lines
Current Average Hydro-
carbon Emissions
(tons/year)
43
Plantation Patterns
Southeastern Metals
Company (SIMCO)
United Chair Corporation
Dixie Craft Manufacturing
Company
2
1
1
1
175
74
28
140
Total, Statewide
460
Source: Alabama Air Pollution Control Commission and Booz, Allen
and Hamilton Inc. interviews.
-------
EXHIBIT 4-4
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: Environmental Protection Agency.
-------
Control Options
Waterborne
(electrodeposition,
EDP)
Affected Facility
and .Application
Primecoat or
single coat
Waterborne (spray dip All applications
or flow coat)
EXHIBIT 4-5(1)
U.S. Environmental Protection Agency
RACT CONTROL OPTIONS FOR THE METAL FURNITURE INDUSTRY
Typical Percent
Reduction Comparison of Control Options
a
90-95 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
60-90a This will likely be the first
option considered because of
the possibility that these
coatings can be applied
essentially with existing
equipment
-------
Affected Facility
Control Options and Application
Waterborne (spray dip
or flow coat)
(continued)
EXHIBIT 4-5(2)
U.S. Environmental Protection Agency
RACT CONTROL OPTIONS FOR THE METAL FURNITURE INDUSTRY
Typical Percent
Reduction Comparison of Control Options
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
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
-------
Affected Facility
Control Options and Application
Waterborne (spray dip
or flow coat)
(continued)
Powder (spray or dip)
Top or single coat
EXHIBIT 4-5(3)
U.S. Environmental Protection Agency
RACT CONTROL OPTIONS FOR THE METAL FURNITURE INDUSTRY
Typical Percent
Reduction
95-99*
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, result-
ing in up to 98% coating
ef ficiency
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
Comparison of Control Options
Changes in the number of nozzles
may be required
Sludge handling may be more
difficult
No solid or liquid wastes to
dispose of
-------
Control Options
Affected Facility
and Application
Powder (spray or
dip) (continued)
High solids (spray) Top or single coat
Carbon adsorption
Prime, single or
top coat
(application
and flash-off
areas)
EXHIBIT 4-5(4)
U.S. Environmental Protection Agency
RACT CONTROL OPTIONS FOR THE METAL FURNITURE INDUSTRY
Typical Percent
Reduction Comparison of Control Options
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%
50-80a 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 asso-
ciated with isocyanates used
in some high-solid two-
component systems
90 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
-------
Affected Facility
Control Options and Application
Carbon adsorption
(continued)
Incineration
Prime, single or
topcoat (ovens)
EXHIBIT 4-5(5)
U.S. Environmental Protection Agency
RACT CONTROL OPTIONS FOR THE METAL FURNITURE INDUSTRY
Typical Percent
Reduction Comparison of Control Options
There is little possibility
of reusing recovered solvents
because of the variety of
solvent mixtures
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
b
90 These are less costly arid 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 4-5(6)
U.S. Environmental Protection Agency
RACT CONTROL OPTIONS FOR THE METAL FURNITURE INDUSTRY
Control Options
Incineration
(continued)
Affected Facility
and Application
Typical Percent
Reduction
Comparison of Control Optlon9
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 III: Surface
Coating-of Metal Furniture; ¦ EPA-45Q/2-^77-Q32, December 1977.
-------
The first factor to be considered is whether the existing
equipment can be used by the substitution of a coating mater-
ial 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 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 in Alabama
indicated that plans for VOC controls have not yet been
formulated. Based on the experience in several states in
Region V, it is assumed that most manufacturers will use
their existing spraying equipment and modify it to handle
high solids or waterborne coatings. It was assumed that
existing dipping or flow coating equipment will be modified
to handle waterborne coating.
4-8
-------
4.4 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 two types of model plants are
presented, which are then extrapolated to the statewide
industry.
4.4.1 Model Plant Costs and VOC Reduction Benefits
Two types of model plants, distinguished by production
output, were selected for the surface coating of metal furniture.
The first type included an electrostatic spraying line with
outputs of 3 million square feet and 4 8 million square feet
of surface area coated per year. The second type included
a dip coating line with outputs of 7 million square feet
and 22.5 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 plant were
estimated. The cost of.pretreatment facilities, ovens and
plant building was excluded from total capital costs. The
annualized cost includes coating materials, utilities,
operation and maintenance labor^-, maintenance material*- and
capital charges (depreciation, interest, taxes, insurance
and administrative 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 4-6
for the electrostatic spraying and in Exhibit 4-7 for dip
coating lines, on the following pages.
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, if the base plant assumption of 25
percent solids coating was 30 percent solids coating, no
savings for conversion to higher solids (7 0 percent) would
result. Similarly, capital costs for conversion to water-
borne coating would increase dramatically, if significant
changes to the facility were needed, compared to the assump-
tion of cleaning and corrosion protection only of existing
dip tanks.
