United States Region IV EPA 90 4/9-79-036
Environmental Protection Air Programs Branch April 1979
Agency Atlanta, Georgia 30308
Air
SEPA
Economic Impact
of Implementing
RACT Guidelines in
the State of Tennessee
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EPA 904/9-79-036
ECONOMIC IMPACT OF IMPLEMENTING RACT
GUIDELINES IN THE STATE OF TENNESSEE
Library Repms IV
£2 ?rc tedioa Agency
$45 Ccuatiiaad Eh'tel
Georgia 30385
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. ENVIP.ONMENT AL PROTECTION AGENCY
REGION IV
AIR & HAZARDOUS MATERIALS DIVISION
ATLANTA, GEORGIA 30 30 8
EPA Projeer Officer: Winston Smith
From:
300Z, ALLEN & HAMILTON Inc.
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This air pollution report is issued by Region IV
of the U.S. Environmental Protection Agency (EPA), to
assist state and local air pollution control agencies
in carrying out their program activities. Copies of
this report may be obtained, for a nominal cost, from
the National Technical Information Service, 5285 Port
Royal Road, Springfield, Virginia 22151.
This report was funished 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
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TABLE OF CONTENTS
CHAPTER TITLE
I. 0 EXECUTIVE SUMMARY
2.0 INTRODUCTION AND APPROACH
3.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR SURFACE COATING OF CANS IN THE
STATE OF TENNESSEE
4.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING OF COILS IN
THE STATE OF TENNESSEE
5.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING OF PAPER
IN THE STATE OF TENNESSEE
6.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING OF FABRICS
IN THE STATE OF TENNESSEE
7.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING OF AUTOMOBILES
(NOT PART OF THIS STUDY)
8.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING OF METAL
FURNITURE IN THE STATE OF TENNESSEE
9.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING OF INSULATION
OF MAGNET WIRE (NOT PART OF THIS STUDY)
10.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING OF LARGE
APPLIANCES-IN THE STATE OF TENNESSEE
II.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR SOLVENT METAL DEGREASING IN THE
STATE OF TENNESSEE.
12.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR REFINERY VACUUM PRODUCING SYSTEMS,
WASTEWATER SEPARATORS AND PROCESS UNIT
TURNAROUNDS IN THE STATE OF TENNESSEE
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TABLE OF CONTENTS
CHAPTER TITLE
13.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR TANK TRUCK GASOLINE LOADING
TERMINALS IN THE STATE OF TENNESSEE
14.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR BULK .GASOLINE PLANTS IN THE
STATE OF TENNESSEE
15.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR STORAGE OF PETROLEUM LIQUIDS IN
FIXED-ROOF TANKS IN THE STATE OF
TENNESSEE
16.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR STAGE I FOR GASOLINE SERVICE
STATIONS IN THE STATE OF TENNESSEE
17.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR USE OF CUTBACK ASPHALT IN THE
STATE OF TENNESSEE
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1. EXECUTIVE SUMMARY
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1. EXECUTIVE SUMMARY
This chapter summarizes the major elements and most
significant findings of this study to determine the econ-
omic impact of implementing Reasonably Available Control
Technology (RACT) guidelines for volatile organic compounds
for thirteen industrial categories in the state of Tennessee.
Further discussion and data are presented in detail in the
subsequent chapters of the report. This Executive Summary is
divided into three sections:
Objectives, Scope and Approach
Statewide Aggregate Economic Impact for the
13 RACT Guidelines
Economic Implications of Each RACT Guideline.
1-1
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OBJECTIVES, SCOPE AND APPROACH
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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 and state decisions
on achieving emission limitations.
1.1.2 Scope
The scope of this project for Tennessee was to determine
the costs and direct impacts of control to achieve RACT guide-
line limitations in thirteen 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 (energy, employment, etc.) impacts were addressed,
they were not a major emphasis in the study. In summary, direct
economic impact analysis of each industrial category was aggregated
on a statewide basis for the RACT categories studied.
1-2
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In Tennessee, the economic impact was analyzed for the
implementation of RACT guidelines for the following 13 industry
categories:
Suface coating of coils
Surface coating of metal cans
Surface coating of paper
Surface coating of fabrics
Surface coating of metal furniture
Surface coating of large appliances
Solvent metal cleaning
Bulk gasoline terminals
Bulk gasoline plants
Storage of petroleum liquids in fixed roof tanks
Service stations—Stage I
Use of cutback asphalt
Miscellaneous refinery sources.
The major study guidelines in the determination of the
economic impact of the RACT guidelines are discussed below.
The emission limitations for each industrial
category were studied at the control level
established by the RACT guidelines. These are
presented in Exhibit 1-1, on the following page.
All costs and emission data were presented for
1977.
Emissions sources included were existing stationary
point sources in most^ of the applicable industrial
categories with potential VOC emissions greater than
25 tons per year in 3 urban counties that were
classified as non-attainment for ozone. In the rest
of the state, only sources with greater than 100
tons/year of potential VOC emissions were included in
the study.
1. For some industrial categories such as, Service Stations and Solvent
Metal Cleaning) size characteristics were used as the basis for
inclusion, rather than emissions.
2. The urban non-attainment counties included: Davidson, Hamilton, and
Shelby.
1-3
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EXHIBIT 1-1(1)
U.S. Environmental Protection Agency
LISTING OF EMISSION LIMITATIONS THAT REPRESENT
THE PRESUMPTIVE NORM TO BE ACHIEVED THROUGH
APPLICATION OF RACT FOR THIRTEEN INDUSTRY CATEGORIES
Category
RACT Guideline Emission Limitations5
Surface Coating Categories Based on
Low Organic Solvent Coatings (lbs.
solvent per gallon of coating, minus
water)
Surface Coating Of:
Cans
. Sheet basecoat (exterior and interior)
Overvarnish
Two-piece can exterior (basecoat and overvarnish)
. Two and three-piece can interior body spray
Two-piece can exterior end (spray or rollcoat)
. Three-piece can side-seam spray
. End sealing compound
Coils
. Prime and topcoat or single coat
Paper
Fabrics and vinyl coating
. Fabric
. Vinyl
Metal Furniture
. Prime and topcoat or 3ingle coat
Large appliance
. Prime, single or topcoat
Solvent Metal Cleaning
Cold cleaning
Conveyorized degreaser
Open top degreaser
Petroleum Refinery Sources
. Vacuum producing systems
2.3
4.2
5.5
3.7
2.6
2.9
2.9
3.8
3.0
2.8
Provide cleaners with: cover; facility
to drain clean parts; additional free-
board; chiller or carbon absorber.
Follow suggested procedures to minimize
carryout.
Provide cleaners over 2 square meters air/
vapor interface with: refrigerated chillers;
or carbon absorption system; drying tunnel
or rotating basket; safety switches;
covers. Follow suggested procedures to
minimize carryout.
Provide cleaners over 1 square meter open
areas with: safety switches; powered
cover; chiller; carhon absorber. Follow
suggested procedures to minimize carryout.
No emissions of any noncondensible VOC
from condensers, hot wells or accumulators
to a firebox, incinerator or boiler.
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EXHIBIT 1-1(2)
U.S. Environmental Protection Agency
Category
. Wastewater separators
. Process unit turnaround
Bulk Gasoline Terminals
Bulk Gasoline Plants
Storage of Petroleum Liquids in Fixed
Roof Tanks
Service Stations (Stage I)
Use of Cutback Asphalt
RACT Guidelines Emission Limitations3
Minimize emissions of VOC by providing
covers and seals on all separators and
forebays and following suggested operating
procedures to minimize emissions
Minimize emissions of VOC by depressurization
venting to vapor recovery, flare or firebox.
No emissions of VOC from a process unit
or vessel until it's internal pressure
is 136 kilo Pascals (17.7 psia) or less
Equipment such as vapor control system
to prevent mass emissions of VOC from
control equipment to exceed 80 milligrams
per liter (4.7 grains per gallon) of gaso-
line loaded
Provide submerged filling and vapor bal-
ancing so that VOC emissions from control
equipment do not exceed 80 milligrams
per liter (4.7 grains per gallon) of
gasoline loaded
Provide single seal and internal floating
roof to fixed roof storage vessels with
capacities greater than 42,000 gallons
containing volatile petroleum liquids
for which true vapor pressure is greater
than 10.5 kilo Pascals (1.52 psia)
Provide submerged fill and vapor balance
for any stationary storage tank located
at a gasoline dispensing facility
The manufacture, mixing, storage, use
or application may be approved where:
long-life stockpile storage is necessary;
the use or application is an ambient tem-
perature less than 10°C (50°F) is necessary;
or it is to be used solely as a penetrating
prime coat
al Annotated description ofRACT guidelines
Source: Regulatory Guidance for Control of Volatile Organic Compound Emissions from 15
Categories of Stationary Sources, U.S. Environmental Protection Agency, EPA-90512-
78-001, April 1978.
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Service stations were studied for the 3
urban non-attainment counties only. In
these counties only service stations with
annual throughput over 260,000 gallons
and storage tank capacity over 2000 gal-
lons were studied.
Petroleum liquid storage tanks over 42,000
gallons capacity containing volatile pet-
roleum liquids' with vapor pressure greater
than 1.52 psia were studied statewide.
(With the exception of storage tanks
used to store produced crude oil prior
to lease custody transfer where a 420,000
gallon capacity applied).
All gasoline terminals were studied statewide.
Solvent metal cleaning operations were studied
for the three counties designated as urban
non-attainment areas for facilities with
greater than 25 tons potential emissions
and statewide for facilities with greater
than 100 tons potential emissions.
The use of cutback asphalt was studied
statewide.
The following volatile organic compounds were
exempted:
Methane
Ethane
Trichlorotrifluorethane
1,1,1-trichloroethane (methyl chloroform).
The final compliance timing requirement for
implementation of controls to meet RACT emission
limitations was as follows:
November 1, 1981 for add-on control system
November 1, 1981 for equipment modification
September 1, 1981 for low solvent coatings.
The exemption status of methyl chloroform under these guidelines may
be subject to change.
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1.1.3 Approach
The approach applied to the overall study was: a study
team with technology and economic backgrounds utilized avail-
able secondary sources to estimate the emissions, statistics
and costs for each RACT industrial category; then, the study
team completed, calibrated and refined these estimates based
on interviews with industry representatives in the state.
Because of the number of point sources and the data
available in the state emission inventory, the methodology was
specific for each RACT industrial category studied. However,
the general methodology applied for two major classes of indus-
trial categories was:
Surface coating RACT industrial categories (cans,
coils, fabrics, paper, metal furniture and large
appliances)—The potentially affected facilities
and emissions were obtained primarily from the
Tennessee Department of Public Health and interviews.
Therefore, the following general methodology was
applied:
A list of potentially affected facilities
was compiled from secondary reference sources.
Data from the Tennessee emission inventory
were categorized and compiled for each RACT
industrial category by the Tennessee Department
of Public Health.
Firms not listed in the emission inventory
were identified. These facilities were
then contacted by the Tennessee Department
of Public Health to determine their
inclusion.
Emissions, emission characteristics, control
options and control costs were studied for
these firms known to be in a specific category.
Interviews were conducted by Booz, Allen to
determine emissions (when not available),
applicable control options and potential
control costs.
The study team then evaluated the control cost
to meet the RACT requirements and the potential
emission reduction.
1-5
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Nonsurface coating RACT industrial categories (bulk
gasoline plants, bulk gasoline terminals and refin-
eries, service stations, fixed roof tanks and solvent
metal cleaning)—Each category either represented an
exhaustive list of potentially affected facilities
or emissions data were not available (or categorized)
for these types of sources. Therefore, the following
generalized methodology was applied:
Industry statistical data were collected
from secondary reference sources.
The Tennessee Department of Public Health
identified facilities which would be affected
by the proposed regulation for bulk gasoline
plants, terminals and fixed roof tanks.
Emissions were estimated by applying relevant
factors (e.g., emissions per facility or
throughput) which have been determined by
the EPA.
Control options and estimated costs to
meet the RACT guidelines were reviewed.
- Interviews were conducted to determine
applicable associated control options
and the cost of control.
1.1.4 Quality of Estimates
The quality of the estimates that are presented in this
report can be judged by evaluating the basis for estimates
of the individual study components. In each of the chapters
that deal with the development of estimated compliance cost,
the sources of information are fully documented. In addition,
the study team has categorically ranked by qualitative judgment
the overall data quality of the major sources and, therefore,
of the outcomes. These data quality estimates were ranked into
three categories:
High quality ("hard data")—study inputs with
variation of not more than + 25 percent
Medium quality ("extrapolated data")—study
inputs with variation of +25 to 75 percent
Low quality ("rough data")—study inputs with
variation of + 50 to 150 percent.
Each of these data quality estimates is presented in
the individual chapters. The overall quality ranking of the
study inputs for each RACT industrial category was generally
in the medium quality range.
1-6
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1.2 STATEWIDE AGGREGATE ECONOMIC IMPACT
FOR THE THIRTEEN RACT GUIDELINES
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1.2 STATEWIDE AGGREGATE ECONOMIC IMPACT
FOR THE THIRTEEN RACT GUIDELINES
The implementation of RACT emission limitations for thirteen
industrial categories in Tennessee involves an estimated $36
million capital cost and $8.4 million annualized cost per
year. The net VOC emission reduction is estimated to be
29,000 tons annually from a 1977 baseline of 41,000 tons.
Exhibit 1-2, on the following page, presents a quantitative
summary of the emissions, estimated cost of control, cost
indicators and cost effectiveness of implementing RACT guide-
lines for thirteen industrial categories.
Approximately 1,000 facilities are potentially
affected by the thirteen RACT guidelines in Tennessee.
Eighty percent of the potentially
affected facilities are represented
by the service station (800 facil-
ities) industrial category.
Ten percent of the potentially
affected facilities are represented
by solvent metal cleaning.
Less than 5 percent (46 facilities) of the
potentially affected facilities are repre-
sented by the six surface coating industrial
categories (cans, paper, fabrics, coils,
metal furniture and large appliances).
In 1977, the estimated annual VOC emissions (in-
cluding those already controlled) for the thirteen
RACT industrial categories totalled approximately
41,000 tons.
Four gas marketing categories (tank truck
loading terminals, bulk gas plants, fixed
roof tanks and service stations) repre-
sented 31 percent of the total VOC
emissions.
Solvent metal cleaning represented 16 percent
of the total VOC emissions (from the thirteen
RACT categories studied)
- Refinery systems represented 2 percent of the
total VOC emissions
Use of cutback asphalt represented 8 percent
of the total VOC emissions.
Six surface coating categories represented
43 percent of the total VOC emissions.
1-7
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QC8IBXT 1-2
0,3. Emrtroneental Protection Aqmcf
sotMUtT or IMPACT Of ZMPLQIBfTItlG RACT
GUTDtLZHSS IB U IHWSTMAI* CATEGORIES — TBWESSE*
Eaiaalon*
Coit of WCT Control
Cose Indicators
rMiiielas
Feteaslallf
rnduaery Caeaqory Affactad
Sut.'ki coating
Of CSftfl
tacuuead voc
tai*al0M
Aftar Mt W
19T7 voc Sjyl—nciwi fAiiiow
aiaiiwi axcT
Surfaca coaciog
of ca14a*
Surfaca co«cinq
of j
SurfAM Ooatiaq
of fabrics
Surfaca coatlaq
muI faraitura
Sorfac* coatiaq of
U*9« ifpliaMM
Solmt Mtsl
ciaaaln?
tefilMVT V&8M
wfltMcar
ic^raeort
ud tumrowdfl
Tan* truck
olLna loading
ttOUAit
auik i4AC4
Suraq« of patw
laua llquiOa u>
flxM roo<
£«rvtca Staciooa
13t49a I)
Cucbadii Aapiule
31
Itona/yr.l itoaa/yr.) Itoaa/yx.)
WO 190 U0
1*000
12.000
140
990 ,
3, J20
9,700
1,000
2.900
41,010
300
2,280
24
190
1.000
9*190
210
•70
9*730
U4
900
2*130
L.J00
U0
7*030
1.390
2*170
Capital
Coat*
Aitaoallzad
Cost aa Aftaualisad
Parcaae of Goat P«r
MumUMd Value of Unit
Coat (cradlt) Ship—ata** Ship—at
Cast
Effacclvonaaa
Annualized
Cne (credit)
Nr Tom of MC
Ndnctian
(9 Billiona) (9 aiUlona) Iparcaat) (coat par unit) IS par tma/yr.)
0.139
0.3
14.1
1-1
0.3
9.6
0.9
0.01
9.49
0.044
0*004
4.3
0.3
(0.09)
1.0
0.07
0.003
1.993
13*119 3t*«M
30.009
0.47
0.4
uo
1.9
negligible
0.15
<0.13
w^iUiblt
ft*9llqlAla 400
109
ineraaM of 1.0 370*49]
laeraaa* of l.S 2*200-2,900
paroaat
varlaa with araa (04)
90.40/tooaahold
appliaaca
aaiUgWi
negligible
0.19 50.0000/gal.
0.9 SO.0021
SO.0004/9*1.
0.1 90.001/9*1.
95
199
%>e^i riquraa preaeaceu ib r.tota «xftibic 4re rowdad and «wro*ia*c«d for coap«riMa purpaeea.
a. Locli^aa om U*a caeca
fc>. Value of «niv>«anea repraaeaea tiie total value in eh* specific tndttatry caeeqory for eft* itata being studied.
c. All coil eoatuhj aod a*qiMC wire coating faclliciaa have i apliaanrai coaeroL* prior ea che RACT guideline* *od ara aaauaed wttfiiA caapllaoce.
<•:. EatiMta ua* of cutback aapoaic va 1977 uaa l3«i)QQ eona.
auurcei too*. Allan & ilaaileon inc.
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The net emission reduction achievable by implementing
the thirteen RACT guidelines is estimated to be
28,894 tons annually. The approximate percent of the
total VOC emissions reduced by implementing RACT
by industrial category group is:
Surface coating categories - 53 percent of
VOC emission reduction
Gas marketing categories - 40 percent of VOC
emission reduction
Use of cutback asphalt - 5 percent of VOC
emission reduction.
Solvent metal cleaning category - 4 percent
of VOC emission reduction
Refinery vacuum systems - 2 percent of VOC
emission reduction.
The capital cost for the thirteen industrial categories
to achieve the RACT guidelines is estimated to be
$36.1 million.
The six industrial categories dealing with surface
coatings (cans, coils, paper, fabrics, metal
furniture and large appliances) represent approx-
imately 63 percent of the total capital cost
($22.6 million) required for control.
The four RACT categories dealing with petroleum
marketing (bulk gasoline plants, bulk gasoline
terminals, fixed roof tanks and service stations)
account for approximately $12.5 million (or 35
percent of the total) of the estimated capital
cost.
The annualized cost of the thirteen RACT industrial
categories to achieve the RACT guidelines is esti-
mated to be $8.4 million. In terms of cost indicators,
the annualized compliance cost per value of shipments
will have the largest effect on the following indus-
trial categories:
Fabric coating — the annualized costs represent
approximately 1.5 percent of the affected value
of shipments.
1-8
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Paper coating—The annualized costs
represent approximately 1.0 percent
of the 1977 affected value of shipments.
Bulk gasoline plants—The annualized
compliance costs represent approximately
0.5 percent of the affected value of
shipments.
Technology developments and delivery of equipment
could present problems in achieving the 1982
timing requirements of the RACT guidelines.
Low solvent coating technology requires
further development for cost- and energy-
effective implementation of the RACT guide-
lines in the following industrial categories:
Surface coating of large appliances
(high solids coatings have not been
commercially proven)
Surface coating of cans (end sealing
compound)
Surface coating of metal furniture
(full color line is currently not
available).
Surface coating of fabrics and paper
(few water based coatings are available
for substitution)
- Equipment delivery and installation of control
equipment were identified as potential
problems in the following industrial categories:
Surface coating of paper
Solvent metal degreasing
Tank truck gasoline loading terminals
Surface coating of fabrics
Gasoline service stations.
The implementation of the RACT guidelines is ex-
pected to create further concentration for industrial
sectors requiring major capital and annualized
cost increases for compliance. RACT requirements
may have an impact on the market structure of the
following RACT industrial categories:
- Service stations
Surface coating of paper
Surface coating of fabrics.
1-9
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The implementation of the RACT guidelines for the
thirteen industrial categories is estimated to repre-
sent a net energy savings of 17,670 equivalent
barrels of oil annually; or 0.0 3 percent of the state-
wide energy demand for all manufacturing. Assuming a
value of oil at $13 per barrel, this is an equivalent
energy savings of $0.2 3 million annually. Exhibit 1-3,
on the following page, presents the estimated change
in energy demand from implementation of the RACT
guidelines in Tennessee.
RACT compliance requirement for the six
surface coating industrial categories (cans,
coil, paper, fabrics, metal furniture,
and large appliances) represent a net
energy demand of approximately 61,000
equivalent barrels of oil annually.
RACT compliance requirements for the four
industrial categories dealing with petroleum
marketing (service stations, bulk gasoline
terminals, fixed roof tanks and bulk gaso-
line plants) represent a net energy savings
of approximately 78,900 barrels of oil
annually. However, the control efficiency
has not been fully demonstrated and these
estimates are likely to overstate the
achievable energy savings for bulk gasoline
terminals and service stations.
1-10
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Industry Category
Surface coating of cans
Surface coating of coils
Surface coating of paper
Surface coating of fabrics
Surface coating of metal furniture
Surface coating of large appliances
Solvent metal cleaning
Refinery systems
Tank truck gasoline loading terminals
Bulk gasoline plants
Storage of petroleum liquids in fixed
roof tanks
Service stations (STAGE I)
Use of cutback asphalt
TOTAL
EXHIBIT 1-3
U.S. Environmental Protection Agency
ESTIMATED CHANGE IN ENERGY DEMAND RESULTING
FROM IMPLEMENTATION OF RACT GUIDELINES IN TENNESSEE
Energy Demand Change
Increased (Decrease)
(Equivalent barrels of oil)
1,200
None
68,000
630
(5,400)
(3,430)
200
None
(53,500)
(200)
(9,270)
Energy Demand Change
Cost/(Savings)a
($ thousand)
15.6
None
884
8.2
(70.2)
(44.6)
2.6
0
(695.5)
(2.6)
(120.5)
(15,900) (206.7)
None None
(17,670) (229.7)
a. Based on the assumption that the cost of oil is $13 per barrel.
Source: Booz, Allen & Hamilton Inc.
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1.3 ECONOMIC IMPLICATIONS OF EACH RACT GUIDELINE
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1.3 ECONOMIC IMPLICATIONS OF EACH RACT GUIDELINE
This section presents a summary of the economic impact
for each of the 13 RACT industrail categories studied.
Following this section is a series of summary exhibits which
highlight the study findings for each industrial category.
1.3.1 Surface Coating of Cans
Currently there are six or seven can coating facilities
in the state of Tennessee. Tennessee is not a major producer
of 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 convert three-
piece can lines to waterborne coatings or install thermal incin-
eration for controlling high solvent coatings. In addition,
some three-piece can facilities may convert to two-piece for
economic or market reasons which would have the effect of lower
VOC emissions.
Emission controls are expected to cost the industry $125,000
in capital and $44,000 in annualized cost. This represents
approximately 0.2 percent of the affected industry's value of
shipments. No major employment, productivity or market structure
changes are expected from the implementation of the RACT guideline.
The industry trend towards production of two-piece aluminum
cans with print-only coatings (rather than print and varnish)
is predicted to continue because of economic advantages and market
demands. The conversion to print-only technology will reduce
current VOC emissions. Because the industry is planning to
convert some facilities to print-only technology in the near
term, associated economic advantages of the conversion have
not been included in the economic analysis of the RACT require-
ments .
1.3.2 Surface Coatings of Coils
There are at least two facilities potentially affected by
the RACT guidelines for coil coating. For these firms the
estimated capital cost for control is $0.3 million and the
annualized cost is $84,000. No major market structure, employ-
ment or productivity impacts are anticipated.
1-11
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1.3.3
Surface Coating of Paper
This study covered nine plants identified from the RACT
requirements for paper coaters. There may be additional
plants in the state of Tennessee which would be affected
by the RACT guidelines and are not included in this analysis.
Excluded from this study are facilities engaged in publishing,
who may coat paper as a segment of the processing line. The
study assumes that these facilities would fall under other
RACT guidelines currently being developed, such as Graphic
Arts. Further definition of the paper coating category
should be established prior to enforcement.
The retrofit situations and installation costs for add-
on controls are highly variable. Based on these variations,
the estimated capital cost to the known affected industry is
between $13.7 million and $14.8 million, with an annualized cost
of $3.6 million to $4.8 million (approximately 1.0 percent of
the affected value of shipments).
Assuming 35 percent heat recovery, the annual energy
requirements are expected to increase by approximately 68,000
equivalent barrels of oil per year. Energy consumption may
decrease if more efficient recovery of incinerator heat is
possible.
Incinerator equipment manufacturers have stated that
there may be significant problems in meeting the anticipated
demand for high heat recovery incinerators on a nationwide
basis.
1.3.4 Surface Coating of Fabrics
There are at least three firms in Tennessee identified as
coaters of fabric and affected by the proposed RACT guidelines.
In addition there may be more potentially affected facilities.
It is estimated that these 3 facilities will be required to
invest an estimated $1.1 million in capital and approximately
$0.3 million in annualized cost to meet RACT limitations.
No significant productivity, employment or market structure
dislocations should be associated with the implementation of
the RACT guidelines.
1.3.5 Surface Coating of Metal Furniture
There are at least seven facilities in Tennessee identified
as manufacturers and coaters of metal furniture, which would
be affected by the proposed limitations for the RACT industrial
category. None of the facilities are believed to have controls
which would meet the proposed limitations.
1-12
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To meet the RACT requirements, these facilities will
need to invest approximately $300,000 in capital, and
the annualized savings of control could be up to $50,000.
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.
1.3.6 Surface Coating of Large Appliances
There are an estimated 19 large appliance manufacturing
facilities in Tennessee potentially affected by the RACT guide-
lines. These manufacturers would be required to invest approxi-
mately $6.6 million in capital and incur additional annualized
costs of $1.6 million (approximately 0.15 percent of industry
statewide value of shipments).
Assuming a "direct cost pass-through,11 the cost increase
for household appliances relates to a price increase of approxi-
mately $0.40 per unit. No major productivity, employment or
market structure dislocations appear to be associated with
implementation of the RACT guidelines.
The high solids (greater than 62 percent by volume) top-
coat application technique preferrred by the industry has not
been proven under normal operating conditions although it
appears to be technically feasible.
1.3.7 Solvent Metal Cleaning
This category includes equipment to clean the surface
for removing oil, dirt, grease and other foreign material by
immersing the article in a vaporized or liquid organic solvent.