1. Maintenance material and labor charges were assumed to
be approximately equal to 4 percent of the capital cost
2. Capital charges were assumed to be equal to 18.68 percent.
4-9
-------
EXHIBIT 4-6
U.S. IJnv i ronmental Protect, i on Agency
liST I MATliU COS'I OK CONTKOL lOI< .MOIJLX
b'XISTJNC KLL'CTKOSTATIC Sl'KAY COATINC I..1NIJS
Base
Plant
Installed capital cost ($000)
Direct operating costs (savings)
($000)
Capital charges (§000/yr)
Net annualized cost (credit)
(S(J00/yr)
SolvenL emissions controlled
(tons/yr)
Percent emissions reduction
Annualized cost (credit) per Lon
of V0C controlled ($/ton)
25 5 IS 15 60
175 (0) 5 17
40 3 i U
223 (J) 0 20
N/A 21 20 24
N/A 06 0O '->7
N/A (14 1) 400 1,16 7
Note: l'<77 dollar:, and short: tons
Model Plant A-l
(3 Mi llion S
-------
EXHIBIT 4-7
U.S. Environmental Protection Agency
ESTIMATED COST OF CONTROL OPTIONS FOR
MODEL EXISTING DIP COATING LINES
Model l'I jiiI U-1 Much;] Plant li-2
(7 Hi 1 lion S«ju^»»«: r<;<;L/Vr) Square rm;t/Yr)
liiiiii! Uasi:
Plant incremental Costs Plant Incremental Costs
Cost for Conversimi to Cost. for Conversion t:o
Waterborne 2Vi Waterborne
Sol ids Solids
Installed capital cost ($000) ln'i 1 215 5
Direct operating costs 11!i 10 450 17
($000)
Capital charyes ($000/yr) 20
Net annualized cost ($000/yr) 155
Solvent emissions controlled N/A
(tons/yr)
Percent emissions reduction N/A
Annualized cost per ton of N/A
VOC controlled ($/ton)
I 40 1
11 4'J0 IB
27 N/A 122
80 N/A 80
4(17 N/A I'M
Note: l'J77 dollars and sliort tons
Control ul' Volali.li! Oryanic Emissions froin luxistiiuj Slal iunary Source:;,
Volume II J: Surface Coal Ln/2-77-0 \2,
l*.:ceml>e r l'J77
-------
4.4.2
Extrapolation of Control Costs to the Statewide
Industry
In Exhibit 4-8, on the following page, the costs for
meeting RACT guidelines for VOC emission control for surface
coating of metal furniture are extrapolated to the statewide
industry in Alabama.• The estimates are based on the following
assumptions and methods:
The 5 plants listed in Exhibit 4-3 were assumed
to require controls to comply with the RACT
guidelines.
The distribution of control options was based on
industry interviews, as well as Booz, Allen
estimates. Existing spray coating lines were
assumed to convert to high solids or waterborne
coatings and existing dip coating lines to water-
borne dip.
The capital cost of control for high solids and water-
borne spray and for waterborne dipcoating was estimated
by scaling up the model plants A-l and B-l costs by a
capacity factor calculated as follows. The capacity
factor was assumed to be one for the coating lines with
the model plants. For the coating lines with
greater emissions per line than those of the model
plant, the capacity factor per line vas determined
to be equal to:
(actual emissions/model plant emissions)^•6
The annual operating cost for high solids and waterborne
spray and waterborne dipcoating was assumed to be pro-
portional to the amount of emissions reduction
and was scaled ap from the model plant costs.
The data in Exhibit 4-8 show that the control of VOC
for surface coating of metal furniture to meet the RACT
guidelines in Alabama would require a statewide capital
investment of about $150,000 and a statewide net annualized
cost of about $26,000.
4-10
-------
Exhibit 4-8
U.S. Environmental Protection Agency
STATEWIDE COSTS FOR PROCESS MODIFICATIONS OF
EXISTING METAL FURNITURE COATING LINES
TO MEET RACT GUIDELINES FOR VOC EMISSION CONTROL
High Water-
Solids borne Waterborne
Spray . Spray Dip
Number of plants3
Number of process lines
Uncontrolled emissions (ton/yr)
Potential emission reduction (ton/yr)'
Installed capital cost ($000)c
Direct annual operating cost (credit)
($000) (1-3 shifts/day)c
Annual capital charges (credit)
($000)
Net annualized cost (credit) ($000)^
Annualized cost (credit) per ton of
emissions reduced ($)
4
4
232
200
97
(56)
18
1
1
140
110
42
29
8
(38) 37
(190) 324
1
1
87
70
8
26
27
390
Total
5
6
459
380
147
(1)
27
26
68
a. Total number of plants is less than the sum of individual columns because some
plants have both spraying and dipping lines.
b. Based on control efficiency of 86 percent for high solids, and 80 percent for
waterborne coating.
c. Based on cost for model plant A-l and B-l from Exhibits 4-6 and 4-7.
d. 18.7 percent of capital cost.
Source: Booz, Allen S Hamilton Inc.
-------
4.5 DIRECT ECONOMIC 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; 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.