The cleaning is done in one of three devices: a cold cleaner,
an open top vapor degreaser, or a converyorized degreaser. This
type of cleaning is done by many firms in many different types
of industries.
Implementation of the proposed regulations in Tennessee
will affect an estimated 834 cleaning operations in 100 facil-
ities. The regulation is expected to have a negligible econ-
omic effect on industry because of the relatively minor changes
required. For Tennessee, the 834 cleaners potentially affected
represent a capital cost of 0.9 million and an annualized cost
of $70,000 (<0.001 percent of industry value of shipments).
-------
Because of the large number of degreasers nationwide that
require retrofit to meet RACT and the inability of manufacturers
to provide equipment on such a large scale, it is doubtful if
all degreasers nationwide can be retrofitted within the 1982
timeframe.
No major productivity, employment and market structure
dislocations are expected to result from RACT implementation.
1.3.8 Refinery Vacuum Systems, Wastewater Separators
and Process Unit Turnarounds
There is only one refinery facility in the state of
Tennessee potentially affected by the proposed RACT guidelines.
The RACT requirements represent a capital investment of approxi-
mately $11,000 and an annualized cost of approximately $3,100.
No significant productivity, employment or market structure
dislocations should be associated with the implementation of
the RACT guideline.
1.3.9 Tank Truck Gasoline Loading Terminals
There are an estimated 31 facilities in the state of
Tennessee potentially affected by the tank truck gasoline loading
terminal limitation requirements. Emission control of these
facilities is expected to require a capital investment of $9.5
million. Product recovery of gasoline will be accrued to bulk
terminal operations not only from bulk terminal emission control
installations but also from the recovery of vapors from service
stations and bulk gasoline plants. Based on this savings, the
net annualized cost for implementation of RACT for bulk gasoline
loading terminals is estimated to be $1.5 million (approximately
0.15 percent of the value of the shipments). Assuming a direct
cost pass-through this represents a cost of 0.26 per gallon
throughput.
No significant productivity, employment or market structure
dislocations should be associated with implementing the RACT
guidelines.
1.3.10 Bulk Gasoline Plants
This industry is characterized by many small plants. Of
these plants, only a few percent are either new or modernized.
The majority of the plants are over 20 years old. Most bulk
plants are located in rural areas where implementation of
RACT to stationary sources is not required in the state of
Tennessee.
1-14
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To meet the RACT requirements, only 2 bulk gas plants in
the urban nonattainment areas must be equipped with vapor balance
and submerged fill systems. This recommended control system
is not cost-effective for the bulk plant operator as most of
the economic credit (for recovered vapors) would be accrued
to a bulk terminal or refinery.
The estimated capital cost and annualized cost to meet
compliance requirements for the 2 facilities represent $28,000
and $7,000 (approximately 0.5 percent of affected plant's value
of shipments), respectively. For these facilities, the price
of gasoline (assuming a "direct cost pass-through") would be
increased $0,002 per gallon. In urban areas, the bulk gasoline
plant markets have been declining because of competition from
retailers and tank truck terminals, and is expected to continue
to decline regardless of the RACT guidelines.
1.3.11 Storage of Petroleum Liquids in Fixed Roof Tanks
There are an estimated 17 fixed roof tanks in the 3 urban
county nonattainment areas in the state of Tennessee which would
have to equipped with a internal floating roof to comply with
the proposed RACT requirements. These VOC emissions (1977)
for these tanks are estimated to be approximately 1,500 tons.
These tanks are primarily owned by major oil companies
and bulk gasoline tank terminal companies. The capital cost
to equip these tanks with a single seal floating roof is
estimated to be $1.1 million. The estimated annualized cost
is $0.12 million, which would represent a price increase
(assuming "direct cost pass-through") of less than $0,001
per gallon of throughput
No significant productivity, employment or market struc-
ture changes should be associated with the implementation of
the RACT guideline.
Implementation of the RACT guideline is estimated to
represent a net energy savings of 9,270 equivalent barrels
of oil annually (assuming 90 percent control efficiency).
1.3.12 Service Stations
There are approximately 800 gasoline dispensing facilities
in the 3 urban county nonattainment areas of Tennessee. The
implementation of submerged fill and vapor balancing at these
stations is estimated to be $1.9 million in capital. The
annualized cost of compliance of $0.47 million represents an
average cost increase of approximately $0,001 per gallon;
however, larger stations will experience a much smaller unit
cost increase. Some service stations could experience loss of
business while vapor control systems are being installed.
1-15
-------
Implementation of the RACT guidelines may accelerate the
trend to high throughput stations because of the increasing
overhead costs. However, the RACT guidelines are not expected
to cause major productivity and employment dislocations to the
industry as a whole.
It is estimated that implementing RACT guidelines for
service stations in Tennessee will result in a net energy
savings equivalent to 15,900 barrels of oil per year,
assuming 95 percent recovery of gasoline. This assumed
control efficiency has not been fully demostrated. Only
a small percent of the economic benefit from the recovered
gasoline vapors will directly accrue to the service stations.
1.3.13 Use of Cutback Asphalt
In 1977, it is estimated that 15,000 tons of cutback
asphalt was utilized in Tennessee. Replacement of the
solvent-based asphalt with asphalt emulsion will cause no
dislocation in employment or worker productivity. Capital
and training cost investment is estimated at $30,000. No
change in paving cost are expected from the implementation
of the RACT guideline.
It is anticipated that sufficient lead time is available
to assure an adequate supply of asphalt emulsion to meet the
increased demand and provide training for municipal employees.
* * * *
A summary of the direct economic implications of imple-
menting RACT in each of the 12 industrial categories studied
is presented in Exhibit 1-4 through 1-16, on the following
pages.
1-16
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EXHIBIT 1-4 (1)
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR CAN MANUFACTURING
PLANTS IN THE STATE OF TENNESSEE
Current Situation
Number of potentially affected facilities
Indication of relative importance of indus-
trial section to state economy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred methods of VOC control
to meet RACT guidelines
Assumed method of control to meet RACT
guidelines
Discussion
There are six or seven can manufacturing
facilities; however, the largest is being
shut down for economic reasons
1977 value of shipments was $40 million to
$45 million. Industry is closely related
to state's food and beverage industries
Beer and beverage containers rapidly
changing to two-piece construction
260 tons per year excluding 455 tons at
plant being shut down
Low solvent coatings (waterborne)
75 percent of cans coated with low solvent
coatings; 2 5 percent of coated cans re-
quiring incinerator for control
Affected Areas in Meeting RACT
Capital investment statewide (excluding
shut down facility)
Annualized cost (statewide excluding
shut down facility
Price
Energy
Productivity
Employment
Discussion
$125,000 (less than 5 percent of current
annual capital appropriations for the
industry
$44,000 (approximately 0.3 percent of the
industry's 1977 statewide value of ship-
ments, excluding the shutdown plant)
Assuming a "direct cost pass through"
less than $0.0001 can increase (based
on a can value of $0,075 per can)
Increase of 1,000 to 1,500 equivalent
barrels of oil annually for operation of
facilities that have to utilize incin-
erators
No major impact
No major impact
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EXHIBIT 1-4 (2)
U.S. Environmental Protection Agency
Affected Areas in Meeting RACT
Market structure
RACT timing requirements (198 2)
Problem area
VOC emission after RACT control
Cost effectiveness of RACT control
excluding shut down facility
Discussion
Accelerated technology conversion to
two-piece cans, further concentration
of sheet coating operations into larger
facilities
Low solvent coating volume requirements
and FDA approval may require some facili-
ties to meet the RACT requirements with
incinerations (rather than low solvent
coating technology)
Low solvent coating technology for end
sealing compound
150 tons per year (21 percent of 1977
emission level or 58 percent of emissions
from affected plants)
$390 to S400 annualized cost/annual
ton of VOC reduction.
Source: Booz, Allen & Hamilton Inc.
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EXHIBIT 1-5
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR COIL COATING FACILITIES IN
THE STATE OF TENNESSEE
Current Situation
Number of potentially affected facilities
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC control
to meet RACT guidelines
Assumes method of control to most RACT
guidelines
Discussion
There are two coil coating facilities with
two lines potentially affected by the coil
coating RACT guideline in Tennessee
Due to the pressures of energy availability
as well as environmental protection, most
firms have or are installing regenerative
type incinerators
Approximately 1,000 tons per year
Regenerative thermal incineration
Regenerative thermal incineration and low
solvent coatings
Affected Areas in Meeting RACT
Capital Investment (statewide)
Annualized Cost (statewide)
Energy
Productivity
Employment
Market structure
RACT timing requirements
Problem area
VOC emission after control
Cost effectiveness of control
Discussion
$0.3 million incremental capital required by
two firms based on model plant costs
$84,000
Small increased fuel consumption for regenerative
incineration
No major impact
No major impact
Some captive coil coating operations not meeting
the RACT limitation may opt to purchase coated
material in lieu of investing significant
capital requirements
There may be delivery and installation problems
if major coating industry sectors who require
incinerators, order and install similar equip-
ment in the same time frame
Low solvent coating technology is currently
inadequate to meet product requirements in all
applications
Approximately 200 tons per year (20 percent
of 1975 VOC emission level)
$84 annualized cost/annual ton of VOC
reduction.
Source: Booz, Allen & Hamilton Inc.
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EXHIBIT 1-6(1)
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR PAPER COATERS IN
THE STATE OF TENNESSEE
Current Situation
Number of potentially affected facilities
Indication of relative importance of the
industrial sector to the state economy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC control
to meet RACT guidelines
Assumed method of control to meet RACT
guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Discussion
Nine plants in the state are expected
to be affected by these regulations.
However, if this category were to be
interpreted to include all types of paper
coating, including publishing, far more
firms would be affected.
The 1977 value of shipments of these nine
plants is estimated to be about $443
million. They are estimated to employ
6310 people.
Gravure coating replacing older systems.
Approximately 12,008 tons per year were
identified from nine plants affected. All
of these are applicable under RACT.
Though low solvent use is increasing,
progress is slow. Add-on control systems
will probably be used.
Thermal incineration with primary heat
recovery.
Discussion
Estimated to be $13.7 million to $18.2 millic
depending on retrofit situations. This is
likely to be more than 100 percent of normal
expenditures for the affected paper coaters.
$3.6 million to $4.8 million annually.
This represents 0.8 to 1.1 percent of the
value of shipments for the nine firms
directly affected.
Assuming a "direct cost pass-through"— 0.8
to 1.1 percent at the three affected firms.
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EXHIBIT 1-6 (2)
U.S. Environmental Protection Agency
Affected Areas in Meeting RACT
Energy
Productivity
Employment
Market structure
RACT timing requirements (1982)
Problem areas
VOC emissions after control
Cost effectiveness of control
Discussion
Assuming 35 percent heat recovery from
the incineration system, annual energy
requirements are expected to increase by
approximately 68,000 equivalent barrels
of oil.
No major impact.
Moderate impact.
Larger firms are likely to absorb sales
of marginally profitable firms.
RACT guideline needs clear definition for
enforcement.
Equipment deliverables and installation of
incineration systems prior to 1982 are
expected to present problems. Development
of low solvent systems is likely to extend
beyond 1982.
Retrofit situations and installation costs
are highly variable.
Type and cost of control depend on par-
ticular solvent systems used and reduction
in air flow.
Approximately 2,281 tons/year (19 percent
of 1977 VOC emission level from three
affected plants).
$370 - $493 annualized cost/annual ton
of VOC reduction.
Source: Booz, Allen & Hamilton Inc.
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EXHIBIT 1-7(1)
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR FABRIC COATERS IN
THE STATE OF TENNESSEE
Current Situation
Number of potentially affected facilities
Indication of relative importance of
industrial sector to the state economy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC control
to meet RACT guidelines
Assumed method of VOC control to meet
RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Discussion
Three plants in the state's non-attainment
areas are expected to be affected by these
regulations.
The 1977 value of shipments of these
plants is estimated to be about $20.2 millioi
They are estimated to employ 300 people in
fabric coating operations.
Newer plants are built with integrated
coating and emission control systems;
older plants are only marginally com-
petitive now.
Current emissions are estimated at about
140 tons/year.
Not yet decided
Direct fired incineration with primary
heat recovery.
Discussion
Estimated to be $0.9 million to $1.2 million
depending on retrofit situations.
$250,000 to $330,000 annually.
Assuming a "direct cost pass-through"—
1.2 to 1.6 percent.
Assuming 35 percent heat recovery, annual
energy requirements are expected to in-
crease by approximately 970 equivalent
barrels of oil.
Productivity
Employment
Market structure
No major impact.
No major impact.
No major impact.
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EXHIBIT 1-7(2)
U.S. Environmental Protection Agency
Affected Areas in Meeting RACT
RACT timing requirements (1982)
Problem areas
VOC emissions after control
Cost effectiveness of control
Discussion
RACT guidelines need clear definition for
rule making.
Equipment deliverables and installation of
incineration systems prior to 1982 are
expected to present problems. Development
of low solvent systems is likely to extend
beyond 1982.
Retrofit situations and installation costs
are highly variable.
Type and cost of control depend on par-
ticular solvent systems used and reduction
in air flow.
Approximately 36 tons/year (19 percent
of 1977 VOC emission level from affected
plants).
$2,200 to $2,900 annualized cost/annual
ton of VOC reduction.
Source: Booz, Allen & Hamilton Inc.
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EXHIBIT 1-8(1)
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR SURACE COATING OF
METAL FURNITURE IN TENNESSEE
Current Situtation
Discussion
Number of potentially affected
facilities
Indication of relative importance
of industrial section to state
economy
There are seven metal furniture
manufacturing facilities
1977 value of shipments was
approximately $109 million
industry-wide and approximately
$58 million for seven affected
facilities
1977 VOC emissions (actual)
Industry preferred method of VOC
control
Assumed method of control to meet
RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized savings (statewide)
953 tons per year
Low solvent coatings
Low solvent coatings
Discussion
$305,000
$51,000 which represents
0.05 percent of the industry's
1977 value of shipments
Price Increase from a few cents to over
$l/unit depending on the surface
area coated
Energy savings 5,400 equivalent barrels of oil
per yr.
Productivity
Employment
Market structure
No major impact
No major impact
No major impact
RACT timing requirements (1982)
Companies using a variety of
colors may face a problem
finding suitable low solvent
coatings
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EXHIBIT 1-8(2)
U.S. Environmental Protection Agency
Affected Areas in Meeting RACT
Problem area
VOC emissions after RACT
Cost effectiveness of RACT
Discussion
Low solvent coating in a variety
of colors providing acceptable
quality needs to be developed
151 tons per year (approximately
16 percent of current emissions
level)
$64 annualized savings per annual
ton of VOC emissions reduction
Source: Booz, Allen & Hamilton Inc.
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EXHIBIT 1-9
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR SURFACE COATING OF LARGE
APPLIANCES IN THE STATE OF TENNESSEE
Current Situation
Number of potentially affected
facilities
Indication of relative importance
of industrial section to state
economy
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of VOC control to
meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
RACT timing requirements
Problem area
VOC emission after RACT control
Cost effectiveness of RACT control
Discussion
There are 20 major large appliance manufacturers
and coaters
1977 statewide value of shipments is approxi-
mately 51.0 billion and represents 7 percent of
the estimated 515 billion U.S. value of shipments
of the major appliance industry
3,323 tons per year
Waterborne primecoat and high solids topcoat
Waterborne primecoat and high solids topcoat
Discussion
56.6 million
51.6 million which represents 0.15 percent of the
industry's 1977 statewide value of shipments.
Assuming a "direct cost pass-through"—increase
of 50.40/unit for household appliances (based on
a price of 5183 per unit appliance)
Reduced natural gas requirements in the curing
operation (equivalent to 3,4 30 barrels of oil
per year)
No major impact
No major impact
No major impact
Possible problems meeting equipment deliveries and
installation are anticipated
Commercial application of high solids (greater
than 62% by volume) has not been proven
997 tons/year (30 percent of 1977 emission
level)
$680 annualized cost/ton VOC reduction
Source: Booz, Allen & Hamilton, Inc.
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EXHIBIT 1-10(1)
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR SOLVENT METAL DEGREASING
IN THE STATE OF TENNESSEE
Current Situation
Number of potentially affected
cleaners
Indication of relative importance
of industrial section to state
economy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of VOC control
to meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Discussion
834 cleaners
Value of shipments of firms in
SIC groups affected is 8.4 billion.
Where technically feasible, firms
are substituting exempt solvents
6,646 tons/year (including solvents
classified as exempt)
Substitution. Otherwise lowest
cost option as specified by EPA
will be used.
Equipment modifications as
specified by the RACT guidelines
Discussion
$0.9 million
$70,000 million (less than
percent of the 1977 affected
facilities' value of shipments)
Metal cleaning is only a fraction
of manufacturing costs; price
effect expected to be less than
0.005 percent for affected facilities.
Less than 300 equivalent barrels
of oil per year increase
5-10 percent decrease for manually
operated degreasers. Will not
effect conveyorized cleaners.
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EXHIBIT 1-10 (2)
U.S. Environmental Protection Agency
Affected Areas in Meeting RACT
Employment
Market structure
RACT timing requirements (1982)
Problem areas
VOC emission after RACT control
Cost-effectiveness of RACT control
Discussion
No effect except a possible
slight decrease in firms
supplying metal degreasing
solvents
No change
Equipment availability-
only a few companies now
supply the recommended
control modifications
No significant problem areas
seen. Most firms will be able
to absorb cost.
5,348 tons/year (80 percent of
1977 VOC emission level—however,
this does not include emission
controls for exempt solvents)
$55 annualized cost per ton of
emissions reduced
Source: Booz, Allen & Hamilton Inc.
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EXHIBIT 1-11
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF IMPLEMENTING
RACT FOR REFINERY VACUUM PRODUCING SYSTEMS, WASTEWATER
SEPARATORS AND PROCESS UNIT TURNAROUNDS
IN THE STATE OF TENNESSEE
Current Situation
Number of potentially affected
facilities
Indication of relative impor-
tance of industrial section to
state economy
Current industry technology
trends
1977 VOC actual emissions
Industry preferred method of
VOC control to meet RACT
guidelines
Estimated method of VOC control
to meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost
(statewide)
Price
Energy
Discussion
1977 industry sales were $181 million. The
estimated annual crude oil throughput was
13 million barrels
No controls have been implemented on waste-
water separation area
873 tons per year
Vapor recovery of emissions by piping
emissions to refinery fuel gas system or
flare and covering wastewater separators
Vapor recovery by piping emissions from
vacuum producing systems to refinery fuel gas
system, cover wastewater separator, pipe
emissions from process units to flare
Discussion
11,000
3,100
No major impact
No major impact
Productivity
Employment
Market structure
VOC emission after control
Cost effectiveness of control
No major impact
No major impact
No major impact
264 tons per year
$5 annualized cost/annual ton of
VOC reduction
Source: Booz, Allen & Hamilton Inc.
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EXHIBIT 1-12
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR TANK TRUCK GASOLINE
LOADING TERMINALS IN TENNESSEE
Current Situation
Discussion
Number of potentially affected
facilities
31
Indication of relative importance
of industrial section to state
economy
Current industry technology trends
1977 VOC actual emissions
Industry preferred method of VOC
control to meet RACT guidelines
1977 industry sales were $1,036 billion. The
estimated annual throughput was 2.44 billion
gallons
New terminals are currently being designed
with vapor recovery equipment
3,775 tons per year
Submerge or bottom fill and vapor recovery
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
Problem area
VOC emission after control
Cost effectiveness of control
Discussion
$9,453 million
$1,552 million (approximately 0.15 percent
of value of shipments)
Assuming a direct cost passthrough
$0.0006 per gallon
Assuming full recovery of gasoline—net savings
of 53,500 barrels annually from terminal
emissions
No major impact
No direct impact
No direct impact
Gasoline credit from vapors from bulk gasoline
plants and gasoline service stations require
uniform RACT requirements through the state
870 tons per year
$155 annualized cost/annual ton of VOC
reduction from terminals including gasoline
credit from vapors returned from bulk gaso-
line plants and gasoline service stations
Source: Booz, Allen & Hamilton Inc.
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Current Situation
Number of potentially affected
facilities
Indication of relative impor-
tance of industrial section to
state economy
Current industry technology
trends
1977 VOC actual emissions
Industry preferred method of
VOC control to meet RACT
guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
Problem areas
EXHIBIT 1-13
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR AFFECTED BULK GASOLINE
PLANTS IN THE STATE OF TENNESSEE
Discussion
Industry sales from affected bulk plants
were 1.36 million. The estimated annual
throughput was 3.2 million gallons.
Only small percent of industry has new/
modernized plants
40 tons per year
Top submerge fill and vapor balancing
Discussion
$27,700
$7,000 (approximately 0.5 percent of value
of shipments)
Assuming a "direct cost passthrough"
industrywide—$0.0021 per gallon increase
Assuming full recovery of gasoline—net
savings of 200 barrels annually
No major impact
No major impact; however, for plants closing, po-
tential average of 5 jobs lost per plant closed
Regulation could further concentrate a declining
industry. Many small bulk plants today are mar-
ginal operations; further cost increases could
result in plant closings
Severe economic impact for small bulk plant
operations. Control efficiency of cost
effective alternative has not been fully
demonstrated
VOC emissions after control
Cost effectiveness
10 tons per year
$245 annualized cost/annual ton of VOC reduction
Source: Booz, Allen & Hamilton Inc.
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Current Situation
Number of potentially affected
storage tanks
EXHIBIT 1-14
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR STORAGE OF
PETROLEUM LIQUID IN THE STATE OF TENNESSEE
Discussion
17
Indication of relative importance of
industrial section to state economy
Current industry technology trends
VOC emissions
Preferred method of VOC control to
meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
Problem area
VOC emission after control
Cost effectiveness of control
The annual throughput was an estimated
276 million gallons
Internal floating roof tanks utilizing a
double seal have been proven to be more
cost effective
1,508 tons per year
^Single seal internal floating roof
Discussion
$1,074 million
$117,000
Assuming a "direct cost" passthrough—
less than $0.0004 per gallon of through-
put
Assuming 90 percent reduction of current
VOC level, the net energy savings repre-
sent an estimated savings of 9,270
equivalent barrels of oil annually
No major impact
No major impact
No major impact
Potential availability of equipment to
implement RACT standard
150 tons per year
$86 annualized cost/annual ton of VOC
reduction
Source: Booz, Allen & Hamilton Inc.
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EXHIBIT 1-15
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR GASOLINE DISPENSING
FACILITIES IN THE STATE OF TENNESSEE
Current Situation
Number of potentially affected facilities
Indication of relative importance of
industrial sector to county economy.
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC control
to meet RACT guidelines
Assumed method of control to meet RACT
guidelines
Affected Areas in Meeting RACT
Capital investment (3 counties)
Annualized cost (3 counties)
Price
Energy
Productivity
Employment
Market structure
Discussion
804 in the 3 urban non-attainment counties.
3 county industry sales from the affected
facilities are $0,330 million with a yearly
throughput of 0.651 billion gallons
Number of stations has been declining
and throughput per station has been
increasing. By 1980, one-half of
stations in U.S. are predicted to
become totally self-service
2514 tons per year from tank loading
operation
Submerged fill and vapor balance
Submerged fill and vapor balance
Discussion
$1.9 million
$0.47 million (approximately 0.1 percent
of the value of gasoline sold)
Assuming a "direct cost pass-through"—
less than $0,001 per gallon of gasoline
sold in the 3 counties.
Assuming full recovery: 770,300 gallons/
year £15,900 barrels of oil equivalent)
saved
No major impact
No major impact
Compliance requirements may accelerate
the industry trend towards high through-
put stations (i.e., marginal operations
may opt to shut down)
a One gallon of gasoline has 125,000 BTU's. One barrel of oil
equivalent has 6,050,000 BTU's.
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Current Situation
Use of cutback asphalt
Indication of relative importance of
industrial sector to state economy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC control
to meet RACT guidelines
Assumed method of control to meet RACT
guidelines
Affected Areas in Meeting RACT
Capital investment
Annualized cost
Price
Energy
Productivity
Employment
EXHIBIT 1-16
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR USE OF
CUTBACK ASPHALT IN THE STATE OF TENNESSEE
Discussion
In 1977, use of cutback asphalt was
14,956 tons in the state.
1977 sales of cutback asphalt were
estimated to be $1.4 million.
Nationally, use of cutback asphalt
has been declining.
3080 tons annually; 1,540 of which would
be controled under the proposed regulations.
Replace with asphalt emulsions
Replace with asphalt emulsions
Discussion
$0.03 million
No change in paving costs are expected.
No change in paving costs are expected.
No savings to user3
No major impact
No major impact
It is estimated that an energy savings of 14,989 barrels of oil equivalent
could accrue to the manufacturer. The total energy associated with man-
ufacturing, processing and laying one gallon of cutback is approximately
50,200 BTUs/gallon. For emulsified asphalts, it is 2,830 BTUs/gallon.
One barrel of oil equivalent is assumed to have 6.05 million BTUs, and
one ton of cutback asphalt is assumed to have 256 gallons.
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2.0 INTRODUCTION AND OVERALL
STUDY APPROACH
-------
2.0 INTRODUCTION AND OVERALL
STUDY APPROACH
This chapter presents an overview of the study's pur-
pose, scope and methodology. It is divided into six sec-
tions :
Background
Summary of State Implementation Plan revisions
and state's need for assistance
Scope
Approach
Quality of estimates
Definition of terms used.
Each of these sections is discussed below.
The approach and quality of estimates is discussed
in detail in each of the respective chapters dealing with
the specific industrial categories affected by the volatile
organic compounds control regulations.
2-1
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2.1. BACKGROUND
The Clean Air Act Amendments of 1977 required the
states to revise their State Implemtation Plans (SIPs)
to provide for the attainment and maintenance of national
ambient air quality standards in areas designated as
non-attainment. The Amendments require that each state
submit the SIP revisions to the U.S. Environmental
Protecton Agency (EPA) by January 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 drection of Region IV, the EPA contracted
with Booz, Allen & Hamilton Inc. (Booz, Allen) to
assist the states of Alabama, Georgia, Kentucky, North
Carolina, South Carolina and Tennessee in analyzing the
economic, energy and social impacts of the SIP revisions
proposed by these states. The assignment was initiated
on September 28, 1978, and, as a first step, the proposed
SIP revisions and the type of 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 an analysis of the direct
economic and energy impacts for those industrial segments
most likely to have a significant impact at the statewide
level. For the most part this included industrial
categories that had more than a few facilities potentially
affected. The next section discusses those specific
industrial categories included in this work scope.
2-2
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2.2 SUMMARY OF PROPOSED SIP REVISIONS IN TENNESSEE
AND THE STATE'S NEED FOR CONTRACTOR SUPPORT
Tennessee has proposed statewide regulations to
reduce volatile organic compound (VOC) emissions by
implementing the Reasonably Available Control Technology
(RACT) guidelines developed by the EPA for existing
stationary sources. The state is also studying implementa-
tion of motor vehicle inspection/maintenance programs in
the non-attainment areas. In addition, the state has
proposed revisions to total suspended particulates (TSP)
and sulfur dioxide emission standards.
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 13 of the 15 industrial
categories for which the EPA has published RACT guidelines.
These 13 RACT industrial categories are described in the
next section. The other two industrial categories (surface
coating of automobiles and magnet wire insulation) were
excluded from this study because none or a very limited
number of sources were affected by the proposed regulation
in those categories. Although the cost impact in those
categories excluded might be significant for an individual
firm studied, it is unlikely that the economic or energy
impact at the macrolevel (statewide) would be significant.
The state officials also wanted to include a large chemical
plant in the study.
2-3
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2.3 SCOPE
The primary objective of this study is to determine
the costs and impact of compliance with the proposed SIP
revisions for six states in EPA Region IV. The study
will emphasize the analysis of direct economic costs and
benefits of the proposed SIP revisions. Secondary
(employment and energy) impacts will also be addressed
but are not the major study emphasis.
In Tennessee, the economic impact will be analyzed
for the implementation of RACT guidelines to reduce VOC
emissions from the following 13 industry categories:
Surface coating of coils
Surface coating of metal cans
Surface coating of paper
Surface coating of fabrics
Surface coating of metal furniture
Surface coating of large appliances
Solvent metal cleaning
Bulk gasoline terminals
Bulk gasoline plants
Storage of petroleum liquids in fixed roof tanks
Service stations — Stage I
Use of cutback asphalt
Miscellaneous refinery sources.
The major study guidelines in the determination of
the economic impact of the RACT guidelines are discussed
below.
The emission limitations for each industrial
category will be studied at the control level
established by the RACT guidelines. These are
presented in Exhibit 2-1, on the following
page.
All costs and emission data were presented for
1977.
2-4
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EXHIBIT 2-1(1)
U.S. Environmental Protection Agency
LISTING OF EMISSION LIMITATIONS THAT REPRESENT
THE PRESUMPTIVE NORM TO BE ACHIEVED THROUGH
APPLICATION OF RACT FOR THIRTEEN INDUSTRY CATEGORIES
Catagoi
RACT Guideline Emission Limitations
Surface Coating Categories Based on
Low Organic Solvent Coatings (lbs.
solvent per gallon of coating, minus
water)
Surface Coating Of:
Cans
. Sheet basecoat (exterior and interior)
Overvarnish
Two-piece can exterior (basecoat and overvarnish)
. Two and three-piece can interior body spray
Two-piece can exterior end (spray or rollcoat)
. Three-piece can side-seam spray "
. End sealing compound
Coils
. Prime and topcoat or single coat
Paper
Fabrics and vinyl coating
. Fabric
. Vinyl
Metal Furniture
. Prime and topcoat or 3ingle coat
Large appliance
. Prime, single or topcoat
Solvent Metal Cleaning
Cold cleaning
Conveyorized degreaser
Open top degreaser
Petroleum Refinery Sources
. Vacuum producing systems
2.8
4.2
5.5
3.7
2.6
2.9
2.9
3.8
3.0
2.8
Provide cleaners with: cover; facility
to drain clean parts; additional free-
board; chiller or carbon absorber.
Follow suggested procedures to minimize
carryout.
Provide cleaners over 2 square meters air/
vapor interface with: refrigerated chillers;
or carbon absorption system; drying tunnel
or rotating basket; safety switches;
covers. Follow suggested procedures to
minimize carryout.
Provide cleaners over 1 square meter open
areas with: safety switches; powered
cover; chiller; carbon absorber. Follow
suggested procedures to minimize carryout.
No emissions of any noncondensible VOC
from condensers, hot wells or accumulators
to a firebox, incinerator or boiler.
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EXHIBIT 2-1(2)
U.S. Environmental Protection Agency
Category
. Wastewater separators
. Process unit turnaround
Bulk Gasoline Terminals
Bulk Gasoline Plants
Storage of Petroleum Liquids in Fixed
Roof Tanks
Service Stations (Stage I)
Use of Cutback Asphalt
a
RACT Guidelines Emission Limitations
Minimize emissions of VOC by providing
covers and seals on all separators and
forebays and following suggested operating
procedures to minimize emissions
Minimize emissions of VOC by depressurization
venting to vapor recovery, flare or firebox.
No emissions of VOC from a process unit
or vessel until it's internal pressure
is 136 kilo Pascals (17.7 psia) or less
Equipment such as vapor control system
to prevent mass emissions of VOC from
control equipment to exceed 80 milligrams
per liter (4.7 grains per gallon) of gaso-
line loaded
Provide submerged filling and vapor bal-
ancing so that VOC emissions from control
equipment do not exceed 80 milligrams
per liter (4.7 grains per gallon) of
gasoline loaded
Provide single seal and internal floating
roof to fixed roof storage vessels with
capacities greater than 42,000 gallons
containing volatile petroleum liquids
for which true vapor pressure is greater
than 10.5 kilo Pascals (1.52 psia)
Provide submerged fill and vapor balance
for any stationary storage tank located
at a gasoline dispensing facility
The manufacture, mixing, storage, use
or application may be approved where:
long-life stockpile storage is necessary;
the use or application is an ambient tem-
perature less than 10°C (50°F) is necessary;
or it is to be used solely as a penetrating
prime coat
a"I Annotated description ofRACT guidelines
Source: Regulatory Guidance for Control of Volatile Organic Compound Emissions from 15
Categories of Stationary Sources, U.S. Environmental Protection Agency, EPA-90512
78-001, April 1978.
-------
Emissions sources included were existing
stationary point sources in some of the appli-
cable industrial categories1 with potential
VOC emissions greater than 25 tons per year in
3 urban counties that were classified as
non-attainment for ozone.2 In the rest of the
state, only sources with greater than 100
tons/year of potential VOC emissions were
included in the study.
Service stations and the use of cutback asphalt
were studied for the 3 urban non-attainment
counties only. Only service stations with
annual throughput over 260,000 gallons and
storage tank capacity over 2,000 gallons were
studied.
All petroleum liquid storage tanks over 42,QQQ
gallons capacity were studied statewide.
Solvent metal cleaning operations were studied
statewide under the following guidelines. In
rural areas, only those sources with potential
emissions greater than 100 tons were studied.
In urban non-attainment areas, the estimated
number of sources with potential emissions
greater than 25 tons per year was studied.
The following volatile organic compounds were
exempted:
Methane
Ethane
- Trichlorotrifluorethane
1,1,1-trichloroethane (methyl chloroform).^
Surface coating, bulk plants and miscellaneous refinery sources.
The urban non-attainment counties include: Davidson, Hamilton
and Shelby.
The exemption status of methyl chloroform under these
guidelines may be subject to change.
2-5
-------
The final compliance timing requirement for
implementation of controls to meet RACT emission
limitations was as follows:
November 1, 19 81 for add-on control
systems
November 1, 1981 for equipment modification
September 1, 1981 for low solvent coatings.
2-6
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2.4 APPROACH
This section describes the overall approach and
methodology 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
Tennessee. The methodology applied to determine the
economic impact for each industrial category in Tennessee
is described in further detail in the first section of
each chapter dealing with the specific industry category.
There are five parts to this section to describe
the approach for determining estimates of:
Industry statistics
VOC emissions
Process descriptions
Cost of controlling VOC emissions
Comparison of direct costs with selected
direct economic indicators.
2.4.1. Industry Statistics
The assembly of economic and statistical data for
each industrial category was an important element in
establishing the data base that was used for projection
and evaluation of the emissons impact. Some of the
major variables for each industrial category were:
Number of manufacturers
Number of employees
Value of shipments
Number of units manufactured
Capital expenditures
Energy consumption
Productivity indices
2-7
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Current economic (financial) status
Industry concentration
Business patterns (small vs. large; downstream
integration)
Age distribution of facilities
Future trends and developments.
Some of the industrial categories studied cover a
large number of potentially affected facilities. For
these categories, industry statistical data were collected .
by applying a categorical approach rather than by attempting
to identify all the individual firms likely to be affected.
The industrial categories studied by this approach
included:
Fixed roof storage tanks
Solvent metal cleaning
Gasoline service stations
Use of cutback asphalt
Bulk gasoline plants.
For these industrial categories, secondary data
sources and nonconfidential Booz, Allen files served as
the primary resources for the data base. Industry and
association in-terviews were then conducted to complete,
refine and validate the industry statistical data base.
For the remaining industrial categories studied, a
more deliberate approach was applied to determine those
firms potentially affected by the proposed regulations.
As a first step, the facilities potentially
affected by the RACT guidelines were identified
from both the Tennessee emission data and
secondary data sources.
These two independently compiled lists
were correlated to identify the facil-
ities potentially affected but not
listed as VOC emitters in the Tennessee
emission data. Representatives of the
State of Tennessee thus identified
those facilities potentially affected
in each RACT industrial category.
2-8
-------
The Booz, Allen study team then performed
telephone interviews with a sampling of
the facilities identified where there was
doubt concerning inclusion.
Industry category statistical data were compiled
using secondary sources such as:
Department of Commerce
Census of Manufacturers
Trade associations
Bureau of Labor Statistics
National Technical Information Services.
The industry statistical data were refined by
two mechanisms:
Assessing the statistical data for reason-
ableness in comparison to the preliminary
list of potentially affected facilities
Using industry and association interviews
for completion and validation.
2.4.2 VOC Emissions
An approach that made maximum utilization of the
existing Tennessee emission data was defined.
State and local air-pollution control agency
representatives were interviewed to determine
the completeness and validity of emission data
available for each RACT industrial category.
Emission data was not available at all the
potentially affected facilities and the emis-
sion inventory had not been completely vali-
dated.
The state and local officials provided emissions
data for relevant industrial categories.
These RACT industrial categories included:
Cans
Coils
Fabrics
Paper
Metal furniture
Large appliances.
2-9
-------
For the other RACT categories to be studied, the
emissions were estimated by applying relevant
factors (VOC emissions per facility, throughput,
etc.) that had been developed by EPA studies.
Although this categorical approach cannot be
validated to the degree of a point source by
point source approach, the emissions can be
reasonably estimated on a statewide basis
because of the large number of sources in each
RACT industrial category. Emissions were
estimated by this approach for the following
RACT industrial categories:
Bulk gasoline plants
Bulk gasoline terminals
Refinery systems
Solvent metal cleaning
Service stations
Cutback asphalt
Fixed roof tanks.
The emission estimates for each of the 13 RACT
industrial categories studied were refined during industry
interviews.
2.4.3. Process Descriptions
For each of the industrial categories, the basic
technology and emission date were reviewed and summarized
concisely 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 technological practice. Additional
alternatives of control that met the requirements of the
RACT guidelines were identified from literature search.
The most likely control alternatives were assessed and
evaluated by:
Technical staff at Booz, Allen
Interviews with industry representatives
Interviews with EPA representatives
Interviews with equipment manufacturers.
2.4.4 Cost of Controlling VOC Emissions
The cost of control to meet the requirements of the
RACT guidelines had been presented in the RACT documents,
other technical EPA studies and trade journal technical
documents and by industry representatives. The approach
applied in developing capital and annualized cost estimates
was to:
2-10
-------
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
technical documents.
It was not within the purpose or the scope of this
project to provide detailed engineering costs to estimate
the cost of compliance.
Cost data presented within the body of the report
were standardized in the following manner:
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 procedure applied was built up from
the following factors:
Depreciation — straight-line over a ten-year
life
Interest — 10 percent
Taxes and insurance — 4 percent
Maintenance — 5 percent.
2-11
-------
The capital-related annual costs do not account
for investment costs in terms of return or
investment parameters (i.e., the "opportunity
cost" of money is not included).
Annual operating costs of compliance with the
RACT guidelines were estimated for each of the
control alternatives studied. The annual
operating costs included were:
Direct labor
Raw material costs (or savings)
Energy
Product recovery cost (or savings)
Maintenance.
Other types of costs, not included in this analy-
sis, involve compliance costs, such as:
Demonstration of control equipment efficiency
Supervisory or management time
Cost of labor or downtime during installa-
tion 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 com-
pliance costs rather than to estimate price changes or other
secondary effects of the regulation. Presented below are
typical comparisons of direct costs with indicators that
are presented in this study.
Annualized cost in relation to current price—To
gain a perspective on the compliance cost in re-
lation to current prices of the manufactured items
2-12
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at the potentially affected facilities, the annu-
alized cost is presented in terms of a price in-
crease assuming a direct pass-through of costs to
the marketplace.
This analysis was based on the average cost
change (including those facilities that may
have little or no economic impact associated
with meeting the proposed standards) divided
by the average unit price of goods 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 statewide
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 ex-
penditures to meet the proposed standard. There-
fore, 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 regulation.
Capital investment as a percent of current annual
capital appropriations—Estimated statewide capital
investment for the potentially affected facilities
divided by the estimated capital appropriations for
the industry affected as a whole in the state (in-
cluding those facilities that may not require any
capital investment to meet the proposed standard).
2-13
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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 quality of the major sources and,
therefore, of the outcomes. These data quality estimates
were ranked into three categories:
High quality ("hard data")—study inputs with
variation of not more than ±25 percent
Medium quality ("extrapolated data")—study inputs
with variation of ± 25 to 75 percent
Low quality ("rough data")—study inputs with
variation of ± 50 to 150 percent.
Each of these data quality estimates is presented in
the individual chapters. The overall quality ranking of
the study inputs for each RACT industrial category was
generally in the medium quality range.
2-14
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2.6 DEFINITIONS OF TERMS
Listed below are definitions of terns 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.
Hydrocarbcn--any organic compound of carbon
and hydrogen only.
2-15
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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 carbonare.
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 (Reapprcved 1977).
Shutdown--the cessation of operation of
a facility or emission control equipment.
2-1G
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Solvent—organic material which is
liquid at standard conditions and which is
used as a aissolver, viscosity reducer or
cleaning agent.
Standard conditions—a temperature of 20°C
(68°F) and pressure of 760 millimeters of
mercury (29.92 inches of mercury).
Startup—the setting in operation of a source
or emission control equipment.
Stationary source—any article, machine,
process equipment or other contrivance from
which air pollutants emanate or are emitted,
either directly or indirectly, from a fixed
location.
Topcoat—the final film of coating applied
in a multiple coat operation.
True vapor pressure—the equilibrium partial
pressure exerted by a petroleum liquid as
determined in accordance with methods described
in American Petroleum Institute Bulletin 2517,
"Evaporation Loss from Floating Roof Tanks,"
1962.
Equivalent barrel of oil—energy demand is
converted into barrels of oil at the conver-
sion rate of 6,000,000 BTtJ 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.
2-17
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3.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
CAN MANUFACTURING PLANTS
IN THE STATE OF TENNESSEE
-------
3.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
CAN MANUFACTURING PLANTS
IN THE STATE OF TENNESSEE
This chapter presents a preliminary economic analysis of
implementing RACT controls for can manufacturing plants in the
State of Tennessee. The chapter is divided into five sections:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Cost and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic implications.
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 Tennessee.
The quality of the estimates is described in detail in
the latter part of this section.
3-1
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3.1.1 Industry Statistics
Industry statistics on can manufacturing plants were ob-
tained 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 1978 Tennessee
Directory of Manufacturers inventory and supplemented by a
review of the 197 6 County Business Patterns and interviews
with selected can manufacturing corporations. The number
of employees was obtained from the 1978 Tennessee Directory
of Manufacturers.
The number of cans manufactured was based upon scaling up
1972 published data to 1977.
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 Tennessee was
reported as $16.9 million.
The value of shipments for 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 1972, the 1976
production in Tennessee was estimated to
have been $24 million representing 325
million units.
For 1977, the U.S. Industrial Outlook, 1977,
indicates that the increase in production is
3 percent, with a 10 percent increase in
value of shipments. However, based upon
the interviews, the 1977 production was
estimated to be 600 million cans, and value
of shipments at $40 million to $4 5 million.
The product mix of the type of cans currently
produced in the state was estimated based on
the interviews.
3.1.2 VOC Emissions
The data for determining the current level of emissions
was estimated by the study team because the Tennessee emissions
inventory was unavailable at the time this preliminary assess-
ment was undertaken. Most can manufacturing plants employ similar
technology to produce the same product, so that there is a good
correlation between can production and coating consumption once
the type of can manufactured is known.
3-2
-------
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. The data provide
the alternatives available for controlling VOC emissions from
can manufacturing plants. Several studies of VOC emission con-
trol 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
manufacturing plants in Tennessee. The specific studies analyzed
were Air Pollution Control Engineering and Cost Study of General
Surface Coating Industry, Second Interim Report, Springborn
Laboratories, and informational literature supplied by the Can
Manufacturers Institute to the state EPA programs.
The alternative approaches to VOC control as presented in
the RACT document were supplemented by several other approaches.
The approaches were arrayed and the emissions to be reduced from
using each type of control were determined. This scheme forms the
basis of the cost analysis, for which the methodology is described
in the following paragraphs.
3.1.4 Cost of Control Approaches and the Resultinq 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 cost
Incremental costs for materials and energy
Technical feasibility by 1981
(This estimate was based on discussions with knowl-
edgable individuals in the can manufacturing
industry.)
3-3
-------
Aggregating costs to the total industry in Ten-
nessee.
Costs were determined from analysis of the previously
mentioned studies:
Control of Volatile Organic Emissions from
Stationary Sources, EPA-450/2-77-008
Air Pollution Control Engineering and Cost
Study of General Surface Coating Industry,
Second Interim Report, Springborn Laboratories
and from informational data supplied by the Can Manufacturers
Institute and from interviews with major can manufacturing
companies.
The cost of compliance and the expected emission reduction
in Tennessee were developed based on plant operational data
included in the Tennessee emission inventory and refined during
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 "feACT controls in Tennessee.
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 Tennessee. 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. It should be noted
that the findings are preliminary estimates because the estimates
of costs of control are only as good as the assessment of the 1977
baseline, particularly the degree of usage of "exempt" solvents
and the percentage of solvent that is actually incinerated.
3-4
-------
EXHIBIT 3-1
U.S. Environmental Protection Agency
DATA QUALITY
A B C
Hard Extrapolated Estimated
Study Outputs Data Data Data
Industry statistics X X
Emissions X
Cost of emissions X
control
Statewide costs of X
emissions
Overall quality of X
data
Source: Booz, Allen & Hamilton Inc.
-------
3.2 INDUSTRY STATISTICS
Industry characteristics, statistics and business trends
for can manufacturing plants in Tennessee are presented in this
section. The source of industry statistics was the Tennessee
Directory of Manufacturers, The Can Manufacturers' Institute
and the individual can manufacturing companies. Data in this
section form the basis for assessing the impact of implementing
RACT to VOC emissions from can manufacturing plants in the state.
3.2.1 Size of the Industry
The can manufacturing industry in Tennessee is small when
compared to the industry in the midwestern states. There are
six or seven can manufacturing facilities in the state; all
but one is relatively small by industry standards. These plants
primarily assemble food and beverage cans from precoated stock
shipped to the plants from facilities in other states. Exhibit
3-2, on the following page, presents a list of seven can facilities
in the state that have been identified. The American Can Company
plant in Memphis will be closed during 1978 and the Boise Cascade
plant in Jackson is probably incorrectly included in SIC 3411.
The industry shipped 32.5 million cans with an estimated value
of $24 million in 1977, while employing 400 to 500 people. Can
industry capital investments are estimated to have been $2 million
to $6 million in 1977, based upon an extrapolation of 1972 data.
3.2.2 Comparison of the Industry to the State Economy
The Tennessee can manufacturing industry employs 0.1 percent
of the state labor force, excluding government employees. The
state appears to be a net importer of cans, both in the form of
coated stock and fabricated.
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. Of the seven can
manufacturing facilities identified in Tennessee, six are inde-
pendent and one is captive. There are no fully integrated
can manufacturing plants in the state. All plants form cans
from stock and ends coated in other states.
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:
3-5
-------
Name Of Firm
Location
American Can Company
American Can Company
National Can Company
Diamond International
Stokley Van Camp
Ring Can Company
Boise Cascade
Chattanooga
Memphis
Collierville
Dandridge
Newport
Oakland
Jackson
Source: Booz, Allen & Hamilton Inc.
EXHIBIT 3-2
U.S. Environmental Protection Agency
LIST OF METAL CAN MANUFACTURING FACILITIES
POTENTIALLY AFFECTED BY RACT IN TENNESSEE
Product
3-piace soft drink cans
3-piece beverage cans
3-piece beer and soft
drink cans
3-piece food cans
Not available
3-piece food cans
Lard cans
Composite cans (oil?)
Notes
Can assembly only
Uses solvent coatings
Exempt under Rule 66
Can assembly only
Plant being closed in 1978
Can assembly only
Can assembly only
Can assembly only
Captive use only
Little or no coating
Not available
Probably not included
in RACT under can coating
-------
The need to protect different products with
varying characteristics from deterioration
through contact with the metal can
The decoration requirements of customers
and requirements for protection of the
decoration.
Nationally, the can industry produces more than 600 different
shapes styles and sizes to package more than 2,500 products. A
relatively few can sizes and coating combinations employed for
packaging beverages and food represent about 80 percent of the
market. The approximate percentage of total can production repre-
sented by the major groups follows:
Type of Can Percent of Total Production
Beer and soft drink 54
Fruit and vegetable 18
Food cans in the category that
includes soup cans 8
Other 20
TOTAL 100
In Tennessee, the small can industry is focused on meeting
the needs of the beverage and vegetable canning industries
in the state. Of the 32.5 million cans produced in Tennessee in
1977, approximately 200 million (61 percent) are estimated to
have been beer and soft drink cans, and 125 million (39 percent)
were food cans.
Nationally, the can industry has experienced rapid tech-
nological 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 capacity with two-piece cans. There is evidence
that this trend will continue, so that by 1981 about 80 percent
of the beverage cans and a relatively small but growing percentage
of other cans will be of two-piece construction. However, to date,
no two-piece beverage can plants have been constructed in Ten-
nessee.
3-6
-------
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 Tennessee.
3.3.1 Can Manufacturing Operations
The can industry produces cans using two fundamental
technologies, the traditional three-piece method and the
newer two-piece technology.
The three-piece can technology consists of two separate
operations: sheet coating and can fabrication (assembly). Sheet
coating and can assembly operations are frequently performed in
separate facilities. The major can manufacturers operate cen-
tralized facilties for the coating and decorating of flat sheets.
These centralized plants are often called "feeder plants." (There
were no feeder plants in Tennessee during 1977.) Sheets are coated
at a rate of about 2.5 base boxes per minute, which is equivalent
to approximately 1,250 twelve-ounce cans per minute. The specific
operations in three-piece can manufacture are summarized below.
Sheets of metal are coated and decorated with
28 or 35 can bodies (outs). This is accomplished
in two steps.
The sheets are base coated on the interior
side and then passed through a wicket oven.
Food cans, as well as some beer and soft drink
cans, are given an exterior base coat.
In the case of beer and soft drink cans,
the base coated sheets are decorated (printed),
over coated with varnish and then cured in a
smaller wicket oven.
Exhibits 3-3 and 3-4, on the following pages,
present flow diagrams of the base coating
and decorating operations.
3-7
-------
Bon PUIS) BASS CMTC9
psosa
Source: U.S. Environmental Protection Agency
EXHIBIT 3-3
U.S. Environmental Protection Agency
SHEET BASE COATING OPERATION
-------
EXIITBIT 3-4
U.S. Environmental Protection Agency
SHEET PRINTING OPERATION
CUkBOT
pnmia
pMoaa
-------
Can bodies are formed from the coated sheets.
The printed sheets are slit into individual
body blanks and fed into the "body maker."
The blank is rolled into a cylinder and
soldered, welded or cemented.
The seam is sprayed (striped) on the
inside and outside with an air dry lacquer
to protect the exposed metal. Sometimes
this is done only on the inside surfaces.
Can ends are formed from coated sheet stock and
fed to the end seamer where final fabrication is
completed.
Can ends are stamped from coated stock and
perimeter coated with synthetic rubber com-
pound gasketing.
Solvent-based compounds are air-dried and
water-based compounds are oven-dried.
The can is fabricated from the body and the end in an
"end sealer," leak tested and palletized for shipment.
Exhibit 3-5, on the following page, presents a schematic
of can end and three-piece can fabricating operations.
Two-piece cans are generally manufactured in an integrated
high-speed process capable of producing 600 or 800 cans
per minute.
Coil stock is formed into a shallow cup.
The cups are drawn and ironed into the form
of a can.
The cans are washed to remove the lubricant.
An exterior base coat is applied (if required)
by reverse roller coating and cured in a con-
tinuous oven.
The cans are printed and then coated with a
protective varnish. The coating is then baked
in an oven. Steel cans are sometimes given two
separate interior coatings.
3-8
-------
tIBOil
ITC7MIMIR
CK70SOaiKWII
EXHIBIT 3-5
U.S. Environmental Protection Agency
CAN END, AND THREE-PIECE BEER AND BEVERAGE
CAN FABRICATING OPERA!lON
tm rcastn
=^>
0
V'
0
V
(sauttUR
UABIUIU
cssvczsa
.acsa ac3
satttt b ass riAStt®p
Environmental Protection Agency
-------
The cans are necked, flanged and tested.
The interior of the cans are spray coated
and baked in the oven.
An exterior end spray coating is applied:
For aluminum cans to prevent blocking
For steel cans to prevent rusting.
Exhibit 3-6, on the following page, is a process
diagram of a two-piece can fabricating and coating
operation.
Two-piece cans are largely made from aluminum.
Virtually all aluminum cans are of two-piece
construction.
Aluminum lends itself to two-piece construction,
yet offers no advantage to warrant converting
three-piece can lines to aluminum.
3.3.2 Emissions and Current Controls
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 for low solvent systems. It is
important to note that, in most instances, can manufacturing
does not require all the coatings.
Exhibit 3-7 presents VOCs resulting from coating
operations used in the manufacture of two-piece
cans.
Exhibit 3-8 presents VOCs resulting from sheet
coating operations used in the manufacture of
three-piece cans.
Exhibit 3-9 presents VOCs resulting from typical
three-piece can assembly operations.