4.5.1 RACT Timing
RACT guidelines must be implemented statewide by December
31, 1982. This implies that surface coaters of metal furni-
ture must have made their process modifications and be
operating within the next four years. The timing require-
ments of the RACT guidelines 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 material
for emission control.
Install new equipment or modify existing facilities
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 guidelines
within the requirement timeframe.
4.5.2. Feasibility Issues
Technical and economic feasibility issues of imple-
menting the RACT guidelines are discussed in this section.
None of the metal furniture manufacturers in Alabama
interviewed during this study has implemented high solids
or water-based coatings to date. However, based on
4-11
-------
experience in other states, it is predicted that these manu-
facturers will convert to low solvent spray or waterborne
dip 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 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.
Unless major modifications to equipment are required,
the cost of conversion to high solids or waterborne coatings
is not likely to have a significant effect on the imple-
mentation of the RACT guidelines for surface coating of metal
furniture.
4.5.3 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
guidelines is not expected to have a significant effect on
the economic situation in the metal furniture industry in
Alabama.
The major economic impact, in terms of cost outlay,
will be capital-related, rather than from increased annual
operating costs. The predicted capital costs are not signi-
ficant; however, they are based on the assumption that no
extensive modifications will be required. If extensive
modifications to existing plants are required, these costs may
become significant.
4-12
-------
4.6 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. Employ-
ment would be reduced if marginally profitable facilities
closed, but the present indication from the industry is that
no such closures are anticipated.
Productivity for those coaters who would be coating only
with high solids could be increased, because they will be
able to get more paint on per unit volume basis and reduce
paint application time.
Plants that convert to low solvent coatings will save
a small quantity of energy (less than 1,000 barrels per year)
due to the reduced drying time required. Those converting
to water-based coating will experience a small increase in energy
usage due to increased drying time.
* * * *
Exhibit 4-9, on the following page, presents a summary
of the current economic implications of implementing the
RACT guidelines for surface coating of metal furniture in the
State of Alabama.
4-13
-------
EXHIBIT 4-9
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR SURFACE COATING OF METAL
FURNITURE IN ALABAMA
Current Situation Discussion
Number of potentially affected facilities There are 5 metal furniture manufac-
turing facilities
1977 value of shipments was S78 million
industrywide and approximately 548
million for five affected facilities
Trend is towards the use of a variety
of colors
460 tons per year
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 control to meet
RACT guidelines
Affected ftreas in Meeting RACT
Capital investment (statewide)
Annualized cose (statewide)
Price
Energy
Productivity.
Employment
Market structure
RACT timing requirements (1982)
Problem area
VOC emissions after RACT
Cost effectiveness of RACT
Low solvent coatings
Low solvent coatings
Discussion
$148,000
526,000, which represents less than
0.1 percent of the value of ship-
ments from the five affected firms
No major change
No major impact
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
af colors providing acceptable
quality needs to be developed
SO tons per year (approximately
IS percent of current emissions
level)
568 annualized cost/annual, ton of
VOC reduction
Source: 3ooz, 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 Business 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.
-------
TECHNICAL REPORT DATA
(I'lcasc read hislnictioiis on the reverse before completing!
1. REPORT NO. 2.
EPA-904/9-79-038
3. RECIPIENT'S ACCESSION NO.
4. TITLE AND SUBTITLE
Economic Impact of Implementing RACT Guide-
lines in Alabama
5. REPORT OATE
6. per^ormTn'g^organization code
7. AUTHOR(S)
8. PERFORMING ORGANIZATION REPORT NO.
9. PERFORMING ORGANIZATION NAME AND ADDRESS
Booz, Allen & Hamilton, Inc.
Foster D. Snell Division CFlorham Park, NJl
& Public Management Technology Center
(Bethesda, MD)
10. PROGRAM ELEMENT NO.
11. CONTRACT/GRANT NO.
68-Q2-2544. Task 6
12. SPONSORING AGENCY NAME AND AODRESS
U.S. Environmental Protection Agency
Region IV
Air & Hazardous Materials Division
Atlanta, GA
13. TYPE OF REPORT AND'PERIOD COVERED
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 for selected
industrial categories in Alabama. The study is to be used primarily
to assist EPA and state decisions on achieving the emission limitations
of the RACT standards.
The economic impact was assessed for the following 2 RACT indus-
trial categories: surface coating of cans and metal furniture.
The scope of this project was to determine the costs and direct
impact of control to achieve RACT guideline limitations. Direct economic
costs and benefits from the implementation of RACT limitations were
identified and quantified 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. COSATI Field/Group
Surface coatings
Air pollution
Can coatings
Solvent substitution
Emission limits
Metal furniture coatings
Air pollution control
Stationary sources
Alabama
Economic impact
Hydrocarbon emission*
Coatings
13. DISTRIBUTION STATEMENT
Unlimited
19. SECURITY CLASS (This Report)
Unclassified
21 . NO. OF PAGES
20. SECURITY CLASS (This page]
Unclassified
22. PRICE
EPA Form 2220-1 (9-73)
------- |