3-9
-------
EXHIBIT 3-6
U.S. Environmental Protection Agency
TWO-PIECE ALUMINUM CAN FABRICATING AND COATING
OPERATION
f
toaL
tewaa
BAIL
KW»R
0AMIH
WHCMV1AAV
lintBM 0AM COATffl
ream* Aaa ovt wuuaa
cmto t
9
n 0i
°oo°'
ema
tariMon «oov srtiAV
tQailTIMORinSPflAT
ASCCflMIL CO Aim
II AH
limn
cacnto AI99
rtAMoan
CV3Q
Source:
U.S. Environmental Protection Agency
-------
EXHIBIT 3-7
U.S. Environmental Protection Agency
TENNESSEE EMISSIONS—CAN COATING
RACT Category - Metal Cans
SIC
CODE COMPANY NAME LOCATION EMISSIONS
(tons/yr.)
3411 American Can Company Chattanooga 145
3411 American Can Company Memphis 4 55
Source: Verbal information from state of Tennessee
-------
EXHIBIT 3-U (1)
U.S. ritviroiunentdl Protection Agency
EMISSIONS FOR TYPICAL COATING
OPERATION USED IN THE MANUFACTURE
OF TWO-PIECE CANS
Operation
Coating Properties
Organic
Penalty SolIda Solvent
(lb./gal.) (vt. ») (wt. %) (lb./gal.)
Water
(gal./gal.
coating)
VOC
(lb. aolvent/
gal. laas water)
VOC
(lb. solvent/
gal. lncl. water)
Yield
(1000 can/
gal.)
Organic Syitems
Print and varnlah 6.0
Size and print 8.0
White base coat and
print 11.0
Interior body spray 7.9
End coating A1 8.0
End coating steal 8.0
45
40
62. 5
26
45
45
100
100
100
100
100
100
4.40
4.80
4.13
5.85
4.40
4.40
4.40
4.80
4.13
5.85
4 .40
4.40
4.40
4 .80
4.13
5.8S
4 .40
4 .40
12
20
9
6a
200
40
Low Solvent Systems
Waterborna
Print and varnish 8.5
Snu and print 8.5
White baae coat and
111 i n t 11.7
Interior body bpray 8.55
Lnd coating A1 8.5
LnJ coating utecl 8.5
UV Cure lllgh Sollda
Print and varnish*1 8.0
35
30
62
20
35
35
95
20
20
20
20
20
20
100
1.11
1.19
0.89
1. 37
1.11
1.11
0.40
0.53
0.S7
0.43
0.66
0.53
0.53
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
2S
a. Assuming 75 percent beer cans, all given a single coat, and 25 percent soft drink cans, given a double coating
b. Boor, Allen i Hamilton, Inc. estimate based on data supplied by CM I, individual can manuf actururi. and the
LI'A document 4'jU/J-77-OOti
-------
EXHIBIT 3-0 (2)
U.S. Environmental Protection Agency
Operation Production
(cana/min.)
(Million
cana/yr.)
Coating Consumed
(gal./hr.)
(1000 gal./yr•)
(lb./hr.)
VOC
(tons/yr.J
(lb./mi 11 Ion cans)
Organic Systaas
Print and varnish 650
Size and print 650
White bass coat 650
and print
Interior body 650
spray
End coating A1 650
End coating steel 650
lost solvent systems
Watarborne
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
253.5
253.5
253.5
253.5
253.5
253.5
3.25
1.95
4.33
6. SO
0. 20
0.98
3.55
2.29
4. as
7.00
0. 20
0. 98
1.56
21.1
12.7
28.1
42. 3
1.3
6.4
23.1
14.9
31.7
50.7
1.3
6.4
10.1
14.3
9.4
17.8
38.0
0.9
4.3
3.9
2.7
4.3
10.6
0.2
1.1
0.6
46.5
30.6
57.9
123.5
2.9
14.0
12.7
8.8
14.0
34.5
0.7
3.6
2.0
364
241
457
974
23
110
100
69
110
272
6
28
15
Source: Booz, Allen t Hamilton Inc. estimates based on data supplied by Can Manufacturers Institute and interviews with can companies.
-------
EXHIBIT 3-9 (1)
U.S. Environmental Protection Agency
COATING AND PRINTING OPERATIONS USED IN
THE MANUFACTURE OP THREE PIECE CANS
(Sheet Coating Operation)
Operation
Coating Properties
Penalty
(lb./gal.)
Organic
Solvent
Water
VOC
VOC
Sol Ida
(wt *) (wt ») (lb./gal.) (qal/qal (lb. solvent/ (lb. solvent/
varnish
Dry Coating Thickness
(
lb.
bascbox)
coating)
gal. less
gal. including
water)
water)
Conventional Organics Systems
Siting and print
8.0
40
100
4. 80
0
4.80
4.80
5
0.086
Inside basecoat
8.05
40
100
4.B3
0
4.83
4.83
20
0. 346
Outside white and print
11.0
62.5
100
4.13
0
4.13
4.13
40
0.692
Outside sheet printing and
8.0
45
100
4.40
0
4.40
4.40
10
0.172
Low Solvent Systems
Biiing (waterborne)
B.S
30
20
1.19
0.57
2.76
1.19
5
0.086
Inside basecoat
High solids
B.O
80
100
1.60
0
1.60
1.60
20
0. 346
Waterborne
8.8
40
20
1.06
0.51
2.15
1.05
20
0.346
Outside whlta
High solids
12.0
80
100
2.40
0
2.40
2.40
40
0.692
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 (waterborne)
-------
EXHIBIT 3-9 (2)
U.S. Environmental Protection Agency
Operation
Production
(base box
hr.)
(11)00 base boxes'
yea r)
Coating Consumption
(gallon
basebox)
(ga1 ion
hour)
(1000 gal.
year)
(lb.
hour)
VOC
(tons
year)
<
lbs.
1000 baur- boxes)
Conventional Organlcs Systems
Sizing and print ISO
Inside baaecoat 150
Outside white and print 150
Outside sheet printing and varnish ISO
240
240
240
240
.027
.107
. 100
.048
4.1
16.1
15.0
7.2
6.6
25.7
24.0
11.5
19.7
77.8
62 .0
31.7
15.8
62.2
49.6
130
517
413
211
Low Solvent Systems
Sizing (watarborne)
Inside basecoat
High solld9
Watarborne
Outside white
High solids
Hatorborne
Outside sheet print and varnish
(waterborne)
150
150
150
150
150
150
240
240
240
240
240
240
.034
.054
.090
.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: Bool, Allen i Hamilton Inc. estimates based on data supplied by Can Manufacturers Institute and Intrrvlu.. ui»i.
1 witri cAn cof»panl«i
-------
The emissions from the industry, developed through the
analysis of typical coating operations and the assumed product
mix, total an uncontrolled level of 717 tons. Emissions from
producing typical products are included in Exhibits 3-12 and 3-13
under the 1978 base case alternatives.
Can Type Quantity VOC Total VOC
(million) (tons/million) (tons)
3-piece beer and 250 1.061 265
soft drink assembly
with body spray
3-piece beer and 250 1.79 448
soft drink
3-piece food 100 0.044 4
assembly
TOTAL 600 717
The following assumptions were made:
250 million beverage cans were produced from precoated
and decorated stock. The emission sources were:
Inside stripe—88 pounds per million cans
Outside stripe—138 pounds per million cans
Inside spray—1,463 pounds per million cans
End compounding—433 pounds per million cans.
250 million beverage cans were produced by first coating
sheet stock:
Inside base coat—1,034 pounds per million
cans
Outside print and varnish—412 pounds per
million cans
Inside stripe—88 pounds per million cans
Outside stripe—138 pounds per million cans
Inside spray—1,463 pounds per million cans
End compounding—433 pounds per million cans.
All food cans were produced from precoated stock and
precompounded ends. The only emission source was the
inside stripe--88 pounds per million cans.
3-10
-------
The data developed during the interviews indicate that the
industry is generally not incinerating emissions at plants in
Tennessee. However, the industry may be using waterborne and
also exempt solvents as defined by Rule 66; use of exempt sol-
vents is not an acceptable approach under RACT.
3.3.3 RACT Guidelines
The RACT Guidelines for VOC emission control are specified
as the amount of allowable VOC, in pounds per gallon of coating,
minus any water in the solvent system. To achieve this guide-
line, RACT suggests the following options:
Low solvent coatings
Waterborne
High solids
Powder coating
Ultraviolet curing of high solids coatings
Incineration
Carbon adsorption.
The RACT guidelines have established different limitations
for each of four groups of can coating operations. Exhibit 3-10,
on the following page presents the recommended VOC limitations,
compared with typical, currently available, conventional coatings.
3.3.4 Selection of the Most Likely RACT Alternatives
Projecting the most likely industry response for control
of VOC emissions in can manufacturing facilities is complicated
by the thousands of different products offered by the can
industry. Based on industry interviews, several general assump-
tions can be made regarding the industry in Tennessee as well as
nationally.
The industry preferred response will be to use low
solvent coatings (primarily waterborne) wherever
technically feasible because of their low cost—see
incremental cost comparisons on Exhibits 3-12 and
3-13.
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.
3-11
-------
EXHIBIT 3-10
U.S. Environmental Protection Agency
RACT GUIDELINES FOR CAN COATING OPERATIONS
Coating Operation Recommended Limitation
kg. per liter lbs. per gallon
of coating of coating
(minus water) (minus water)
Sheet basecoat (exterior)
and interior) and over-
varnish; two-piece can
exterior (basecoat and
overvarnish)
Two- and three-piece can
interior body spray,
two-piece can exterior
end (spray or roll coat)
Three-piece can side-seam
spray
End sealing compound
0.34 2.8
0.51 4.2
0.66 5.5
0.44 3.7
Typical Currently
Available
Conventional Coatings
lbs. per gallon
of coating
(minus water)
4.1-5.5
6.0
7.0
4.3
Source: U.S. Environmental Protection Agency
-------
The industry will not install carbon adsorption
systems because of the very poor performance record
established to date in several can plants that have
evaluated this control approach.
Six 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 3-11, on the following page.
The resulting emissions are summarized in Exhibits
3-12 and 3-13, at the end of this section. For
cases involving incineration, the following assump-
tions were made.
Energy cost is $2.25 per million BTUs.
Capital cost is $20,000 per 1000 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.
The assumptions on cost operating parameters and likely in-
dustry response to each control alternative were based upon dis-
cussions with knowledgeable industry sources and on Air Pollution
Control Engineering and Cost Study of General Surface Coating
Industry, Second Interim Report, Springborn Laboratories.
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.
The production of beer cans differs from the production of
soft drink cans in some respects that have not been considered
in this study.
Beer cans almost always have an exterior stripe,
but soft drink cans frequently do not.
3-12
-------
EXHIBIT 3-11
U.S. Environmental Protection Agency
ESTIMATED PERCENTAGE OF CANS
TO BE MANUFACTURED IN 1982
USING EACH VOC CONTROL ALTERNATIVE
Type Of Can
Manufactured
Waterborne
Or
Other Low
Solvent
Coatings
Thermal
Incineration
With Primary
Heat Recovery
Print Only,
All Low
Solvent
Coatings
Low Solvent
Coatings
Except
End Sealant
Which is
Incinerated
UV Cured
Outside Varnish
Waterborne
Inside Spray
2-piece beer
and soft
drink
3-piece beer 70 10 — 20
and soft
drink
3-piece food 50 50
and other
cans
Source; Booz, Allen & Hamilton Inc.
-------
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 eliminated 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 by 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 metal.
The yield (spoilage) is the same—it appears
that the industry will continue to encounter
significant spoilage in changing over to new
coatings. However, as the technology is
established, it is assumed that spoilage will
decline to 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 80 percent reduction at
a cost of about $72 per ton.
3-13
-------
It is estimated that 70 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.
Thermal incinerators are widely employed in the middle west but
no thermal incinerators have been identified in Tennessee.
The capital required for five incinerators would be about
$320,000—assuming an installed cost of $20,000 per 1,000 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 cost would be the same as the base
case.
The total incremental cost of adopting thermal incineration
is estimated to be about $834 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 10 percent of all three-piece beer and soft drink
cans manufactured in Tennessee in 1982.
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 $93 per million cans.
3-14
-------
Material cost would be the same.
The total incremental cost of this scenario would be
about $171 per million cans. This represents a cost increase
of about 0.2 percent, to reduce emissions by 80 percent. It is
estimated that about 20 percent of the beer and soft drink cans
will be produced using this technology. (This does not include
cans that are precoated with noncomplying coatings in other states.)
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.
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 needed to meet diverse
requirements has also caused coating manufacturers
to focus on the large-volume coatings required for
beer and soft drinks.
As a result, it is estimated that only 50 percent of the
cans will be produced using this control approach. (This category
includes noncomplying coatings that are applied in feeder plants
located in other states.)
3-15
-------
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, $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 50
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. The end sealing compound appears to
be the coating most likely to be unavailable in low solvent
form by 1982—end sealing compounds released about 18 percent
of the VOC emissions from food can manufacturing operations.
The total incremental cost of this scenario is about $210
per million cans; $100 in capital cost and $20 in energy costs.
The emissions are reduced by about 79 percent to 0.25 tons per
million cans. It is estimated that no cans would be produced
using this approach; cans would be precoated with noncomplying
coatings in other states.
3-16
-------
Alternative Annualized Incremental Costs
Annualized
Capital Capita] Cost Materials Energy Total
(5) (5) (S) (S) (?)
1978 BASE CASE 0 0 0 0 0
Print and varnish
Nonconforming interior
body spray (exempt
solvents)
End coating
WATERBORNE AS PROPOSED 120 30 0 0 30
IN RACT
DASE CASE WITH THERMAL 266 66 0 62 128
INCINERATORS S
PRIMARY HEAT RECOVERY
SUPPLEMENTAL SCENARIO 1 80 20 (540) (230) (750)
Print only
Waterborne interior
body spray
End coating using a
low varnish solvent
SUPPLEMENTAL SCENARIO 2 120 30 010 105 734
Print
UV cured varnish
Waterborne interior
body spray
End coaung using a
low solvunt varnish
a. Not applicable
Source: boon, Allen & Hamilton Inc. estimates
EXHTBIT 3-12
U.S. Environmental Protection Agency
EMISSIONS PROM COATING TWO-PIECE ALUMINUM
BEER AND SOFT DRINK CANS PER MILLION CANS
Emissions
Coating VOC VOC Incremental
Input Emissions Decrease Cost
(gal.) (tons) (tons) % (per ton)
250 0.67 a a a
340 0.19 0.48 75 63
250 0.39 0.29 42 441
200 0.14 0.53 79 (1,415)
240
0.15
0.52 78
1,411
-------
Case
Annualized Incremental Costs
Annualized
Capital
Capital Cost/Millions Materials Energy Total
(?) (5) (?) (5) (S)
BEVERAGE CANS
1978 BASE CASE 0 0 0 0 0
Interior base coat
Decoration and/or
varnish
Interioring and
exterior stripe
Interior spray
End sealant
WATERBOkNE AS PROPOSED 416 104 0 0 104
IN RACT
BASE CAbE WITH THERMAL 2,670 668 0 166 834
INCINERATORS AMD HEAT
RECOVERY PRIMARY
SUPPLEMENTAL SCENARIO 3
Waterborue except end
sealant which is
incinerated
686
171
20
191
FOOD CANS
1978 BASE COAT
Interior base coat
Exterior base coat
Interior stripe
End sealant
WATERBOKNE AS PROPOSED
IN RACT
453
113
95 687
BASE CASE WITH THERMAL
INCINERATORS AND
PRIMARY HEAT RECOVERY
2, 380
595
95 687
SUPPLEMENTAL SCENARIO 4
AIL waLerborne except
end seiilant which is
incinerated
768
192
17 209
a. Not applicable.
Source: Lioo^, Allen f* Hamilton Inc. estimates.
EXHIBIT 3-13
U.S. Environmental Protection Agency
EMISSIONS FROM COATING THREE-PIECE CANS
PER MILLION CANS
Coating And Emissions
Coating VOC VOC Incremental
Input Emissions Decrease Cost
(gal.) (tons) (tons) * (? per ton)
894 1.79 a a a
720 0.34 1.45 81 72
694 0.74 1.05 59 794
715 0.35 1.44 80 133
424 0.99 a a a
439 0.24 0.75 76 151
424 0.19 0.80 81 859
435 0.23 0.76 77 275
-------
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 emissions for actual can manu-
facturing 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 representative plants describe the situation in
most can manufacturing facilities.
Representative Plant A produces 80 percent three-
piece beer and soft drink cans and 20 percent
three-piece food cans using three assembly lines.
Each can assembly line operates at 400 cans per
minute, the beer lines for 5,000 hours annually
and the food can lines for 3,000 hours annually.
Representative Plant B produces food cans from
precoated stock. It contains one can assembly
line which operates at 400 cans per minute for
3,000 hours annually. The total plant production
is 72 million cans.
The capital cost to adopt the alternative controls to the
two representative plants ranges from $10,000 (to convert the one-
line assembly plant to waterborne coatings) to $160,000 (to retro-
fit the three-line assembly plant with incinerators). The
incremental operating costs (energy plus 25 percent of capital)
range from $5,000 for operating the small food can assembly
plant with waterborne coatings to about $150,000 for operating
incinerators at the larger three-piece assembly plant. Capital
and annual operating costs for each of the representative plants
is presented for each applicable alternative on Exhibit 3-14,
on the following page.
3.4.2 Extrapolation of the Costs to the Statewide Industry
The costs developed are incremental costs based on the
production volume and mix estimate for 1977. Industry changes
related to plant closing, conversion to two-piece lines, con-
sumption patterns or other areas not directly related to RACT
implementation were not included. One exception is that the
trend to print-only on existing lines was addressed and the
portion allocated to RACT was estimated and included in the
final figures.
3-17
-------
Representative Plant
Waterborne
Annual
Capital Expense
Thermal Incinerators
Annual
Capital Expense
A. 3-piece beer & soft
drink and food can
80
20
160
150
B. Food can assembly 10 3 30 10
plant 2 assembly
lines with inside
striping
72 million cans
a. Not applicable
b. Not considered to be a likely response by 1982
Source: Booz, Allen & Hamilton Inc. estimates
EXHIBIT 3-14
U.S. Environmental Protection Agency
COST OF IMPLEMENTING RACT ALTERNATIVES FOR
REPRESENTATIVE CAN MANUFACTURING PLANTS (51,000)
Print Only/Waterborne
Annual
Capital
Expense
UV Cured/Waterborne
Annual
Capital
b
Expense
b
Waterborne
Incinerated End Sealant
Annual
Expense
Capital
82
42
-------
The can manufacturing industry in Tennessee is part of an
integrated nationwide network.(the greatest volume of cans are
produced by firms with nationwide operations for customers who
source their products nationwide), of facilities using established
and nonproprietary technology. Therefore, Tennessee costs can
be readily estimated from data developed on a nationwide basis.
Extrapolation of the costs to the statewide industry requires,
first, segmenting the industry in Tennessee according to the types
and number of major cans produced, quantifying emissions from
each type of can production and identifying the 1977 level of
controls, if any, to develop a 1977 baseline case. Second, the
likely industry response to the regulations must be developed;
and finally, the cost of implementing this response must be
calculated. The data and estimates necessary to perform this
extrapolation have been presented in previous sections.
Can production (in units) by type was presented
in section 3.2.3.
Emissions (per million cans) from the production
of cans using the various coating operations were
presented in Exhibits 3-7, 3-8 and 3-9 and combined
on Exhibits 3-12 and 3-13, for several control
alternatives for the major types of cans.
Theoretical uncontrolled emissions were calculated
by multiplying the number of cans of each type
by the 1977 base case alternative on Exhibits 3-12
and 3-13. This estimate of 717 tons was pre-
sented in section 3.3.2.
The 1977 base line level was assumed to be the
theoretical uncontrolled level since no inciner-
ation or low solvent coatings were used. (Low
solvent coatings were used in 1978.)
The industry response in 1982 to the RACT alternative was
presented in section 3.3.4 and summarized on Exhibit 3-11. It
included a discussion of the cost and emission reductions from
the theoretical level of uncontrolled emission. Exhibit 3-15,
on the following page, shows that likely industry capital expen-
ditures of $125,000 will be required to comply with RACT.
The annual compliance cost is estimated at $160,000. It is
important to note that the largest can plant is being shut down
for economic reasons. This plant was the source of over 60 percent
of the emissions. The capital cost to the can industry, excluding
this plant, is believed to be $125,000; the annual compliance
cost, $44,000; and the emission reduction, 112 tons.
Annual average unit cost of emission reduction caused by
RACT is estimated to be $393 per ton. Three-piece food and other
can assembly has a high unit cost, $5,000 per ton.
3-18
-------
Can Type
Can Production
(millions of units)
3-Piece Beer
and Soft Drink
Waterborne
Or
Other Low
Solvent
Coatings
350
Thermal
Incineration
With Primary
Heat Recovery
50
Low Solvent
Coatings
Except
End Sealant
Which Is
Incinerated
100
0
100
Less American Can
Co. Memphis plant
being shut down
for economic
reasons
3-Piece Food 50 50
and Other Cans
SUBTOTAL 400 100
TOTAL RACT
EXHIBIT 3-15 (1)
U.S. Environmental Protection Agency
COST OF COMPLIANCE TO RACT FOR THE
CAN MANUFACTURING INDUSTRY IN TENNESSEE
Capital Investment
($ thousand)
Total
500
Waterborne
Or
Other Low
Solvent
Coatings
120
Thermal
Incineration
With Primary
Heat Recovery
30
Low Solvent
Coatings
Except
End Sealant
Which Is
Incinerated
40
Total
190
100
20
40
60
600
140
70
40
250
125
125
-------
Can Type
Annual Compliance Cost
(? thousand)
Waterborne
Or
Other Low
Solvent
Coatings
Thermal
Incineration
With Primary
Heat Recovery
Low Solvent
Coatings
Except
End Sealant
Which Is
Incinerated
Total
3-Piece Beer
and Soft Drink
30
29
20
79
3-Piece Food
and Other Cans
SUBTOTAL
Less Memphis Plant
TOTAL HACT
35
10
39
20
15^
94
40
44
a. Not applicable
Source: Booz, Allen & Hamilton Inc.
EXHIBIT 3-15 (2)
U.S. Environmental Protection Agency
Emission Reduction
(tons)
Waterborne
Or
Other Low
Solvent
Coatings
Thermal
Incineration
With Primary
Heat Recovery
Low Solvent
Coatings
Except
End Sealant
Which Is
Incinerated
Total
Unit
Cost Of
Emission
Reduction
(? per ton)
421
23
120
564
140
5,000
423
24
120
567
(455)
166
112
393
-------
The substantial cost of developing, testing and obtaining
FDA approval of low solvent coatings has not been included in
this evaluation, because it is outside the scope of this study
and the bulk of it will probably be incurred at the national
level. An evaluation of these costs and the degree to which they
should properly be allocated to each state must be undertaken
on a national basis.
A factor that should be taken into account is that the
analysis assumes that production lines will be converted in
proportion to the number of cans made by each production mode.
Where a single line makes several types of cans, a portion of
which can be converted to low solvent systems, the production
line might still require installation of afterburner control
under RACT requirements, though its use would only be intermit-
tent. The potential effect of this on the cost estimates is
difficult to quantify. It is discussed below.
If we assume that all sheet coating and three-piece
assembly lines were required to install incinerators, to main-
tain capability to utilize both conventional and low solvent
coatings, the projections would be changed as follows:
Capital expenditure would be increased by $125,000
or 140 percent.
Annual cost would increase by $44,000. This
represents the capital related costs only.
Emissions reduction estimates would be unchanged.
The figures presented above represent outside limits with
actual experience likely to fall somewhere between the two
figures. Since most of the can fabrication facilities in
Tennessee are dedicated to beverage cans, for which low solvent
coatings systems are likely to be developed by 1982, the effect
of this capability maintenance factor will be felt on relatively
few production lines.
3-19
-------
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 1982. This implies
that can manufacturers must have either low solvent coatings
or VOC control equipment installed and operating within the next
three years. The timing of RACT imposes several requirements
on can manufacturers including:
Obtaining development quantities of low solvent
coatings from their suppliers and having them
approved by their customers
Having coating makers obtain FDA approval where
necessary
Obtaining low solvent coatings in sufficient
quantity to meet their volume requirements
Acquiring the necessary VOC control equipment
Installing and testing incinerators or other VOC
control equipment to insure that the system
complies with RACT.
The sections which follow discuss the feasibility and the economic
implications of implementing RACT within the required timeframe.
3.5.2 Feasibility Issues
Technical and economic feasibility issues of 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, but for one notable exception, RACT can be
achieved by 1982, using low solvent coatings—primarily water-
borne. 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 2 4 hours.
3-20
-------
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 annualized 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 annualized cost to can manufacturers is
estimated to be about $44,000 (0.3 percent of the value of
shipments).
3.5.4 Ancillary Issues Relating to the Impact of RACT
This section presents two related issues that were developed
during the study.
The can manufacturers are seeking to have the guidelines
altered to encompass a plantwide emissions basis. This would
allow a credit from one operation, where emissions were reduced
to below the RACT recommended 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 proposed
regulation, if accepted, would be to further concentrate the
difficult-to-control emissions, such as ending 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 3-16, on the following page, presents a summary
of the current economic implications of implementing RACT for
can manufacturing plants in the State of Tennessee.
3-21
-------
EXHIBIT 3-16(1)
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR CAN MANUFACTURING
PLANTS IN THE STATE OF TENNESSEE
Current Situation
Number of potentially affected facilities
Indication of relative importance of indus-
trial section to state economy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred methods of VOC control
to meet RACT guidelines
Assumed method of control to meet RACT
guidelines
Discussion
There are six or seven can manufacturing
facilities; however, the largest is being
shut down for economic reasons
1977 value of shipments was $40 million to
S45 million. Industry is closely related
to state's food and beverage industries
Beer and beverage containers rapidly
changing to two-piece construction
260 tons per year excluding 455 tons at
plant being shut down
Low solvent coatings (waterborne)
75 percent of cans coatec with low solvent
coatings; 2 5 percent of coated cans re-
quiring incinerator for control
Affected Areas in Meeting RACT
Capital investment statewide (excluding
shut down facility)
Annualized cost (statewide excluding
shut down facility
Price
Energy
Productivity
Employment
Discussion
$125,000 (less than 5 percent of current
annual capital appropriations for the
industry
$44,000 (approximately 0.3 percent of the
industry's 1977 statewide value of ship-
ments, excluding the shutdown plant)
Assuming a "direct cost pass through"
less than $0.0001 can increase (based
on a can value of $0,075 per can)
Increase of 1,000 to 1,500 equivalent
barrels of oil annually for operation of
facilities that have to utilize incin-
erators
No major impact
No ma^or impact
-------
EXHIBIT 3-16(2)
U.S. Environmental Protection Agency
Affected Areas in Meeting RACT
Market structure
RACT timing requirements (198 2)
Problem area
VOC emission after RACT control
Cost effectiveness of RACT control
excluding shut down facility
Discussion
Accelerated technology conversion to
two-piece cans, further concentration
of sheet coating operations into larger
facilities
Low solvent coating volume requirements
and FDA approval may require some facili-
ties to meet the RACT requirements with
incinerations (rather than low solvent
coating technology)
Low solvent coating technology for end
sealing compound
150 tons per year (21 percent of 1977
emission level or 58 percent of emissions
from affected plants)
$390 to S400 annualized cost/annual
ton of VOC reduction.
Source: Booz, Allen & 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 at the following companies:
American Can Company, Greenwich, Connecticut
National Can Company, Chicago, Illinois
Diamond International, Dandridge, Tennessee
Stokley Van Camp, Newport, Tennessee
Ring Can Company, Oakland, Tennessee
Boise Cascade, Jackson, Tennessee
-------
4.0
-------
4.0 THE ECONOMIC IMPACT OF IMPLEMENTATION
OF RACT GUIDELINES TO THE SURFACE COATING
OF COILS IN THE STATE OF TENNESSEE
As will be shown in this chapter, there are two coil coating
operations in the state of Tennessee1 potentially affected by the
implementation of RACT standards. The economic impact, although
significant to some of the individual firms affected, is minor
relative to the overall industry capital investment and operating
cost.
This chapter is divided into four sections:
Specific methodology and quality of estimates
Applicable RACT guidelines, timing and control
technology
Coil coating operations in the state of Tennessee
Direct economic implications
1 The three urban nonattainment counties are: Davidson,
Hamilton and Shelby. In these counties all sources with
potential emissions of 25 tons or more per year are
included in the analysis. For the rest of the state, all
sources with potential emissions of 100 tons or more per
year are included in the analysis.
4-1
-------
4.1
SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining
estimates of:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Economic impacts
for the surface coating of coils in Tennessee.
An overall assessment of the quality of the estimates is
detailed in the latter part of this section.
4.1.1 Industry Statistics
Coil coating is listed under Standard Industrial Classifi-
cation (SIC) 3479. Our methodology to gather statewide statistical
data on coil coating in Tennessee was as follows:
A list of potentially affected facilities was
compiled in conjunction with state EPA authori-
ties and trade association sources.
The states EPA supplied relevant information,
such as number of coating lines, on the
operations potentially affected.
4.1.2 VOC Emissions
In the state of Tennessee, two coil coating facilities
were identified. The following sources were utilized to
identify VOC emitters in this industry category:
Tennessee EPA emission inventory
National Coil Coaters Association
Tennessee Directory of Manufacturers, 1978.
4.1.3 Processes for Controlling VOC Emissions
Processes for controlling VOC emissions for the surface
coating of coils are described in Control of Volatile Organic
Emissions from Existing Stationary Sources, Volume II;
Surface Coatings of Cans, Coils, Paper, Fabrics, Automobiles
and Light Duty Trucks, EPA-405/2-77-008, May 1977.
4-2
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4.1.4 Cost of Control of VOC Emissions for Surface
Coating of Coils
The costs of control of volatile organic emissions for
surface coating of coils were developed by:
Determining the alternative types of control
systems likely to be used
Estimating the probable use of each type of control
system
Defining system components
Defining a model plant
Applying the costs developed by Springborn
Laboratories (under EPA contract number 68-02-2075,
August 23, 1977) to the most likely alternative
types of control:
- 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.
4.1.5 Economic Impacts
The economic impacts were determined by analyzing the
lead time requirements to implement RACT, assessing the
feasibility of instituting RACT controls in terms of capital
availability and equipment availability, comparing the direct
costs of RACT control to various state economic indicators and
assessing the secondary effects on market structure, employment
and productivity as a result of implementing RACT controls in
Tennessee.
4-3
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4.1.6
Quality of Estimates
Several sources of information were utilized in assessing
the emissions, cost and economic impact of implementing RACT
controls on the surface coating of coils in Tennessee. 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" indi-
cates hard data (data that are published for the base year),
"B" indicates data that were extrapolated from hard data and
"C" indicates data that were not available in secondary literature
and were estimated based on interviews, analysis of previous
studies and best engineering judgment. Exhibit 4-1, on the
following page, rates each study output listed and the overall
quality of the data.
4-4
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EXHIBIT 4-1
U.S. Environmental Protection Agency
SURFACE COATING OF COILS
DATA QUALITY
B C
A Extrapolated Estimated
Study Outputs Hard Data Data Data
Industry statistics X
Emissions X
Cost of emissions control X
Economic impact X
Overall quality of data X
Source: Booz, Allen & Hamilton Inc.
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4.2 APPLICABLE RACT STANDARDS, TIMING AND CONTROL
TECHNOLOGY
This section includes a review of:
Applicable RACT standards
RACT timing
The technology of coil coating
Commercial aspects of the business
Approved control technologies
Estimated capital and operating costs to control
VOC emissions.
4.2.1 Approved RACT Standards
As indicated in the EPA guidelines Article XX.9204, subpart
(d) (1):
...no owner or operator of a coil coating line...,
may cause, allow or permit discharge into the
atmosphere of any volatile organic compounds in
excess of 0.31 kilograms per liter of coating
(2.6 pounds per gallon), excluding water,
delivered to the coating applicator from prime
and topcoat or single coat operations.
Thus, of the approximately 4 to 6 pounds of VOC contained
in a gallon of paint to be applied with conventional coil
coating techniques, the operator must not allow emission of
more than 2.6 pounds. The reduction in emissions may be
achieved by utilization of low solvent content coating
technology, thermal incineration or other approved methods.
4.2.2 RACT Timing
There are three RACT final compliance schedules for
Tennessee. They are as follows:
Low solvent coating implementation by September 1,
1981
Equipment modification implementation by
November 1, 1981
Add-on control system implementation by
November 1, 1981.
4-5
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4.2.3 The Technology of Coil Coating
Coil coating is the coating of any flat metal (aluminum
or steel typically) sheet or strip that comes in rolls or coils.
This process consists of taking the coil through a series of
steps in one continuous process. Generally, these steps include:1
Cleaning—removal of mill-applied protective oils,
dirt, rust and scale
Rinsing—removal of the products of the cleaning
process
Pretreating—with chemicals such as iron and zinc
phosphates, chromates and complex oxides to prepare
the metal for coatings
Rinsing—after the pretreatment
Painting—commonly by application of primer and
finish coats with a "reverse" roller technique in
which the roll applying the coating turns in the
opposite direction of the metal being coated
Curing—all coatings are cured in seconds as they
pass through ovens, mostly of the convection or
hot air type. At the end of the curing operation,
the coated metal is recoiled for shipment.
Configurations of coil coating lines differ. On some
lines, the metal is uncoiled at one end of the line and recoiled
at the opposite end. On other lines, called "wrap around"
lines, the metal is uncoiled and recoiled at about the same
point on the line. Some coil coating lines have a single coater
and one curing or baking oven; others, called "tandem" lines,
have several successive coaters each followed by an oven, so that
several different coatings may be applied in a single pass.
Exhibit 4-2, on the following page, is a schematic of a "tandem"
coil coating line.
National Coil Coaters Association brochure
4-6
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EXHIBIT 4-2
U.S. Environmental Protection Agency
DIAGRAM OF A COIL COATING LINE
urce: Control of Volatile Organic Emissions from Existing Stationary Sources-Volume II; Surface
Coatings of Cans, Coils, Paper, Fabrics, Automobiles and Light Duty Trucks (EPA,
<105/2^77-000, May 1977).
-------
The metal on the coil coating line is moved through the
line by power-driven rollers. It is uncoiled as the process
begins and goes through a splicer, which joins one coil of metal
to the end of another coil for continuous, nonstop production.
The metal is then accumulated so that, during a splicing operation,
the accumulator rollers can descend to provide a continuous
flow of metal throughout the line. The metal is cleaned at
temperatures of 120°F to 160°F, brushed, and rinsed to remove
dirt, mill scale, grease and rust before coating begins. The
metal is then treated for corrosion protection and for proper
coating adhesion with various pretreatments, depending on the
type of metal being coated and the type of coatings applied.
The first coat or primecoat may be applied on one or both
sides of the metal by a set of three or more power-driven rollers.
The pick-up roll, partially immersed in the coating, transfers
the coating to the applicator roll. The metal is coated as
it passes between the applicator roll and the large back-up
roll. The metal is typically reverse roll coated. Exhibit 4-3,
on the following page, is a schematic of a typical roll coater.
A third roll, called a "doctor" roll, may be used to control
film thickness when applying a high viscosity coating, by making
contact with the pick-up roll.
The applied coating is usually dried or baked in a
continuous, catenary or flotation or a double-pass oven that
is multizone and high production. The temperatures of the
preheat, drying or baking zones may range from 100°F to
1000°F depending on the type and film thickness of coating
used and the type of metal being coated. The flow rates of
the ovens' exhausts may vary from approximately 4,000 scfm
to 26,000 scfm. Many of these ovens are designed for
operation at 25 percent of the room-temperature lower explosive
level when coating at rated solvent input. As the metal
exits the oven, it is cooled in a quench chamber by either a
spray of water or a blast of air followed by water cooling.
A second coat or topcoat may be applied and cured in a
manner similar to the primecoat. The topcoat oven, however,
is usually longer than the primecoat oven and contains more
zones.
4-7
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EXHIBIT 4-3
U.S. Environmental Protection Aci
TYPICAL ?ZVZ?.SE ROLL COATEP
INTO OVEN
Source: Control of Volatile Orcanic Emissions from Existing Stationary
Sources-Volume II; Surface Coatings of Cans, Coils, Paper,
Fabrics, Automobiles and Light Duty Trucks (E?A, 4 05/2-7 7-00 8,
•May 19 TTY~.
-------
Another method of applying a primecoat on aluminum coils
or a single coat on steel coils is to electrodeposit a water-
borne coating to either one or both sides of the coil. The
coil enters a V-shaped electrocoating bath that contains a roll
on the bottom. As the metal goes around the roll, electrodes on
each side can be activated and permit the coagulation of the paint
particles on either one or both surfaces of the coil. The coated
coil is then rinsed and wiped by squeeges to remove the water and
excess paint particles. For steel coils, the electrodeposited
coating must be baked in an oven. For aluminum coils, however,
the primecoat is stable .enough to go over rolls immediately to
the topcoat coater without destroying the finish, and then be
baked as a two-coat system.
After cooling, the coated metal passes through another
accumulator, is sheared at the spliced section, usually waxed
and finally recoiled. The accumulator rolls rise during the
shearing process, collecting the coated metal to ensure
continuous production.
Organic vapors are emitted in three areas of a coil
coating line: the areas where the coating is applied, the oven
and the quench area. The oven emits approximately 90 percent
of the organic vapors and a majority of the other pollutants.
Of the remaining 10 percent of hydrocarbons emitted, approxi-
mately 8 percent are emitted from the coater area and approxi-
mately 2 percent are emitted from the quench area.
4.2.4 Commercial Aspects of the Business
Coil coating was first practiced in the 1930s as a
technique to coat metal for Venetian blinds. As the tech-
nical, operating and economic advantages became apparent,
the industry experienced remarkable growth. Since 1962, for
example, estimated shipments have shown an average annual
growth rate of some 16.5 percent. By 1977, as shown in
Exhibit 4-4, on the following page, more than four million
tons of aluminum and steel were coated using this method.
In terms of dollars, the four million tons of coated
coil produced in the U.S. in 1977 represented a total product
value of some $3.5 billion. Other pertinent indicators of
the scale of this business include the following:
Approximately 13 billion square feet of coated
coil were produced.
4-8
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EXHIBIT 4-4
Environmental Protection Agency
ESTIMATED TONNAGE OF METAL COATED IN THE
U.S. IN 19 77 WITH COIL COATING TECHNIQUES
Market
Building products
Transportation
Appliances
Containers, packaging
Furniture, fixtures
and equipment
Other uses
Steel
Shipments
(tons)
1,100,000
1,400,000
140,000
80,000
110,000
220,000
Aluminum
Shipments
(tons)
610,000
100,000
25,000
200,000
15,000
50,000
3,050,000
1,000,000
Source: National Coil Coaters Association statistics.
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Organic coatings of several types currently
utilized by the coil coaters in North America
represent 19 million gallons. These, coupled
with various types of film laminates, represent
a total estimated value of $140 million in
coatings.
Chemical pretreatment for coil coaters is es-
timated at a value of $10 million.
It requires approximately 12.8 billion cubic feet
of natural gas and 4.1 million gallons of propane
to cure these coatings. To coat the equivalent
metal by "post painting" would require approxi-
mately five times this amount of energy.
Today, there are 182 coil coating lines in North
America, ranging in maximum coil width capacity
from 2 to 6 0 inches and capable of running at
maximum speed from 100 to 700 feet per minute.
If all these lines were running at full capacity,
it is estimated that they could coat more than 20
billion square feet of metal per year.
4.2.5 Approved Control Technologies
Per the Environmental Protection Agency Guidelines in
Article XX.9204, subpart (d)(2), the emission limit shall be
achieved by:
The application of low solvent content coating
technology; or
Incineration, provided that 90 percent of the
nonmethane volatile organic compounds (VOC measured
as total combustible carbon) which enter the
incinerator are oxidized to carbon dioxide and
water; or
A system demonstrated to have control efficiency
equivalent to or greater than provided under
the preceding paragraphs. . .and approved by
the Director.
4-9
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4.2.6 Estimated Capital and Operating Costs to Control VOC
Emissions
Estimates of capital and operating costs to control VOC
emissions from coil coating operations were prepared by
Springborn Laboratories, Inc., for the Environmental Protection
Agency (Contract No. 68-02-2075, August 23, 1977). These
estimates are discussed in this section.
The model chosen handles material 40 inches wide and
coats at a speed of 300 feet per minute. This yields a
yearly production of 204 million square feet when operated
for 4,000 hours per year. The material usage is 344,630
gallons of paint and 34,460 gallons of solvent per year.
Case I The base case with no controls for emissions;
shows the cost of a new line using conventional
enamel coating which does not meet RACT
Case II The use of waterborne coating materials with
no additional treatment of emissions
Case III The base case with a thermal incinerator on
each of the primecoat and topcoat ovens.
Due to the relation of the coating appli-
cator to the curing oven, the oven exhausts
are assumed to be 90 percent of total emissions.
The incinerator is figured with primary heat
exchange to minimize the fuel costs and
operates at an average 90 percent efficiency.
Emission control costs for each of the cases studied
are summarized in Exhibit 4-5, on the following page. As
indicated, additional capital costs to install emission control
systems range from $50,000 to $254,000 over the base case
capital cost depending on the alternative selected. Operating
costs range from $8,000 to $75,000 more than the base case, or
0.3 percent to 2.5 percent increased cost per unit. Costs per
ton of solvent range from $11 to $112.
4-10
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EXHIBIT 4-5
U.S. Environmental Protection Agency
SUMMARY OF EMISSION COHTIIOL COSTS
Output 204,000,000 SF/yr.
(10,950,000 aq. meters)
4,000 hours/year
Total
Inves Unent
Increase
over
Base Case
Total
Annual
Cost
1ncreaaed
Annual Cost
over
Base Case
Case
Cost/Unit
1000 SF
(1000 SH)
$
Increased
Cost Per
1000 SF
over Base
Tons
(Metric Tons)
Solvent
Emltted/Kr.
Decreased
Emlsaion
over Base
(Metric Tons)
Emi salon
Reduction
Cost/Ton
(Metric Ton)
To Humove
So 1 vent
Base Case - 3,300,000 - 2,977,400 - 14.59 - - B32.3
solvent-borne (157.05) - (755)
pr imricoat
i topcoat
II Waterborne 3,350,000 50,000 2,905,800 8,400 14.64 0.05 0.3 90.9 733.4 98 11.45
pnmocoat (1 57.50) (09. 9) (665. 1) ( 1 2.63)
I topcoat
674.2 81 111.93
(61 1 . 5) (1 23 .40)
erators on
ovensj primary
(icat recovery
111 nasi? Case with 3, 554,260 254 , 260 3,052,060 75, 460 14 . 96 0.37 2 .5 158.1
thermal incln- (161.03) (143.5)
Source: Springborn Laboratories, Air Pollution Control Engineering and Cost Study, op. cit.
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4.3 COIL COATING OPERATIONS IN THE STATE OF TENNESSEE
From information provided by Tennessee EPA, it was
determined that there are two coil coating facilities in the
state of Tennessee. Details pertinent to these operations
are shown in Exhibit 4-6, on the following page.
Tennessee EPA reports that each coil coating facility
has one operating line and that Alcoa intends to use low
solvent technology to meet the RACT guideline requirements.
Conalco has indicated it will implement thermal incineration
to meet the RACT guideline requirements.
4-11
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EXHIBIT 4-6
U.S. Environmental Protection Agency
COIL COATING OPERATIONS IN TENNESSEE
Company
Location
No. of Current Hydrocarbon Control Efficacy
Lines Emissions With RACT
(Tons/Yr.)
(percent)
Potential Emission
Reduction With RACT
(Tons/Yr.)
Alcoa
Consolidated
Aluminum Corp.
Alcoa, Tennessee 1
Jackson, Tennessee 1
599
396
80
80
479
317
TOTAL
995
796
Source: Tennessee EPA and Booz, Allen & Hamilton Inc.
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4.4 DIRECT ECONOMIC IMPLICATIONS
As was shown in Exhibit 4-6, two coil coating firms in
Tennessee (with two coating lines) are subject to the RACT
standards. One coil coating operation is expected to sub-
stitute low solvent coatings to meet the RACT limitations
while the other is expected to use incineration. Based on
the model plant costs (assumption that no major changes in
existing process equipment would be required). the capital
cost is estimated at $300,000, and annualized cost is
estimated at $84,000 per year. Most of this cost is for the
facility which is planning to install incineration for the
control of VOC emissions.
******
Exhibit 4-7, on the following page, summarizes the
findings presented in this chapter.
4-12
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EXHIBIT 4-7
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR COIL COATING FACILITIES IN
THE STATE OF TENNESSEE
Current Situation
Number of potentially affected facilities
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC control
to meet RACT guidelines
Assumes method of control to most RACT
guidelines
Discussion
There are two coil coating facilities with
two lines potentially affected by the coil
coating RACT guideline in Tennessee
Due to the pressures of energy availability
as well as environmental protection, most
firms have or are installing regenerative
type incinerators
Approximately 1,000 tons per year
Regenerative thermal incineration
Regenerative thermal incineration and low
solvent coatings
Affected Areas in Meeting RACT
Capital Investment (statewide)
Annualized Cost (statewide)
Energy
Productivity
Employment
Market structure
RACT timing requirements
Problem area
VOC emission after control
Cost effectiveness of control
Discussion
$0.3 million incremental capital required by
two firms based on model plant costs
$84,000
Small increased fuel consumption for regenerative
incineration
No major impact
No major impact
Some captive coil coating operations not meeting
the RACT limitation may opt to purchase coated
material in lieu of investing significant
capital requirements
There may be delivery and installation problems
if major coating industry sectors who require
incinerators, order and install similar equip-
ment in the same time frame
Low solvent coating technology is currently
inadequate to meet product requirements in all
applications
Approximately 200 tons per year (20 percent
of 1975 VOC emission level)
$84 annualized cost/annual ton of VOC
reduction.
Source: Booz, Allen & Hamilton Inc.
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BIBLIOGRAPHY
Springborn Laboratories, Inc., Air Pollution Control
Engineering and Cost Study of General Surface Coating
Industry, Second Interim Report. EPA Contract No.
68-02-2075, August 23, 1977.
U.S. Environmental Protection Agency, Control of
Voltatile Organic Emissions from Existing Stationary
Sources, Volume II. Surface Coating of Cans, Coils,
Paper, Fabrics, Automobiles and Light Duty Trucks
Private conversations with:
National Coil Coaters Association
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5.0 THE ECONOMIC IMPACT OF IMPLEMENT-
ING RACT FOR PLANTS SURFACE COATING
PAPER IN THE STATE OF TENNESSEE
-------
5.0 THE ECONOMIC IMPACT OF IMPLEMENT-
ING RACT FOR PLANTS SURFACE COATING
PAPER IN THE STATE OF TENNESSEE
This chapter presents a detailed analysis of the
impact of implementing RACT for plants in the State of
Tennessee which are engaged in the surface coating of
paper. This is meant to include protective or decorative
coatings put on paper, pressure-sensitive tapes regardless
of substrate, related web coating processes on plastic
film and decorative coatings on metal foil, but does not
include conventional printing processes which apply inks.
The chapter is divided into five sections:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Cost and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic impacts.
Each section presents detailed data and findings
based on analyses of the RACT guidelines; previous studies
of paper coating; interviews with paper coaters, coating
equipment and materials manufacturers; and a review of
pertinent published literature.
5-1
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5.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Cost of controlling VOC emissions
Economic impacts
for plants engaged in the surface coating of paper. The
quality of these estimates is discussed in the last part
of this section.
5.1.1 Industry Statistics
Paper coating is practiced in a number of industries.
Among products that are coated using organic solvents
are: adhesive tapes; adhesive labels; decorated, coated
and glazed paper; book covers; office copier paper;
carbon paper; typewriter ribbons; photographic film;
paper cartons; and paper drums. The firms coating paper
are classified in a number of groupings in the U.S.
Department of Commerce's Standard Industrial Classifi-
cation system. The major coaters may be found in the
following 16 SIC groups:
SIC Description
2611 Pulp mills
2621 Paper mills, except building paper mills
2631 Paperboard mills
2641 Paper coating and glazing
2643 Bags, except textile bags
2645 Diecut paper and paperboard and cardboard
2649 Paper converting, n.e.c.
2651 Folding paperboard boxes
3291 Abrasive products
3292 Asbestos products
3293 Gaskets, packing and sealing devices
3497 Metal foil and leaf
3679 Electronic components, n.e.c.
3842 Orthopedic, prosthetic and surgical
appliances and supplies
3861 Photographic equipment and supplies
3955 Carbon paper and inked ribbons
5-2
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This list does not include plants listed in the SIC
category 2700 (Printing, Publishing and Allied Industries),
where paper coating other than printing may also be a
part of the overall processing of the printed product.
Statistics concerning these industries were obtained
from a number of sources. All data where possible were
converted to the base year 1977 for the state using
scaling factors developed from U.S. Department of Commerce
data as presented in County Business Patterns. The
primary sources of economic data were the 1972 Census of
Manufactures and 1976 Annual Survey of Manufactures.
The list of firms likely to be affected by the
proposed regulation was compiled from data provided by
the Tennessee Division of Air Pollution Control, the
Memphis and Shelby County Health Department, and the
Hamilton County Air Pollution Control Bureau.
Of 17 firms identified as likely to be affected by
the proposed regulation, 10 were found to have potential
emissions1 which exceed the standards. That is, they
have potential emissions greater than 25 tons per year in
Hamilton, Shelby and Davidson Counties (urban non-attainment
counties) and greater than 100 tons per year in the rest
of the state. One firm, CPS Industries, located in
Williamson County, had potential emissions over 100 tons
per year, but it was excluded from the list of affected
firms because it performs printing on paper and dip
coating of industrial tape, both of which processes are
not covered by the proposed regulation.
5.1.2 VOC Emissions
The VOC emissions data for the affected firms were
provided by Tennessee Division of Air Pollution Control
and the three local air pollution control agencies mentioned
in the preceding section.
5.1.3 Processes for Controlling VOC Emissions
Processes for controlling VOC emissions from sources
included in the paper coating category are described in
Control of Volatile Organic Emissions From Existing
Stationary Sources, Volume II (EPA-450/2-77-008). The
feasibility of applying the various control methods to
paper coating discussed in this document was reviewed
Potential emissions are those from a plant operated at rated
capacity for 24 hours per day 365 days a year.
5-3
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with coating firms, coating suppliers, coating equipment
manufacturers and industry associations. These methods
include both coating reformulation and the use of control
devices, such as incinerators and carbon adsorbers.
Because of the wide variety of coating processes and
coating materials in use, most methods of control will
find some applicability. The situations where emissions
are likely to be controlled by reformulation and by
control devices were estimated based on a review of the
literature and on information obtained from interviews
with several of the Tennessee coaters.
5.1.4 Cost of Control and Estimated Reduction of VOC
Emissions
The overall costs of control of VOC emissions in
accord with the proposed regulations were determined
from:
Generalized cost formulae based on estimated
emissions and judgment as to the type of control
to be used
A development of capital, operating and energy
requirements for the facilities that will be
affected, based on the generalized cost correlations
Aggregation of the findings for each plant
affected.
The generalized cost correlations used are to be found
in:
Control of Volatile Organic Emissions From
Stationary Sources, Volume I (EPA-450/2-76-028)
Air Pollution Control Engineering and Cost
Study of General Surface Coating Industry, Second
Interim Report, Sprmgborn Laboratories.
Additional cost data were supplied by equipment and
material suppliers and published literature sources.
Major coaters in other states have been consulted to
determine industry views on acceptable control methods
and, in some cases, to confirm the cost estimating formulae.
5-4
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5.1.5 Economic Impacts
The projected effect of RACT implementation on price
is based on an indicator which is the incremental cost
related to the total sales or cost of the product within
the state. The procedure is described below:
Relate incremental costs to total statewide
figures
Also relate incremental costs to the part of
the statewide production that is affected by
the regulation (firms not now meeting RACT)
Where data is available, show the range of
ratios for individual locations
Where the industry has been segmented, show the
range of cost ratios for applicable industry
segments.
The cost per unit of production is an indicator of
potential price effect rather than a prediction of the
price effect to be expected.
The economic impacts were determined by analyzing
the lead time requirements to implement RACT, assessing
the feasibility of instituting RACT controls in terms of
capital and equipment availability, comparing the direct
costs of RACT control to various state economic indicators
and assessing the secondary effects on market structure,
employment and productivity as a result of implementing
RACT controls in the state.
5.1.6 Quality of Estimates
Several sources of information were utilized in as-
sessing the emissions, cost and economic impact of imple-
menting RACT controls on the surface coating of paper in
Tennessee. 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 "C11 indicates
data that were not available in secondary literature and
were estimated based on interviews, analysis of previous
studies and best engineering judgment. Exhibit 5-1, on the
following page, rates each study output listed and the overall
quality of the data.
5-5
-------
EXHIBIT 5-1
U.S. Environmental Protection Agency
DATA QUALITY--SURFACE COATING OF PAPER
B C
A Extrapolated Estimated
Study Outputs Hard Data Data Data
Industry statistics X
Emissions X
Cost of emissions control X
Economic impact X
Overall quality of data X
Source: Booz, Allen & Hamilton Inc.
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5.2
INDUSTRY STATISTICS
Industry characteristics, statistics and trends for
paper coating in Tennessee are presented in this section.
This information forms the basis for assessing the total
impact of implementing RACT for control of VOC emissions
in the state and for the effect upon individual firms.
5.2.1 Size of the Industry
The 1978 Tennessee Directory of Manufacturers reports
a total of 121 firms in 16 SIC categories m Tennessee
where paper coating, as defined in proposed RACT guidelines,
is the main business of the firm or may be a part of its
manufacturing activity. The number of firms and other
relevant statistics in each SIC grouping are summarized
in Exhibit 5-2.
Total value of shipments for these firms is estimated
to be about $1.09 billion, with a total of about 15,300
employees. New capital expenditures are estimated to be
about $83 million annually, based on the most recent
(1976) Annual Survey of Manufactures.
Of the total 121 firms, 10 have been identified as
actual paper coaters with potential emissions exceeding
RACT standards. (These are listed in Exhibit 5-5 in
Section 5.3.5). Of the ten firms one is in the process
of converting its operation entirely to waterbased coating
materials leaving nine firms directly impacted by the
proposed regulation. The total annual value of shipments
of the nine firms is estimated at $443 million based on
an average of $70,000 of shipments per employee which is
characteristic of firms in SIC 2641, paper coating.
5.2.2. Comparison of the Industry to the State Economy
A comparison of the value of shipments of the 121
plants in the 16 SIC categories listed in Section 5.1.1
with the total state manufacturing economy ($21.8 billion)
indicates that these plants represent about 20 percent of
the total value of manufacturing shipments in Tennessee.
These 121 firms employ about 3.4 percent of the 452,000
manufacturing employees in the state. The nine affected
firms' operations represent 2.0 percent of the total
value of manufacturing shipments in Tennessee and employ
about 1.4 percent of all manufacturing employees.
5-6
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Because several of the firms manufacture other goods
in addition to coated paper, the figures cited above
probably represent an upper limit on the value of shipment
of coated paper products in the state.
5.2.3 Historical and Future Patterns of the Industry
The nationwide value of shipments in the industries
expected to be affected by the proposed paper coating
regulations, in general, exceed the growth rate of the
economy. As summarized in Exhibit 5-3, the value of
shipments increased in every category between 1972 and
1976, with an average annual growth rate of about 12.1
percent over the period. Compared to an average infla-
tionary rate of 6 to 8 percent, this is equivalent to a
real growth rate of 4 to 6 percent. In some individual
categories, growth rates were even greater. Paper pro-
duction increased by an uncorrected average annual growth
rate of 16.5 percent; metal and foil by 16 percent; paper
coating and glazing by about 12 percent, only slightly
less than the average. It is expected that the growth
rate will continue at these rates for the near future.
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5.3
TECHNICAL SITUATION IN THE INDUSTRY
This section briefly describes the general process
and materials used in the surface coating of paper and
similar products proposed to be included under the RACT
Surface Coating of Paper regulations. The technology is
fully described in the RACT documents.1 The products
include a myriad of consumer and industry oriented
items, such as pressure-sensitive tapes, adhesive labels,
book covers, milk cartons, flexible packaging materials
and photographic film. Although many of these products
are also printed in one manner or another, the emissions
from printing inks are not included in the RACT regulations
pertaining to paper coating; only the emissions specifically
issuing from the coating operation are included. An
estimate of these emissions for the state is also presented
in this section.
5.3.1 General Coating Process Description
In organic solvent paper coating, resins are dissolved
in an organic solvent mixture and this solution is
applied to a web (continuous roll) of paper. As the
coated web is dried, the solvent evaporates and the
coating cures.
Most organic solventborne coating is done by paper
converting companies that buy paper from the mills and
apply coatings to produce a final product. The paper
mills themselves sometimes apply coatings, but these are
usually waterborne coatings consisting of a pigment
(such as clay) and a binder (such as starch or casein).
However, much additional coating is done by firms only
as part of the manufacturing process.
Solvent emissions from an individual coating facility
will vary with the size and number of coating lines. A
plant may have one or as many as 20 coating lines.
Uncontrolled emissions from a single line may vary from
50 pounds per hour to 1,000 pounds per hour, depending
on the line size. The amount of solvent emitted also
depends on the number of hours the line operates each
day.
Exhibit 5-4 gives typical emission data from various
paper coating applications.
1 Control of Volatile Organic Emissions from Existing Stationary
Sources, Volume II, EPA-450/2-77-008
5-8
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5.3.2
Nature of Coating Materials Used
The formulations usually used in organic solventborne
paper coatings may be divided into the following classes:
film-forming materials, plasticizers, pigments and
solvents. Dozens of organic solvents are used. The
major ones are: toluene, xylene, methyl ethyl ketone,
isopropyl alcohol, methanol, acetone and ethanol.
Although a single solvent is frequently used, often
a solvent mixture is necessary to obtain the optimum
drying rate. Too rapid drying results in bubbles and an
"orange peel" effect in the coating; whereas, slow
drying coatings require more time in the ovens or slower
production rates. Variations in the solvent mixture
also affect the solvent qualities of the mix.
The main classes of film formers used in conventional
paper coating are cellulose derivatives and vinyl resins.
The most commonly used cellulose derivative, nitrocellulose,
has been used for paper coating decorative paper, book
covers and similar items since the 1920s. It is relatively
easy to formulate and handle, and it dries quickly, allowing
lower oven temperatures than vinyl coatings. The most
common vinyl resin is the copolymer of vinyl chloride and
vinyl acetate. These vinyl copolymers are superior to
nitrocellulose in toughness, flexibility and abrasion re-
sistance. They also show good resistance to acids, alkalies,
alcohols and greases. Vinyl coatings tend to retain solvent,
however, so that comparatively high temperatures are needed.
In general, nitrocellulose is most applicable to the dec-
orative paper field, whereas vinyl copolymers are used for
functional papers, such as some packaging materials.
In the production of pressure-sensitive tapes and
labels, adhesives and silicone release agents are applied
using an organic solvent carrier. The adhesive layer is
usually natural or synthetic rubber, acrylic or silicone.
Because of their low cost, natural and synthetic rubber
compounds are the main film formers used for adhesives in
pressure-sensitive tapes and labels, although acrylic and
silicone adhesives offer performance advantages for certain
applications. In most cases, tapes and labels also involve
the use of release agents applied to a label carrier or the
backside of tape to allow release. The agents are usually
silicone compounds applied in a dilute solvent solution.
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5.3.3
Current VOC Emissions and Controls
A summary of the emissions from plants likely to be
affected by the proposed regulations for the paper coating
RACT category is presented in Exhibit 5-5. The emissions
for the plants listed are believed to represent the bulk
of paper coating emissions in the state.
Currently, Polymer Technology, Inc. is in the process
of converting its paper coating operations from solvent
based to waterbased coating. This conversion is expected
to be completed within the next two years.
Another firm, Holliston Mills, recirculates a part
of the air used in the drying oven through an open flame
heater, which is believed to oxidize some of the hydro-
carbons evaporated in the drying oven. However, the
amount of hydrocarbons oxidized is not known.
Thus, the total VOC emissions for plants likely to
be subject to control under the proposed regulations in
Tennessee are 12,036 tons per year, of which 12,008 tons
are from the nine plants that would be directly impacted
by the regulations.
5.3.4 RACT Guidelines
The RACT guidelines for control of VOC emissions
from the surface coating of paper require that emission
discharges of VOCs be limited to 2.9 pounds per gallon of
coating material delivered to the coating applicator.
The recommended methods of achieving this requirement
are:
The application of low solvent content coatings;
or
Incineration, provided that 90 percent of the
nonmethane VOCs (measured as combustible carbon)
which enter the incinerator are oxidized to
carbon dioxide and water; or
A system demonstrated to have control efficiency
equivalent to or greater than provided by
either of the above methods.
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EXHIBIT 5-5
U.S. Environmental Protection Agency
TENNESSEE ESTIMATES OF PAPER COATING EMISSIONS
AS REPORTED TO BOOZ, ALLEN & HAMILTON
Company Name
Town (County)
Bryce Corp.
Memphis (Shelby)
Cleo Wrap Corp.
Memphis (Shelby)
Dixico, Inc.
Memphis (Shelby)
W.F. Hall Printing Co.
Dresden (Weakley)
Holliston Mills, Inc.
New Canton (Hawkins)
IPC Dennison
Rogersville (Hawkins)
Kingsport Press
Kingsport (Sullivan)
Polymer Technology
Smyrna (Rutherford)
Rexham Corp.
Memphis (Shelby)
Southern Specialty Paper
Chattanooga
SIC
3079
2649
2771
2641
2721
2789
2641
2731
2782
2641
2641
2641
Employees
100
1,000
325
600
500
350
3,300
20
67
68
Actual
Emissions3
Tons per year
172
3,441
1,873
63
4,5661
999
46
28
374
474
Potential
Emissions
Tons per year
241
4,880
2,622
110
201
148
1,991
Totals
6,330
12,036
10,193
a For the year 1977.
b The emissions for fabric coating are included in the figures shown,
c Not reported.
Source: Booz, Allen and Hamilton, and Tennessee State Emissions Inventory.
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5.3.5 Alternative Control Methods
In this section are discussed several methods of low
solvent and solventless systems, which have been demon-
strated to be applicable to some paper coating products,
and the two principal add-on systems, incineration and
carbon adsorption, generally used for emission control.
This information has been extracted principally from the
previously cited EPA report, Control of Volatile Organic
Emissions from Existing Stationary Sources, Volume II
(EPA-450/2-77-008), which should be consulted for a more
thorough discussion. In some instances, additional
information was obtained from coaters, coating material
suppliers and control equipment manufacturers.
5.3.5.1 Low Solvent and Solventless Coatings
In Exhibit 5-6, on the following page, are listed
several types of coating materials which have found
utility in paper coating, and an estimate of expected
solvent reduction. These are briefly discussed in the
following paragraphs.
Waterborne coatings have long been used in coating
paper to improve pnntability and gloss. However, newer
coatings have been developed in which a synthetic insoluble
polymer is carried in water as a colloidal dispersion or
an emulsion. This is a two-phase system in which water
is the continuous phase and the polymer resin is the
dispersed phase. When the water is evaporated and the
coating cured, the polymer forms a film that has proper-
ties similar to those obtained from organic-solvent-based
coatings.
Plastisols are a colloidal dispersion of synthetic
resin in a plasticizer. When the plasticizer is heated,
the resin particles are solvated by the plasticizer so
that they fuse together to form a continuous film.
Plastisols usually contain little or no solvent, but
sometimes the addition of a filler or pigment will change
the viscosity so that organic solvents must be added to
obtain desirable flow characteristics. When the volatile
content of a plastisol exceeds 5 percent of the total
weight, it is referred to as an organisol. Although
organic solvents are not evaporated from plastisols, some
of the plasticizer may volatilize in the oven. This
plasticizer will condense when emitted from the exhaust
stack to form a visible emission.
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Hot melt coatings contain no solvent; the polymer
resins are applied in a molten state to the paper surfaces.
All the materials deposited on the paper remain as part
of the coating. Because the hot melt cools to a solid
coating soon after it is applied, a drying oven is not
needed to evaporate solvent or to cure the coating.
Energy that would have been used to heat an oven and to
heat makeup air to replace oven exhaust is therefore
saved. One disadvantage with hot melt coatings is that
materials that char or burn when heated cannot be applied
by hot melt. Other materials will slowly degrade when
they are held at the necessary- elevated temperatures.
A type of hot melt coating, plastic extrusion coating
is a solventless system in which a molten thermoplastic
sheet is discharged from a slotted dye onto a substrate
of paper, paperboard or synthetic material. The moving
substrate and molten plastic are combined in a nip between
a rubber roll and a chill roll. A screw-type extruder
extrudes the coating at a temperature sometimes as high
as 600°F. Low and medium density polyethylene are used
for extrusion coating more than any other types of resins.
Waterborne adhesives have the advantage that they
can be applied with conventional coating equipment.
Waterborne emulsions, which can be applied less expensively
than can solventborne rubber-based adhesives, are already
in use for pressure-sensitive labels. A problem with
waterborne adhesives is that they tend to cause the paper
substrate to curl and wrinkle.
Prepolymer adhesive coatings are applied as a liquid
composed of monomers containing no solvent. The monomers
are polymerized by either heat or radiation. These
prepolymer systems show promise, but they are presently
in a developmental stage only.
Silicone release coatings, usually solventborne, are
sometimes used for pressure-sensitive, adhesive-coated
products. Two low-solvent alternatives are currently on
the market. The first is a 100 percent nonvolatile
coating which is usually heat cured, but may be radiation
cured. The second system is a water emulsion coating
which is lower in cost than the prepolymer coating.
However, because of wrinkling and other application
problems the waterborne coating may be of limited value.
Some silicone coating materials which are under
development use single solvent systems that can be
5-12
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readily recovered by carbon adsorption. Current coatings
are troublesome since some silicone is carried into the
adsorber where it clogs the carbon pores to reduce
adsorption efficiency.
5.3.5.2 Incineration
Catalytic and direct thermal incineration processes
convert hydrocarbons to carbon dioxide and water at high
temperatures. Incineration is widely accepted as a
reliable means of reducing hydrocarbon emissions by 90
percent or more.
Generally, the major disadvantage of this approach
is the increased energy required to raise the exhaust
gas temperatures above 1,200°F for direct incineration
and 700°F for catalytic incineration. Another problem
is the generation of nitrogen oxides in direct fired
incinerators because of the exposure of air to high-
temperature flames.
The increased energy consumption can, in some
cases, be reduced or eliminated by heat exchange of the
exhaust gases with fresh emissions (primary heat recovery)
or by use of the hot incinerator exhaust gases in process
applications (secondary heat recovery). Typical use of
secondary heat recovery is for oven heat in drying or
baking ovens. In fact, with efficient primary exchange
and secondary heat recovery, total fuel consumption of
an incinerator-oven system can be less than that for the
oven before the incinerator is added. The heat required
to sustain the system comes from the combustion of the
volatile organic compounds in the exhausts.
Paper coaters who use coating machinery for a
multiplicity of processes have commented that catalytic
incineration would probably not be used because of the
possibility of catalyst poisoning. Direct incineration
would be used.
5.3.5.3 Carbon Adsorption
Carbon adsorption has been used since the 1930s for
collecting solvents emitted from paper coating operations.
Most operational systems on paper coating lines were in-
stalled because they were profitable. Pollution control
has usually been a minor concern.
5-13
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Carbon adsorption is most adaptable to single
solvent processes. Many coaters using carbon adsorption
have reformulated their coatings so that only one solvent
is required. Toluene, a widely used solvent for paper
coating, is readily captured in carbon adsorption systems.
The greatest obstacle to the economical use of
carbon adsorption is that, in some cases, reusing recovered
solvents may be difficult. In many coating formulations,
a mixture of several solvents is needed to attain the
desired solvency and evaporation rates. Also if different
coating lines within the plant use different solvents
and are all ducted to one carbon adsorption system, then
there may be difficulty reusing the collected solvent
mixture. In some cases, such as in the preparation of
photographic films or thermographic recording paper,
extremely high purity solvents are necessary to maintain
product performance and even distillation may be insuffi-
cient to produce the quality of recovered solvent needed.
For most other coating formulations, distillation is
adequate.
Another problem with carbon adsorption is the
potential of generating explosive conditions in the
adsorber because of the localized increases in combustible
organic material concentrations. Ignition apparently
can be caused by static electricity in systems where dry
air at high flow rates is treated. Several explosions
of absorbers have been reported in paper coating and
other plants.
Also, adsorption of solvents containing water
soluble compounds (such as alcohols, ketones or esters)
can present a secondary pollution problem in the water
effluent, where steam is used for regeneration. Additional
treatment of the condensed steam with its content of
dissolved organics would be required, increasing the
complexity of the solvent recovery system and its cost.
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5.4 COST AND VOC REDUCTION BENEFIT EVALUATIONS
FOR THE MOST LIKELY RACT ALTERNATIVES
This section discusses the projected costs of control
for paper coating in the state. Where possible, the
validity of the costs were confirmed with coating firms
and equipment manufacturers.
Several coaters interviewed in Tennessee indicated
their preference for incineration to comply with the RACT
guidelines, whereas one firm has already started switching
to waterbased coatings and plans to complete the switching
within two years. The other firms interviewed had not
formulated their control plans. Though some coaters may
substitute low solvent or solventless coating for current
high solvent systems, no reliable information was available
to estimate the amount of such coatings that might be
used. Several coaters interviewed in other states commented
that though they had low solvent coatings under development
the coatings would not be sufficiently evaluated to meet
proposed compliance schedules. Similarly, some coaters
may use a carbon adsorption system, but no reliable
information was available to estimate such use. Therefore,
for cost estimating purposes, it has been assumed that
the nine directly impacted firms will use incineration to
comply with the proposed regulations.
5.4.1 Costs of Control
The incineration system cost estimates for Tennessee
were derived from the data from the EPA report EPA-450/
2-76-028. Several key assumptions made in deriving these
costs are discussed in this section.
First, incinerator costs are a function of equipment
size, which varies generally with air flow rate. In most
plants, it is impractical to manifold exhausts so that
all exhausts could be treated in one add-on emission
control system. It was, therefore, assumed that a separate
incinerator would be required for each coating line in
Tennessee.
Second, it was assumed that the air flow rate to the
incinerator can be reduced down to 25 percent of the
Lower Explosion Limit (LEL). Reducing the air flow rate
results in lower capital and fuel costs. This is possible
with well-designed ovens and where product characteristics
allow. However, Several paper coaters indicated that
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achieving 25 percent of LEL may not be possible with some
coating lines, particularly older ones, or with certain
types of coatings. Coating drying rate is a function of
air flow rate, temperature and vapor concentration in the
air. If air flow rates are to be reduced, drying tempera-
tures or drying times must be increased. Because of the
heat sensitivity of some coatings, temperature increases
may not be possible. Increase in drying time will neces-
sitate either longer ovens or reduced production rates.
Several coaters of heat sensitive products indicated
that, to achieve special characteristics, they could not
increase emission concentrations above 5 to 6 percent of
LEL and could not use oven temperatures above 140°F.
Plants manufacturing conventional coated products, however,
can decrease air flow rates sufficiently to increase VOC
concentrations in the exhausts to 40-50 percent of LEL
with only moderate increases in temperatures or changes
in production rates. It has been assumed, for cost
estimation purposes, that a 25 percent LEL can be attained
on the average.
Third, since the number of coating lines was not
known for some of the firms in Tennessee, it was estimated
by using the data available for the remaining firms.
This was accomplished by determining the average VOC
emissions per coating line from the data available for
four firms and using this average to estimate the number
of lines for the remaining firms. The average emissions
per coating line in Tennessee (350 tons per year) compared
favorably with the average obtained for typical paper
coating firms in the U.S.
Fourth, the major problem in estimating total installed
costs of control systems is the cost of installation.
The cost estimates given in EPA-450/2-76-028 are based on
an easily retrofitted system. However, discussions with
equipment manufacturers and coaters and review of published
information indicated that the capital costs experienced
in recent retrofit situations are three to four times
higher than the EPA estimates. This issue is also addres-
sed in EPA-450/2-76-028 which indicated that actual capital
costs could be 1.5 to 3 times higher than the EPA estimates
because of various retrofit difficulties. Therefore, to
estimate the capital cost of control in Tennessee, the
cost estimates obtained from EPA-450/2-76-028 were multi-
plied by a factor of three to four to account for retrofit
difficulties.
5-16
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Finally, the cost estimates obtained from EPA-450/
2-76-028 were adjusted for inflationary increases from mid
1975, the year used in the EPA report, to mid 1977 by using
an average annual inflation rate of eight percent.
The various assumptions used in estimating the costs
for Tennessee are summarized in Exhibit 5-7 on the following
page.
5-17
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EXHIBIT 5-7
U.S. Environmental Protection Agency
SUMMARY OF ASSUMPTIONS USED IN COST ESTIMATE
Assumptions
All of the emissions are controlled by incineration with primary
heat recovery
25 percent LEL is equal to 3,000 ppm of toluene by volume.
Air flow can be reduced to reach 25 percent T.F.T.
The price of a 2,500 SCFM system is used as an average. No costs are
added for distillation or additional waste disposal.
12,008 tons of emissions are treated per year over an average operating
period of 5,840 hours per year.
Other assumptions regarding incinerator and adsorber prices, as estimated
in Control of Volatile Organic Emissions from Existing Stationary Sources,
Vol. I; Control Methods for Surface-Coating Operations, EPA-450/2-76-028,
are valid.
Source: Booz, Allen & Hamilton Inc.
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5.4.2
Estimated Statewide Costs
The estimated installed capital costs for retrofitting
incinerators at the nine directly inpacted paper coating
firms in Tennessee range from $13.7 million to $18.2
million depending upon the degree of retrofit difficulty.
The corresponding annualized costs range from $3.61
million to $4.81 million of which $3.4 million to $4.6
million are annualized capital charges. The installed
capital costs to individual coaters would vary from about
$450,000 for one coating line to about $.5 million for 10
coating lines. The corresponding annualized costs would
vary from $125,000 for one coating line to $1.25 million
for ten coating lines.
5.4.3 Estimated Emission Reduction
Assuming that 90 percent of all solvents used in
coating operations can be collected by properly designed
hoods and ovens, emissions could be reduced by about
9,726 tons per year. This is based on a 90 percent
capture and 90 percent destruction of emissions in an
incinerator or 90 percent recovery in a carbon adsorption
system (an overall reduction in emissions of 81 percent).
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5.5 DIRECT ECONOMIC IMPACTS
This section presents the direct economic implica-
tions of the RACT guidelines for surface coating of paper
on a statewide basis. The analysis includes the availability
of equipment and capital; feasibility of the control
technology; and impact on economic indicators, such as
value of shipments, unit price (assuming full cost pass-
through), and capital investment.
5.5.1 RACT Timing
Currently proposed guidelines for paper coating suggest
several compliance deadlines for alternative methods of
compliance.1 Generally, for add-on systems, they call
for installation of equipment and demonstration by mid-1980
or late 1980; for low solvent systems, by late 1980 or
mid-1981, depending upon the degree of research and
development needed. Major coaters, material suppliers
and equipment manufacturers believe these deadlines to be
unattainable.
Normally, large incinerator and carbon adsorp-
tion systems will require about a year or more
from receipt of purchase order to install and
start up the system. Engineering may require
three months or more, fabrication three to six
months and installation and startup as long as
three months.
Only a few companies manufacture incineration
systems with proven high heat recovery. The
cumulative effect of equipment requirements by
all firms in the U.S. needing control devices
could severely impede the ability of these
firms to supply equipment. In some cases, the
most efficient devices are only now undergoing
initial trials, and no production capacity has
been developed.
In general, it appears that if add-on control systems
are used, deadlines may have to be extended based on
national demand.
Regulatory Guidance for Control of Volatile Organic Compound
Emissions from 15 Source Categories, EPA-905/278001.
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5.5.2 Technical Feasibility Issues
Incineration, which is projected to be used by the
nine affected paper coating firms in Tennessee, is techni-
cally feasible, but it is not a completely satisfactory
system because it requires a large amount of fuel if a
good heat recovery cannot be accomplished. Similarly,
carbon adsorption is feasible, but it would not be satis-
factory for those coating operations that use a mixture
of solvents.
Though low solvent or solventless materials are used
in many paper coating operations at present, many types
of solvent-based systems currently have no satisfactory
replacement. In many cases, the alternative materials do
not meet the product quality standards demanded by the
coaters and their customers. Additional development is
needed and will require the combined efforts of both the
coaters (who must maintain finished product quality) and
the coating material suppliers. While the time required
to develop the low solvent materials is difficult to
estimate, it is unlikely that new coatings can be commercial-
ized by 1981. Ideally, the new coating materials should
be adaptable to existing coating equipment to minimize
additional capital investment.
5.5.3 Comparison of Direct Cost with Selected Direct
Economic Indicators
The net increase in annualized costs to coaters for
retrofitting incinerators was estimated at $3.61 million
to $4.81 million. These additional costs are projected
to represent 0.8 to 1.1 percent of the total annual value
of shipments of the nine Tennessee paper coating firms
which bear the cost of the emission control systems.
Assuming a "direct passthrough" of these costs, prices at
the nine firms can be expected to increase by 0.8 to 1.1
percent.
The above estimates of price increase are based on a
comparison of the cost of control with the total value of
shipments by the affected firms. Since only a part of
some of these firms' business represents paper coating
operations impacted by the regulations, the price increase
for the affected products would be higher. Such price
increases would make these firms less competitive with
firms not affected by similar regulations elsewhere.
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The major economic impact in terms of cost to most
individual companies will be the large capital expendi-
tures required for add-on devices, rather than increased
annual operating costs. For most companies, these costs
would exceed their current level of capital expenditures
for plant improvement and expansion. The installed
capital cost for one large paper goater in Tennessee, for
instance, would be about $4 million, which is substantially
higher than his normal annual capital expenditure of $200,000.
As a result of this financial burden this firm may have to
shut down its operations. Similar financial difficulties are
foreseen for marginally profitable firms which have limited
capital access or for which the added annual costs of com-
pliance are prohibitive.
5.5.4 Selected Secondary Economic Impacts
This section discusses the secondary impact of
implementing RACT on employment and productivity.
The nine affected paper coating firms employ 1.4
percent of all manufacturing employees in the state.
Present indication from the industry is that some of
these plants may shut down because of the financial
difficulties posed by the implementation of RACT, thus
moderately reducing the manufacturing employment in the
state.
Market structure is likely to be affected by the
closure of firms with limited capital access, with their
sales being absorbed by larger firms.
No significant effect on overall productivity is
foreseen, except for a small change resulting from the
need for add-on control system operating and maintenance
personnel. This may be compensated for by small increases
in productivity in firms that gain business from those
who close rather than meet the RACT requirements.
5.5.5 Impact of Compliance Upon Energy Consumption
Based on the assumption that 12,008 tons per year of
affected emissions would be controlled by installation of
direct fire incinerators with primary heat recovery (at
35 percent efficiency), energy consumption is expected to
increase by an amount equal to approximately 68,000
barrels of oil annually. This is equivalent to approxi-
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mately 408 million cubic feet of natural gas annually.
This increased requirement is considered to be negligible
compared to current state consumption.
* * * *
Exhibit 5-8 summarizes the conclusions reached in
this study and the implications of the estimated costs of
compliance for paper coaters.
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EXHIBIT 5-8 (1J -
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR PAPER COATERS IN
THE STATE OF TENNESSEE
Current Situation
Number of potentially affected facilities
Indication of relative importance of the
industrial sector to the state economy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC control
to meet RACT guidelines
Assumed method of control to meet RACT
guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Discussion
Nine plants in the state are expected
to be affected by these regulations.
However, if this category were to be
interpreted to include all types of paper
coating, including publishing, far more
firms would be affected.
The 1977 value of shipments of these nine
plants is estimated to be about $443
million. They are estimated to employ
6310 people.
Gravure coating replacing older systems.
Approximately 12,008 tons per year were
identified from nine plants affected. All
of these are applicable under RACT.
Though low solvent use is increasing,
progress is slow. Add-on control systems
will probably be used.
Thermal incineration with primary heat
recovery.
Discussion
Estimated to be $13.7 million to $18.2 millii
depending on retrofit situations. This is
likely to be more than 100 percent of normal
expenditures for the affected paper coaters.
$3.6 million to $4.8 million annually.
This represents 0.8 to 1.1 percent of the
value of shipments for the nine firms
directly affected.
Assuming a "direct cost pass-through"— 0.8
to 1.1 percent at the three affected firms.
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EXHIBIT 5-8(2)
U.S. Environmental Protection Agency
Affected Areas in Meeting RACT
Energy
Productivity
Employment
Market structure
RACT timing requirements (1982)
Problem areas
VOC emissions after control
Cost effectiveness of control
Discussion
Assuming 35 percent heat recovery from
the incineration system, annual energy
requirements are expected to increase by
approximately 68,000 equivalent barrels
of oil.
No major impact.
Moderate impact.
larger firms are likely to absorb sales
of marginally profitable firms.
RACT guideline needs clear definition for
enforcement.
Equipment deliverables and installation of
incineration systems prior to 1982 are
expected to present problems. Development
of low solvent systems is likely to extend
beyond 1982.
Retrofit situations and installation costs
are highly variable.
Type and cost of control depend on par-
ticular solvent systems used and reduction
in air flow.
Approximately 2,281 tons/year (19 percent
of 1977 VOC emission level from three
affected plants).
$370 - $493 annualized cost/annual ton
of VOC reduction.
Source: Booz, Allen & Hamilton Inc.
-------
BIBHIOGRAPHY
Davidson's Textile Blue Book, 1977.
T. w., Hughes, et al., Source Assessment: Prioritization
of Air Pollution from Industrial Surface Coating Operations,
Monsanto Research Corporation, Dayton, Ohio. Prepared for
U.S. Environmental Protection Agency, Research Triangle Park,
N.C., under Contract No. 68-02-1320 (Tech. 14) Publication
No. 650/2-75-019a.
T. A. Kittleman and A. B. Akell, "The Cost of Controlling
Organic Emissions," Chemical Engineering Progress, April 1978.
Lockwoods Directory of the Paper Industry, 1977.
Springborn Laboratories, Air Pollution Control Engineering and
Cost Study of General Surface Coating Industry, Second Interim
Report. EPA Contract No. 68-0202075, August 23, 1977.
State Industrial Directories Corporation, 1978-79 Illinois
State Industrial Directory, 1978.
Thomas Register of American Manufacturers, 1978.
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Existing Stationary Sources, Volume I.
EPA-450/2-76-028, May 1977.
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Existing Stationary Sources, Volume II.
EPA-450/2-77-008, May 1977.
U.S. Environmental Protection Agency, Regulatory Guidance for
Control of Volatile Organic Compounds Emissions from 15 Categories
of Stationary Sources, EPA-905/2-78-001, April 1978.
U.S. Department of Commerce, Annual Survey of Manufactures, 1976.
U.S. Department of Commerce, County Business Patterns, 1976.
U.S. Department of Commerce, Census of Manufactures, 1972.
Private conversations with:
Polymer Technology, Smyrna, Tennessee
IPC Dennison, Rogersville, Tennessee
Kingsport Press, Kingsport, Tennessee
Southern Specialty Paper, Chattanooga, Tennessee
Holliston Mills, Inc., New Caxton, Tennessee
CPS Industries, Franklin, Tennessee
-------
THE ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR PLANTS SURFACE COATING
FABRICS IN THE STATE OF TENNESSEE
-------
6.0 THE ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR PLANTS SURFACE COATING
FABRICS IN THE STATE OF TENNESSEE
This chapter presents a detailed analysis of the
impact of implementing RACT for plants in the State of
Tennessee which are engaged in the surface coating of
fabrics and vinyls.1 This RACT category is meant to
include the roll, knife or rotogravure coating and oven
drying of textile fabrics (to impart strength, stability,
appearance or other properties), or of vinyl coated fabrics
or vinyl sheets. It includes printing on vinyl coated
fabrics or vinyl sheets to modify appearance but not printing
on textile fabrics for decorative or other purposes. It
does not, however, include the coating of fabric substrates
with vinyl plastic polymers which are usually applied as
melts or plastisols that result in only minor amounts of
emissions. The chapter is divided into six sections:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Alternative control methods
Cost and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic impacts.
Each section presents detailed data and findings
based on analyses of the RACT guidelines, previous studies
of fabric coating, interviews with fabric and vinyl
coaters, coating equipment and materials manufacturers,
add-on control equipment manufacturers, and a review of
pertinent published literature.
This analysis applies to fabric coating plants with potential
emissions over 25 tons per year in Davidson, Hamilton and Shelby
counties and over 100 tons per year in the rest of the state.
6-1
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6.1
SPECIFIC METHODOLOGY AMD QUALITY OF ESTIMATES
This section describes the methodology for determining
estimates of:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Economic impacts
for plants in the state engaged in the surface coating of
fabrics and vinyls. The quality of these estimates is
discussed in the last part of this section.
6.1.1 Industry Statistics
The coating of fabrics is used to produce a large
variety of common consumer and industrial products.
Typical products are raincoats, upholstery, wall covering,
tablecloths, window shades, gasketing, diaphragms, lifeboats
and bookcovers. In most cases the finished product is ,
manufactured by firms who purchase the coated fabric from
a manufacturer whose principal activity is fabric coating.
However, there are a number of vertically integrated
firms (the major automobile manufacturers are typical)
which both coat fabrics and manufacture finished goods
from them. Other exceptions are firms which both manu-
facture fabrics and coat them. Thus firms which coat
fabrics or vinyl coated fabrics or sheeting can be found
in a number of standard Industrial Classification categor-
ies; these are listed below:
SIC Description
2211 Broad woven fabric mills, cotton
2221 Broad woven fabric mills, man-made
and silk
2241 Narrow fabrics and other, small wares
mills
2258 Warp knit fabric mills
2261 Finishers of broad woven fabrics of
cotton
2262 Finishers of broad woven fabrics of
man-made fiber and silk
2269 Finishers of textiles, n.e.c.*
2295 Coated fabrics, not rubberized
2297 Nonwoven fabrics
3069 Fabricated rubber products, n.e.c.*
3079 Miscellaneous plastics products
3291 Abrasive products
3293 Caskets, packing, sealing devices
*not elsewhere classified
6-2
-------
General statistics concerning the firms included in
these SIC groupings were obtained from the most recent
Census of Manufactures, County Business Patterns and
other economic summaries published by the U.S. Department
of Commerce.
Data on industrywide shipments of coated fabrics
were obtained from the Textile Economics Bureau (New
York, New York). Identification of individual candidate
firms which might be affected by the proposed regulation
was made by review of industry directories:
Davidson's Textile Blue Book
Rubber Red Book
Modern Plastic Encyclopedia
Thomas Register of American Manufacturers
Tennessee Directory of Manufacturers
Membership list of the Canvas Products Association.
A list of 20 establishments expected to be affected by
the proposed fabric coating RACT regulations in the state
was prepared from secondary data sources and data supplied
by the state and local air pollution control agencies.
Approximately ten firms were interviewed by telephone and
three firms were identified which have fabric coating
operations affected by the proposed regulations. The other
firms either had potential emissions sufficiently low
not to be affected or were using exempt coating processess.
6.1.2 VOC Emissions
The state and local air pollution control agency emis-
sion inventories and information obtained during telephone
interviews with the affected firms were used as a basis
for estimation of the total VOC emissions from the fabric
coating plants identified.
6.1.3 Processes for Controlling VOC Emissions
Processes for controlling VOC emissions from fabric
coating processes are described in Control of Volatile
Organic Emissions from Existing Stationary Sources,
Volume II (EPA-450/2-77-008). The feasibility of applying
the various control methods to fabric coating discussed
in this document was reviewed with coating firms, coating
suppliers, coating equipment manufacturers and industry
associations. These methods include both coating reformula
tion and the use of control devices, such as incinerators
and carbon adsorbers.
6-3
-------
Because of the wide variety of coating processes and
coating materials in use, most methods of control will
find some applicability. The situations where emissions
are likely to be controlled by reformulation and by
control devices were estimated based on a review of the
literature and on information obtained from the interviews
described above.
6.1.4 Cost of Control and Estimated Reduction of VOC
Emissions
The overall costs of control of VOC emissions to meet
the proposed regulations were determined from:
Generalized cost formulae based on reported
emissions and judgment as to the type of control
to be used
A development of capital, operating and energy
requirements for the facilities that will be
affected, based on the generalized cost formulae
Aggregation of the findings for each plant affected.
The generalized cost formulae used are to be found in:
Control of Volatile Organic Emissions from
Stationary Sources, Volume I (EPA 450/2-76-028)
Air Pollution Control Engineering and Cost Study
of General Surface Coating Industry, Second Interim
Report, Springborn Laboratories.
Additional cost data were supplied by equipment and material
suppliers and published literature sources. Major coaters in
Tennessee, as well as in other states, were consulted to
determine industry views on acceptable control methods and,
in some cases, to confirm the cost estimating formulae.
6.1.5 Economic Impacts
The economic impacts were determined by: analyzing
the lead time requirements to implement RACT; assessing
the feasibility of instituting RACT controls in terms of
capital availability and equipment availability; comparing
the direct costs of RACT control to various state economic
indicators; and assessing the secondary effects on market
structure, employment and productivity as a result of
implementing RACT controls in the state.
6-4
-------
6.1.6
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 fabrics in the state.
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 available for the
base year), "B" indicates data that were extrapolated from
hard data and "C" indicates data that were not available in
secondary literature and were estimated based on interviews,
analysis of previous studies and best engineering judgement.
Exhibit 6-1, on the following page, rates each study output
listed and the overall quality of the data.
6-5
-------
EXHIBIT 6-1
U.S. Environmental Protection Agency
DATA QUALITY—SURFACE COATING OF FABRICS
B C
A Extrapolated Estimated
Study Outputs Hard Data Data Data
Industry statistics X
Emissions X
Cost of emissions control X
Economic impact X
Overall quality of data X
Source: Booz, Allen & Hamilton Inc.
-------
6.2 INDUSTRY STATISTICS
Industry characteristics, statistics, and trends for
fabric coating are presented in this section. This
information forms the basis for assessing the total
impact of implementing RACT for control of VOC emissions
in this category upon the state economy and upon the
individual firms concerned.
6.2.1 Size of the Industry
The Bureau of Census, in 1976 County Business Patterns,
reported a total of about 23 plants in SIC categories in
which plants coating fabrics in the non-attainment counties
in Tennessee would be expected to be tabulated. Pertinent
data concerning these plants are summarized in Exhibit 6-2,
on the following page. As mentioned earlier, based on data
provided by the state and local air pollution control agencies
and Booz, Allen interviews, only three plants were found to
be affected by the proposed regulations and are listed in
Exhibit 6-3, following Exhibit 6-2.
As shown, these three affected firms are estimated to
employ a total of about 285 people. The total annual value
of shipments of the three firms is estimated at $20.2 million
based on an average of $71,000 per employee, which is charact-
eristic of firms in SIC 2295, fabric coating.
6.2.2 Comparison of the Industry to the State Economy
A comparison of the value of shipments of these
plants with the state economy indicates that these plants
represent a small percentage of the total value of shipments
by manufacturing plants and employ about 0.6 percent of
the manufacturing workers in the state.
6.2.3 Historical and Future Patterns of the Industry
The fabric coating industry in the U.S., except for
the general economic slump in 1975, has shown a gradual
but steady growth in sales and shipments over the last
several years as demonstrated by Exhibits 6-4 and 6-5,
on the following pages. The largest growth in terms of
dollar value of shipments was for vinyl coated fabrics
6-6
-------
EXHIBIT 6-2
U.S. Environmental Protection Agency
INDUSTRY STATISTICS FOR PLANTS IN SIC CATEGORIES
WHERE FABRIC COATING MAY BE USED IN TENNESSEE
SIC Name
2211 Broad woven fabrics mills, cotton
2221 Broad woven fabric mills, man-made and silk
2241 Narrow fabrics and other, small wares mills
2258 Warp knit fabric mills
2261 Finishers of broad woven fabrics of cotton
2262 Finishers of broad woven fabrics of man-
made fiber and silk
2269 Finishers of textiles, n.e.c.
2295 Coated fabrics, not rubberized
2297 Nonwoven fabrics
3069 Fabricated rubber products, n.e.c.
3079 Miscellaneous plastics products
3291 Abrasive products
3293 Gaskets, packing, sealing devices
Number
of
Firms
15
9
6
2
10
4
5
6
1
34
130
6
4
232
a
Number
of
Employees
3,330
3,446
397
203
1,056
2,416
250
607
2
4,108
9,777
255
374
26,221
Estimated ^
Value of Shipments
($Million)
116
129
13
13
35
145
13
43
0.1
176
486
8
14
1,191
Estimated ^
New Expenditures
($Million)
3.9
5.4
0.2
0.4
1.1
5.4
0.2
0.9
6.7
23
0.5
0.5
48.2
a. Tennessee Department of Economic and Community Development, Tennessee Directory of Manufacturers, 1978.
b. Booz, Allen estimate based on average value of shipments and new expenditures per employee from 1976
Annual Survey of Manufactures, U.S. Department of Commerce, adjusted to 1977.
Source: Booz, Allen and Hamilton Inc.
-------
Firm Location
Americo Inc. Memphis
Fields Plastic & Chemicals Cleveland
Quimet Corporation Nashville
Source: Booz, Allen & Hamilton Inc.
EXHIBIT 6-3
U.S. Environmental Protection Agency
FIRMS EXPECTED TO BE AFFECTED BY
THE FABRIC COATING RACT REGULATIONS
IN TENNESSEE
Employees Activity
20 Laminating, vinyl printing
75 Laminating, vinyl printing
190
Vinyl coating and printing
-------
EXHIBIT 6-4
U.S. Environmental Protection Agency
U.S. ANNUAL VALUE OF SHIPMENTS OF COATED FABRICS
($ millions)
Item
1972
1973
1974
1975
1976
Pyroxylin-Coated Fabrics
Pyroxylin-Coated Fabrics
Vinyl Coated Fabrics
Other Coated Fabrics
Coated Fabrics, not rubberized
Rubber Coated Fabrics
876.5
26.3
601.9
154.1
26.3
67.9
693.7
27.3
693.7
188.0
27.4,
73. 6b
728.7
34.5
728.7
212.6
681.5
28.0
681.5
202.7
(1.4£a
72.0
817.4
32 .5
817.4
213.8
(33.8aa
80.0
TOTAL
876.5
1,011.9
1,156.5
985.6
1,177.5
a.Values obtained by difference from gross shipments of all coated fabrics,
not rubberized.
b.Booz, Allen estimate based on shipments of "Other Rubber Goods, N.E.C.",
SIC Code 30698
Source; 1976 Annual Survey of Manufactures
-------
EXHIBIT 6-5
U.S. Environmental Protection Agency
U.S. ANNUAL SHIPMENTS OF BACKING MATERIALS FOR
COATED FABRICS
(in millions of pounds)
1972
1973
1974
1975
1976
Transportation Fabric, all fibers3
95.4
100.9
64.6
65.3
81.5
Coated and Protective Fabrics^
133 .7
149.3
167.5
137.8
177.6
TOTAL
229.1
250.2
232 .2
203.1
259.1
Notes:
a. Transportation fabric includes auto seat upholstery and slipcovers, sidewall, headlining
and sheeting. The cotton poundage include the knit and woven fabric used as the backing
for vinyl sheeting. The item includes convertible auto tops & replacements thereof, as
well as upholstery used in other kinds of transportation, such as airplanes, railroad &
subway cars, buses, etc. It does not include seat padding, transportation rugs, window
channeling flocking, tassels, trim, etc., or the textile glass fiber used in reinforced
plastic seating for subways, buses, etc.
b. Coated and protective fabrics includes parachutes, deceleration chutes and tow targets;
awning; beach, garden & tractor umbrellas; inflatable dunnage and cushions, air-supported
structures and automotive air-spring diaphragms; boat and pool covers; tarpaulin covers
for athletic fields, etc.; also, the substrates used for vinyl sheeting. The cotton
poundage include awnings, boat covers, tarpaulins and tents. Not included here are the
cotton poundages used for vinyl substrates. Such poundages are tabulated with their
appropriate end use, i.e., transportation upholstery, upholstery etc. Does not include
man-made fiber surfaces for recreational fields.
Source: Textile Economics Bureau, Technicon, November 1977
-------
which increased by $215.5 million in shipments from 1972
to 1976, compared with an increase of $301 million for
all coated fabrics. Pyroxylin (cellulose nitrate) coatings,
because of their low cost and ease of application, still
continue to occupy a steady though proportionately smaller
share of the market. Natural and artificial rubber coated
fabrics, because of unique properties not obtainable with
plastic materials, also maintain a substantial (about 10
percent) share of the coated fabric market. Vinyl and
urethane coatings, however, are replacing a larger share
of both markets.
6-7
-------
6.3 TECHNICAL SITUATION IN THE INDUSTRY
This section describes the principal materials and
processes used in fabric and vinyl coating and various
methods which are considered to be reasonably available
control technology to meet proposed regulations. The
proposed RACT guidelines for fabric coating and an estimate
of the total VOC emission reduction possible if the
guidelines are implemented in the state are also presented.
6.3.1 General Coating Process Description
Fabrics are coated primarily to render them resistant
to penetration by various fluids or gases, improve abrasion
resistance or modify the appearance or texture. Typical
examples are materials used in shower curtains; rubber
life rafts; balloons; drapery material; synthetic leathers
for shoes, upholstery or luggage; table cloths; and out-
door clothing. The base fabrics can be asbestos fiber
cloth, burlap and pile, cotton drill, duck canvas, glass
fabrics, knit cotton or rayon, nonwoven fabrics or nylon
sheeting. In the case of coating of vinyls, the substrate
is a flexible vinyl sheet or cloth-supported vinyl on
which a coating is applied to enhance the appearance or
durability of the vinyl surface.
Typical coating materials are rubber compounds,
vinyl resins of various types, polyesters, polyurethanes,
nitrocellulose resins, oleo resins, phenolic resins,
epoxy resins and polyethylene. Various techniques are
used for applying these coatings as melts, plastisols,
latexes, solutions or other forms. The proposed guidelines
are primarily concerned with coatings applied as solutions,
where large volumes of volatile organic materials can be
emitted. Descriptions of the processes for coating with
coating materials dissolved in organic solvents may be
found in the EPA guideline series Control of Volatile
Organic Emissions from Stationary Sources Volume II;
Surface Coating of Cans, Coils, Paper, Fabrics, Automobiles
and Light Duty Trucks, EPA-450/2-77-008, May 1977.
6.3.2 Emissions and Current Controls
The reported and potential VOC emissions from the
three plants likely to be affected by RACT guidelines in
the state are summarized in Exhibit 6-6 on the following
page.
6-8
-------
EXHIBIT 6-6
U.S. Environmental Protection Agency
REPORTED AND POTENTIAL EMISSIONS
Firm
Americo, Inc^
Fields Plastics & Chemicals1
Quimet Corporation^
Location
Memphis
Cleveland
Nashville
Actual Emissions
(tons/yr)
9.0
61.5
70.0
140.5
Estimated
Potential Emissions'
(tons/yr)
39
257
306
602
a. Based on 8760 hours per year operation
b. Booz, Allen estimate based on interview with plant personnel
c. Data supplied by the state
d. Actual emissions suppled by the state, potential emissions estimated by
Booz, Allen.
Source: Booz, Allen & Hamilton Inc.
-------
The total actual VOC emissions from fabric coating
lines in these plants were 140.5 tons in 1977. No controls
are now used by these plants.
6.3.3 RACT Guidelines
The RACT guidelines for control of VOC emissions
from fabric coating require that emissions from coating
lines be limited to a level of 2.9 pounds per gallon of
coating for coating of fabric substrates and 3.8 pounds
per gallon for coating of vinyl substrates. Both limits
are based upon the use of an add-on device which recovers
or destroys 81 percent of the VOC introduced in the
coating. This the U.S. EPA considers to be achievable by
capture of 90 percent of the VOC emissions and destruction
of these emissions in an add-on device such as an incinerator.
In some cases use of alternative low solvent or solventless
coatings can also be used to meet these limits.
6-9
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6.4 ALTERNATIVE CONTROL METHODS
In this section are briefly discussed methods of low
solvent and solventless systems which have been demon-
strated to be applicable to some fabric coating products,
and the two principal add-on systems, incineration and
carbon adsorption, generally used for emission control.
This information has been extracted principally from the
previously cited EPA report, Control of Volatile Organic
Emissions from Existing Sources, Volumes I and II, which
should be consulted for a more thorough discussion. In
some instances, additional comment was obtained from
coaters, coating material suppliers and control equipment
manufacturers.
6.4.1 Low Solvent and Solventless Coatings
Organic emissions can be reduced 80 to 100 percent
through use of coatings which inherently have low levels
of organic solvents. Both high-solids and waterborne
coatings are used. The actual reduction achievable
depends on the organic solvent contents of the original
coating and the new one. Using a coating which has a low
organic solvent content may preclude the need for an
emission control device. Often the coating equipment and
procedures need not be changed when a plant converts to
coatings low in organic solvent.
Although a number of companies have converted to low
solvent coating, either in part or in total, one may not
presume them to be universally applicable. Each coating
line is somewhat unique and many coated fabrics have dif-
ferent specifications.
None of the plants identified were aware of suitable
alternative coatings currently available which would meet
the quality and performance standards required in all of
their products. Some firms in the U.S. have over the
last several years converted to waterborne coatings on
some products and believe that if sufficient time were
allowed for research and development a majority of their
coatings could be replaced by low solvent ones. There
may be some coatings which could not be replaced.
6-10
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6.4.2 Incineration
Catalytic and direct thermal incineration processes
convert hydrocarbons to carbon dioxide and water at high
temperatures. Incineration is widely accepted as a
reliable means of reducing hydrocarbon emissions by 90
percent or more.
Generally, the major disadvantage of this approach is
the increased energy required to raise the exhaust gas tem-
peratures over 1,200°F for direct incineration and 700°F
for catalytic incineration. Natural gas is the most com-
monly used fuel though propane, fuel oils, or other fluid
hydrocarbons can be employed. Fuel oil is not generally
acceptable because of the sulfur oxides generated in com-
bustion or the presence of catalyst poisons in the oil.
Another problem is the generation of nitrogen oxides in
direct fired incinerators resulting from the exposure
of air to high-temperature flames.
The increased energy consumption can, in some cases, be
reduced or eliminated by heat exchange of the exhaust gases
with fresh emissions (primary heat recovery) or by use of
the hot exhaust gases in process applications (secondary
heat recovery). Typical use of secondary heat recovery is
for oven heat in drying or curing ovens. In fact, with
efficient primary exchange and secondary heat recovery,
total fuel consumption of an incinerator-oven system can
be less than that for the oven before the incinerator is
added. The heat required to sustain the system comes from
combustion of volatile organic compounds in the exhausts.
Both catalytic and direct fired systems are capable
of high heat recovery efficiency if several conditions
occur:
VOC concentrations are or can be increased to 8-10
percent or more of their LEL (lower explosion
limit).
Oven temperatures are sufficently high to enable
use of the sensible heat in the exhaust gases
after primary heat exchange. Usually, oven temp-
eratures above 140°F are sufficient to allow 85
percent or more overall heat recovery.
Where catalytic incinerators are used, no com-
pounds must be present in the gases treated
which could poison or blind the catalyst.
6-11
-------
In most coating operations, drying and curing temper-
atures are 250°F or higher. By reduction of air flow to
reach exhaust levels of 8-10 percent or higher and proper
design of the heat recovery system, it may be possible to
achieve overall heat recoveries of 85 percent or greater.
6.4.3 Carbon Adsorption
Carbon adsorption has been used since the 1930s for
collecting solvents emitted from paper coating operations.
Most operational systems on coating lines were installed
because they were profitable. Pollution control has usually
been a minor concern. Carbon adsorption systems on coating
lines range in size from a few thousand to tens of thousands
of cubic feet per minute. Exhausts from several coating
lines are often manifolded together to permit one carbon
adsorption unit to serve several coating lines.
The greatest obstacle to the economical use of carbon
adsorption is that, in some cases, reusing solvent may be
difficult. In many coating formulations, a mixture of
several solvents is needed to attain the desired solvency
and evaporation rates. If this solvent mixture is recovered,
it sometimes cannot be reused in formulating new batches of
coatings. Also if different coating lines within the plant
use different solvents and are all ducted to one carbon
adsorption system, then there may be difficulty reusing the
collected solvent mixture. In this case, solvents must be
separated by distillation.
However, in some cases azeotropic, constant boiling,
mixtures can occur which can be separated only by specialized
techniques. Most coating firms would not have the skills
necessary for the complex distillation and separation pro-
cedures needed. For small adsorption systems, the additional
separation expenses would probably exceed the cost of fresh
solvent.
Also, adsorption of solvents containing water soluble
compounds (such as alcohols, ketones or esters) can present
a secondary pollution problem where steam is used for bed
regeneration. Additional treatment of the condensed steam
with its content of dissolved organics would be required,
increasing the complexity of the solvent recovery system
and its cost.
6-12
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6.5 COST AND VOC REDUCTION BENEFIT EVALUATIONS
FOR THE MOST LIKELY RACT ALTERNATIVES
This section discusses the projected costs of control
for fabric coating in the non-attainment areas of the state
based on the emissions as discussed in Section 6.3.4 of this
report. Where possible, the validity of the costs was con-
firmed with coating firms and equipment manufacturers.
The coaters interviewed in Tennessee indicated
incineration as the most likely control method to comply
with RACT guidelines.
6.5.1 Costs of Alternative Control Systems
Exhibit 6-7, on the following page, summarizes costs
for a typical incineration system as developed by EPA
sources. These costs are based on the assumption that
exhaust flow rates can be reduced sufficiently to obtain
LEL levels of 25 percent. This is possible with well-
designed capture systems where intake air flows can be
reduced or where product characteristics allow. Lower
LEL levels require higher air flow and thus result in
higher control costs.
Incinerator costs are a function of equipment size,
which varies generally with air flow rate. In the three
affected plants it would be practical to manifold exhausts
so that all exhausts could be treated in one add-on
emission control system. Also, it would be difficult to
use secondary heat recovery on ovens where the incinerator
is remote from the oven.
The major problem in estimating total installed
costs of control systems is the added cost of installation.
The estimates in Exhibit 6-7 were made based on commonly
experienced retrofitting difficulties and are three to
four times the EPA estimates given in EPA-450/2-76-028.
6.5.2 Estimated Statewide Costs
The total emissions considered to be applicable
under RACT, as discussed in Section 6.3.4 of this report,
are about 14Q tons per year for the three potentially
affected firms. The firms have not decided on possible
control options, but are likely to select the incinera-
tion method for compliance with the proposed regulations.
6-13
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EXHIBIT 6-7
U.S. Environmental Protection Agency
INCINERATION COSTS FOR A TYPICAL FABRIC
COATING LINE3
Incineration Device
Installed Cost
($)
Annualized Cost
($/yr.)
b c
Control Cost '
($/ton of solvents
recovered)
No heat recovery
Catalytic
Noncatalytic
(Afterburner)
315,000
298,000
88,000
92,000
890
920
Primary heat
recovery
Catalytic
Noncatalytic
402,500
385,000
102,000
100,000
1,020
1,000
a.These costs are based on an air emission flow rate of 2,000 SCFM for a 25 percent
LEL volatile organic content; oven temperature of 300°F and operating time of
2,000 hours per year. Other assumptions are as tabulated in EPA-450/2-76-028,
Table 4-3 except capital costs are multiplied by 3.5 to account for common
retrofit situations which may include modifications to improve collection
system.
b.In Tennessee plants are expected to require installation of incinerators
for air flows from 200 to 16,000 SCFM. Use of smaller sized incinerators
results in a higher $/ton control costs; larger incinerators will have a
lower $/ton control cost.
c.These control costs in terms of $/ton as presented in Control of Volatile
Organic Emissions from Existing Stationary Sources. Volume II, EPA-450/
2-77-008 are about 1/20 of these values becasue of lower capital charges
and use of the costs of a larger sized incinerator. This difference
illustrates the misleading results of applying $/ton as a parameter in
evaluating costs when different sizes of incinerators are used.
Source: Booz, Allen & Hamilton, Inc. revisions of data in EPA-450/2-76-028
-------
Total costs of compliance were therefore based on
140 tons per year of emissions being treated by incineration.
For incineration costs, the capital and annualized
costs presented in Control of Volatile Organic Emissions
from Existing Stationary Sources, Vol. I (EPA-450/2-76-028)
were used. This report projects estimated costs for the
control system as a function of total air flow rate.
The air flow rate for the affected firms was determined
on the assumption of a 25 percent approach to LEL, other
assumptions summarized in Exhibit 6-8 on the following
page, and the firm's current estimated emissions. These
air flow rates were then used to estimate costs from
EPA-450/2-76-028.
By applying these cost estimating procedures, capital
costs for incineration were estimated to be $316,000 with
annualized costs of $91,000, of which $79,000 is capital
charges. Both are adjusted for inflationary increases
from mid-1975 (base period for EPA-450/2-76-028 data) to
mid-1977 by using an average inflation rate of 8 percent
per year.
However, discussions with equipment manufacturers
and coaters and review of published information indicated
that these capital costs estimates are probably three to
four times lower than those experienced in recent retrofit
situations. This issue is also addressed in EPA-450/2-76-028
which indicated that baseline capital costs estimates
could be 1.5 to 3 times lower than actual costs because
of various retrofit difficulties.
Therefore, using multipliers of three and four it is
estimated that actual capital costs in the state are more
likely to range from $0.95 million to $1.3 million with
corresponding annualized costs of $249,000 to $328,000.
The capital costs for individual firms are estimated
to vary from $290,000 to $330,000 for a multiplier of 3
and from $380,000 to $450,000 for a multiplier of 4. The
corresponding annualized costs would vary from $75,000 to
$88,000 for the multiplier of 3 and from $99,000 to
$115,000 for the multiplier of 4.
6-14
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EXHIBIT 6-8
U.S. Environmental Protection Agency
SUMMARY OF ASSUMPTIONS USED IN COST ESTIMATE
Assumptions
90 percent of emissions are controlled by incineration with primary heat
recovery; 90 percent of solvent emissions from the coating line are
collected. Total reduction is 81 percent.
Air flow can be reduced to reach 25 percent LEL
Emission rate is constant over a period of 5,840 hours per year.
Other assumptions regarding incinerator prices and operating parameters,as estimated
in Control of Volatile Organic Emissions from Existing Stationary Sources, Vol. I:
Control Methods for Surface-Coating Operations, EPA-450/2-76-028, are valid.
Source: Booz, Allen & Hamilton Inc.
-------
6.5.3
Estimated Emission Reduction
Assuming that 90 percent of all solvents used in
coating operations can be collected by properly designed
hoods and ovens, emissions could be reduced by about 114
tons per year. This is based on a 90 percent reduction
of emissions in an incinerator (an overall reduction in
emissions of 81 percent). This reducton represents 81
percent of those emissions affected by RACT (emissions
from the three affected firms).
6-15
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6.6 DIRECT ECONOMIC IMPACTS
This section presents the direct economic implica-
tions of the RACT guidelines for surface coating of
fabrics on a statewide basis. The analysis includes the
availability of equipment and capital; feasibility of the
control technology; impact on economic indicators, such
as value of shipments, unit price (assuming full cost
pass-through), state economic variables and capital
investment; and impact on energy consumption.
6.6.1 RACT Timing
Currently proposed regulations for fabric coating in
Tennessee suggest three sets of compliance deadlines for
alternative methods of compliance.1 For add-on
systems, they call for installation of equipment and
demonstration by November 1, 1981 and for low solvent systems,
by September 1, 1981. Major coaters, material suppliers
and equipment manufacturers believe these deadlines to
be unattainable.
Normally, large incinerator and carbon adsorp-
tion systems will require about a year or more
from receipt of purchase order to install and
start up the system. Engineering may require
three months or more, fabrication three to six
months and installation and startup as long as
three months. A major web coater with consider-
able experience with similar installations
estimates that the complete cycle of installation,
from initial selection of control method to
testing of the system, would require 37 months
plus an initial 13 months to establish an
economically sound method of control.
Only a small number of companies manufacture
incineration systems with proven high heat
recovery. The cumulative effect of equipment
requirements of all firms in the U.S. needing
control devices could severely impede the
ability of these firms to supply equipment. In
some cases, the most efficient devices are only
now undergoing initial trials, and no production
capacity has been developed.
6-16
-------
A major coating firm estimates that the use of
low solvent or solventless coatings may take as
long as 68 months from initial research, through
product evaluation and customer acceptance to
final production. Product and process development
alone may take as long as 24 months and product
evaluation over 14 months.
In general, it appears that if either add-on control
systems are used or new low solvent systems need to be
developed, deadlines may need to be extended.
6.6.2 Technical Feasibility Issues
Although incineration was identified as the most
likely control alternative in Tennessee, as discussed
above, incineration is not a completely satisfactory
add-on control system. Incineration requires large
volumes of additional fuel if good heat recovery is not
achieved.
6.6.3 Comparison of Costs with Selected Economic
Indicators
The net increase in annualized operating costs to
coaters to install and operate incinerators was estimated
at $249,000 to $328,000. These additional costs are
projected to represent 1.2 percent to 1.6 percent of the
total annual value of shipments of the firms affected by
the proposed regulations. Assuming a "direct passthrough"
of these costs, prices can be expected to increase by
about the same fraction.
The major economic impact in terms of cost to indivi-
dual companies will probably be capital related rather
than due to increased annual operating costs. The projec-
ted capital expenditure of $300,000 to $450,000 is several
times the normal annual capital expenditure of the affected
firms and may severely affect the smaller firms.
6-17
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6.6.4 Selected Secondary Economic Impacts
This section discusses the secondary impact of
implementing RACT on employment, market structure and
productivity.
Total employment in the state is not expected to be
significantly affected since only about 300 workers are
employed in coating operations in the plants that may be
affected by the regulation.
Market structure is not expected to be affected by
the proposed regulations. Productivity is not expected
to be affected except for a short period when lines must
be shut down for modifications or installation of equipment.
6.6.5 Impact of Compliance Upon Energy Consumpton
Based on the assumption that the affected emissions
would be controlled by installation of direct fired
incinerators with primary heat recovery only (at 35
percent efficiency), energy consumption is expected to
increase by an amount equal to about 970 barrels of oil
annually. The estimate is based further on the assumption
that oven exhausts are about 300°F, and that a barrel of
oil is equivalent to 6.0 x 10 BTTJs. This increased
requirement is considered to be negligible compared to
current state consumption.
* * * *
Exhibit 6-9, on the following page, summarizes the
conclusions and projected implications of the results
from this study.
6-18
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EXHIBIT 6-9(1)
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR FABRIC COATERS IN
THE STATE OF TENNESSEE
Current Situation
Number of potentially affected facilities
Indication of relative importance of
industrial sector to the state economy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC control
to meet RACT guidelines
Assumed method of VOC control to meet
RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
Discussion
Three plants in the state's non-attainment
areas are expected to be affected by these
regulations.
The 1977 value of shipments of these
plants is estimated to be about $20.2 million.
They are estimated to employ 300 people in
fabric coating operations.
Newer plants are built with integrated
coating and emission control systems;
older plants are only marginally com-
petitive now.
Current emissions are estimated at about
140 tons/year.
Not yet decided
Direct fired incineration with primary
heat recovery.
Discussion
Estimated to be $0.9 million to $1.2 million
depending on retrofit situations.
$250,000 to $330,000 annually.
Assuming a "direct cost pass-through"--
1.2 to 1.6 percent.
Assuming 35 percent heat recovery, annual
energy requirements are expected to in-
crease by approximately 970 equivalent
barrels of oil.
No major impact.
No major impact.
No major impact.
-------
EXHIBIT 6-9(2)
U.S. Environmental Protection Agency
Affected Areas in Meeting RACT
RACT timing requirements (1982)
Problem areas
VOC emissions after control
Cost effectiveness of control
Discussion
RACT guidelines need clear definition for
rule making.
Equipment deliverables and installation of
incineration systems prior to 1982 are
expected to present problems. Development
of low solvent systems is likely to extend
beyond 1982.
Retrofit situations and installation costs
are highly variable.
Type and cost of control depend on par-
ticular solvent systems used and reduction
in air flow.
Approximately 36 tons/year (19 percent
of 1977 VOC emission level from affected
plants).
$2,200 to $2,900 annualized cost/annual
ton of VOC reduction.
Source: Booz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
Davidson's Textile Blue Book, 1977.
T. W., Hughes, et al., Source Assessment; Prioritization
of Air Pollution from Industrial Surface Coating Operations,
Monsanto Research Corporation, Dayton, Ohio. Prepared for
U.S. Environmental Protection Agency, Research Triangle Park,
N.C., under Contract No. 68-02-1320 (Tech. 14) Publication
No. 650/2-75-019a.
T. A. Kittleman and A. B. Akell, "The Cost of Controlling
Organic Emissions," Chemical Engineering Progress, April 1978.
Springborn Laboratories, Air Pollution Control Engineering and
Cost Study of General Surface Coating Industry, Second Interim
Report. EPA Contract No. 68-02-2075, August 23, 1977.
Textile Economics Bureau, Technicon, November 1977, State
Industrial Directories Corporation, 1978-79 Illinois State
Industrial Directory, October 1978.
Thomas Register of American Manufacturers, 1978.
U.S. Department of Commerce, County Business Patterns,
Illinois, 1976.
U.S. Department of Commerce, Annual Survey of Manufactures,
1976, Industry Profiles, M76 (AS)-7
U.S. Department of Commerce, Annual Survey of Manufactures,
1976, Value of Product Shipments, M76(AS)-2
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Existing Stationary Sources, Volume I.
EPA-450/2-76-028, May 1977.
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Existing Stationary Sources, Volume II.
EPA-450/2-77-008, May 1977.
U.S. Environmental Protection Agency, Regulatory Guidance for
Control of Volatile Organic Compounds Emissions from 15 Categories
of Stationary Sources, EPA-905/2-78-001, April 1978.
Private conversations with:
Americo Inc., Memphis, Tennessee
Fields Plastics & Chemicals, Cleveland, Tennessee
Quinet Corporation, Nashville, Tennessee
Environmental Controls Systems, Owens, Tennessee
Wilton Corporation, Winchester, Tennessee
Krohler Manufacturing Company, Memphis, Tennessee
Nylon Net Company, Memphis Tennessee
Southern Furniture Supply Company, Morristown, Tennessee
Canvas Products Association International, St. Paul, Minnesota
Textile Economics Institute, New York, New York
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8.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
SURFACE COATING OF METAL
FURNITURE IN THE STATE
OF TENNESSEE
-------
8.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
SURFACE COATING OF METAL
FURNITURE IN THE STATE OF
TENNESSEE
This chapter presents a detailed economic analysis of
implementing RACT controls for surface coating of metal
furniture in the State of Tennessee. 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 for the most
likely RACT alternatives
Direct economic implications
Selected secondary economic impacts.
Each section presents detailed data and findings based
on analyses of the RACT guidelines, previous studies of
metal furniture plants, interviews with industry repre-
sentatives and analysis of findings.
8-1
-------
8.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for estimating:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Cost of controlling VOC emissions
Economic impact of emission control
for surface coating of metal furniture in Tennessee.
The quality of the estimates is described in detail
in the last part of this section.
8.1.1 Industry Statistics
Industry statistics on metal furniture manufacturing
plants were obtained from several sources. All data were
converted to a base year 1977, based on specific scaling
factors. The number of establishments for 1977 was based
on the Tennessee Directory of Manufacturers supplemented
by a review of the 1976 County Business Patterns, and
verified and refined by interviews wth potentially affected
metal furniture manufacturing corporations. The number of
employees was obtained from the Tennessee Directory of
Manufacturers and refined during interviews with potentially
affected metal furniture manufacturers.
The industry value of shipments was estimated by using
the value of shipments given in the 1972 Census of Manufactures
for SIC Codes 2514, 2522, 2531 and 2542 and scaled to 1977
assuming a 6 percent linear rate of growth. The ratio of
value of shipments to number of employees is equivalent to
approximately $32,000 per employee, compared with approxi-
mately $40,000 per employee in metal furniture manfacturing
nationwide. All of the employees are assumed to be involved
in the metal furniture manufacturing operations.
8.1.2 VOC Emissions
The VOC emissions were obtained from the State Emis-
sions Inventory for the rural unclassified counties and
from the regional air pollution control offices for the
three non-attainment areas of the state. These emissions
were verified and refined during telephone interviews with
potentiallly affected firms.
8-2
-------
8.1.3
Processes for Controlling VOC Emissions
Processes for controlling VOC emissions for metal
furniture plants are described in Control of Volatile Organic
Emissions from Stationary Sources, EPA-450/2-77-032. The
data provide the alternatives available for controlling VOC
emissions from metal furniture manufacturing plants.
Several studies of VOC emission control were also analyzed
in detail, and metal furniture manufacturers were inter-
viewed to ascertain the most likely types of control
techniques to be used in metal furniture manufacturing
plants in Tennessee. The specific studies analyzed
were Air Pollution Control Engineering and Cost Study of
General Surface Coating Industry, Second Interim Report,
Springborn Laboratories, and informational literature
supplied by the metal furniture manufacturers.
8.1.4 Cost of Controlling VOC Emissions for Surface
Coating of Metal Furniture
The costs of control of volatile organic emissions for
surface coating of metal furniture were developed by:
Determining the alternative types of control
systems likely to be used
Estimating the probable use of each type of
control system
Defining equipment components
Developing installed capital costs for modifi-
cations of existing systems
Aggregating installed capital costs for each
alternative control system
Defining two model plants
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
8-3
-------
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 solvent
based electrostatic spraying operations, the cost of modi-
fications to handle waterborne or high solids coatings was
not considered to be a function of the type of metal furni-
ture to be coated, since no modifications to the production
lines are necessary. Modifications are required only to the
coatings handling and pumping and spraying equipment, and
these would not differ for different types of furniture
pieces.
8.1.5. Economic Impacts
The economic impacts were determined by analyzing the
lead time requirements to implement RACT, assessing the
feasibility of instituting RACT controls in terms of capital
availability and equipment availability, comparing the
direct costs of RACT control to various state economic
indicators and assessing the secondary effects on market
structure, employment and productivity as a result of
implementing RACT controls in Tennessee.
8.1.6 Quality of Estimates
Several sources of information were utilized in assess-
ing the emissions, cost and economic impact of implementing
RACT controls on the surface coating of metal furniture in
Tennessee. 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 11C" indicates data that were
not available in secondary literature and were estimated
based on interviews, analysis of previous studies and best
engineering judgment. Exhibit 8-1, on the following page,
rates each study output listed and the overall quality of
the data.
8-4
-------
EXHIBIT 8-1
U.S. Environmental Protection Agency
SURFACE COATING OF METAL FURNITURE
DATA QUALITY
B C
A Extrapolated Estimated
Study Outputs Hard Data Data Data
Industry statistics X
Emissions X X
Cost of emissions control X
Economic impact X
Overall quality of data X
Source: Booz, Allen & Hamilton Inc.
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8.2 INDUSTRY STATISTICS
Industry characteristics, statistics and business
trends for metal furniture manufacturing plants in
Tennessee are presented in this section. Data in this
section form the basis for assessing the economic impact
of implementing RACT for control of VOC emissions from
metal furniture manufacturing plants in the state.
8.2.1. Industry Characteristics
Metal furniture is manufactured for both indoor and
outdoor use and may be divided into two general categories:
office or business and institutional, and household.
Business and institutional furniture is manufactured for
use in hospitals, schools, athletic stadiums, restaurants,
laboratories and other types of institutions, and govern-
ment and private offices. Household metal furniture is
manufactured for home and some general office use.
8.2.2 Size of the Industry
Booz, Allen, through interviews and the State
Emissions Inventory, has identified eight facilities
participating in the manufacture and coating of metal
furniture that are currently potentially affected by
RACT guidelines. One of these firms, Metals Engineering
Corporation, plans to convert all of its metal furniture
coating operations to high solids this year for economic
reasons. This conversion will take place whether or not
the proposed regulations take effect. Of the remaining
seven industries, two will be impacted by the 25 ton per
year standard and five will be impacted by the 100 ton
per year standard. The names and locations of the
industries are listed in Exhibit 8-2, on the following
page. These seven facilities accounted for an estimated
$58 million in metal furniture shipments in 1977. This
is equivalent to about 1.8 percent of the U.S. value of
shipments of metal furniture. The total number of
employees in these seven metal furniture manufacturing
facilities in Tennessee is approximately 1,800.
8.2.3 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 0.44 percent
8-5
-------
Facility Name
G.F. Business Furniture
Globe Business Furniture
Massey Seating
Sampsonite Corporation
Sandusky-Memphis
Tenneco
Tennessee State Industries
(State Prison)
EXHIBIT 8-2
U.S. Environmental Protection Agency
LIST OF MANUFACTURERS POTENTIALLY AFFECTED
BY RACT GUIDELINES FOR SURFACE COATING OF
METAL FURNITURE IN TENNESSEE
Location
Gallatin
Andersonville
Nashville
Murfreesboro
Memphis
Dickson
Nashville
Source: Tennessee Emissions Inventory and Booz, Allen &
Hamilton Inc. interviews.
-------
of the total Tennessee value of shipments of all manu-
factured goods and the seven affected facilities represent
approximately 0.23 percent. The industry employs approxi-
mately 0.7 percent of all people employed in manufacturing
in Tennessee, and the seven affected facilities employ
approximately 0.37 percent.
The Tennessee State Industries facility in Nashville
accounts for approximately 2 percent of the total VOC
emissions from potentially affected metal furniture
coating facilities in Tennessee. Therefore, its inclusion
or omission from the analysis would not substantially
affect the predicted economic impact of implementing
RACT guidelines.
8-6
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8.3
THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents information on metal furniture
manufacturing operations, estimated VOC emissions, the
extent of current control and the likely alternatives
which may be used for controlling VOC emissions in Tennessee.
8.3.1 Metal Furniture Manufacturing and Coating
Operation
Manufacturing of metal furniture consists of the
following steps: fabrication of furniture parts, coating
and final assembly. Coating operations usually include
surface preparation, coating and curing. These operations
are discussed in detail in the EPA guideline series
Control of Volatile Organic Emmissions from Existing
Stationary Sources, Volume III: Surface Coating of Metal
Furniture, EPA-450/2-77-032, December 1977.
8.3.2. Emissions and Current Controls
This section presents the estimated VOC emissions
from metal furniture manufacturing facilities in Tennessee
in 1977 and the current level of emission controls implemented
in the state. Exhibit 8-3, on the following page, shows the
total emissions from the seven metal furniture manufacturing
facilities to be about 950 tons per year.1 These emissions
were obtained from the State Emissions Inventory and from
the regional air pollution control offices in Tennessee
and verified and refined during telephone interviews with
affected facilities.
Experiments with water based coatings by several manu-
facturers who currently use solvent based electrostatic
spray coating lines have not provided the quality of finish
or the production line speed desired. One manufacturer is
experimenting with high solids coatings, and is currently
using 60 percent solids in approximately 10 to 15 percent
of his operation.
One additional manufacturer with current VOC emissions of
approximately 440 tons per year plans to convert all coating
operations to high solids by December 31, 1979 and therefore
is assumed not to be affected by RACT.
8-7
-------
EXHIBIT 8-3
U.S. Environmental Protection Agency
SUMMARY OF HYDROCARBON EMISSIONS FROM METAL FURNITURE
MANUFACTURING FACILITIES IN TENNESSEE
Hydrocarbon
Emissions
No. of (Tons/Year)
Facility Name
Sources
Current
Potential
G.F. Business Furniture
1
300
1,314
Globe Business Furniture
1
183
732
Massey Seating
1
9
39
Samsonite Corporation^
2
182
1,144
Sandus ley-Memphis**
1
68
298
Tenneco^5
2
193
1,035
Tennessee State Industries
1
18
78
a. Booz, Allen estimate based on data provided during industry
interviews.
b. Data from Tennessee Emissions Inventory.
Source: Tennessee Emissions Inventory and Booz, Allen &
Hamilton Inc. interviews.
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8.3.3
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 8-4, on the following page.
This emission limit is based on the use of low organic
solvent coatings. It can also be achieved with waterborne
coatings and is approximately equivalent (on the basis
of solids applied) to the use of an add-on control
device that collects or destroys about 80 percent of the
solvent from a conventional high organic solvent coating.
Greater reductions (up to 90 percent) can be achieved by
installing new equipment which uses powder or electro-
deposited waterborne coatings. A comparison of the
various control options is presented in Exhibit 8-5,
following Exhibit 8-4.
8.3.4 Selection of the Most Likely RACT Alternatives
The choice of application of control alternatives
for the reduction of hydrocarbon emissions in existing
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.
The first factor to be considered is whether the
existing equipment can be used by the substitution of a
coating material which will meet the RACT guideline.
This alternative would require the least capital expendi-
ture and may minimize production downtime.
If the existing equipment has to be modified,
replaced or expanded, factors to consider are the kind
of changes that have to be made, the capital costs, the
change in operating costs, the length of time needed to
make the changes, the effect on the production rate, the
operational problems that will have to be handled and
the effect on the quality of the product.
Interviews with industry representatives indicate
that several of the affected manufacturers will use their
existing spraying equipment and modify it to handle high
solids coatings. The reasons given for this preference
are that a high quality finish is required.
8-8
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EXHIBIT 8-4
U.S. Environmental Protection Agency
EMISSION LIMITATIONS FOR RACT IN SURFACE
COATING OF METAL FURNITURE
Recommended Limitation
Affected Facility
Metal furniture coating line
kg of organic solvent
emitted per liter of
coating (minus water)
0.36
limitation
lbs. of organic solvent
emitted per gallon of
coating (minus water)
3.0
Source: Control of Volatile Organic Emissions from Existing Stationary Sources, Volume III:
Surface Coating of Metal Furniture, EPA-450/2-77-032, December 1977.
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EXHIBIT 8-5(1)
U.S. Environmental Protection Agency
RACT CONTROL OPTIONS FOR THE METAL FURNITURE INDUSTRY
Control Options
Waterborne
electrodeposition
(EDP)
Affected Facility
and Application
Primecoat or
single coat
Typical Percent
Reduction
90-95*
Comparison of Control Options
Provides excellent coverage,
corrosion protection and
resistance
Fire hazards and potential
toxicity are reduced
Dry off oven may be omitted
after cleansing if an iron-
phosphate pretreatment is
used
Good quality control due to
fully automated process may
be offset by increased
electrical requirements for
the coating, refrigeration
and circulation systems if
EDP replaces waterborne
flow or dip coating opera-
tions. This would not be
true if EDP replaces a
spraying operation
EDP can be expensive on small-
scale production lines
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EXHIBIT 8-5(2)
U.S. Environmental Protection Agency
RACT CONTROL OPTIONS FOR THE METAL FURNITURE INDUSTRY
Control Options
Waterborne (spray dip
or flow coat)
Affected Facility
and Application
All applications
Typical Percent
Reduction
60-903
Comparison of Control Options
This will likely be the first
option considered because of
the possibility that these
coatings can be applied
essentially with existing
equipment
Requires a longer flash-off
area than organic solvent-
borne coatings
Curing waterborne coatings
may allow a decrease in
oven temperature and some
reduction in airflow, but
limited reduction if high
humidity conditions occur
Spraying electrostatically
requires electrical isola-
tion of the entire system.
Large lines may be difficult
to convert because coating
storage areas may be
hundreds or thousands of
feet away from the
application area
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EXHIBIT 8-5(3)
U.S. Environmental Protection Agency
RACT CONTROL OPTIONS FOR THE METAL FURNITURE INDUSTRY
Affected Facility Typical Percent
Control Options and Application Reduction
Waterborne (spray dip
or flow coat)
(continued)
Powder (spray or dip) Top or single coat 95-99a
Comparison of Control Options
Dip or flow coating applica-
tion requires closer
monitoring due to its
sensitive chemistry
Weather conditions affect the
application, so flash-off
time, temperature, air
circulation and humidity
must be frequently monitored
Changes in the number of nozzels
may be required
Sludge handling may be more
difficult
No solid or liquid wastes to
dispose of
Powder may reduce energy re-
quirements in a spray booth
and the ovens because less
air is required than for
solvent-borne coatings and
flash-off tunnel is eliminated
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EXHIBIT 8-5(4)
U.S. Environmental Protection Agency
RACT CONTROL OPTIONS FOR THE METAL FURNITURE INDUSTRY
Affected Facility Typical Percent
Control Options and Application Reduction
Powder (spray or
dip) (continued)
Comparison of Control Options
Powder can be reclaimed, result-
ing in up to 98% coating
efficiency
All equipment (spray booths,
associated equipment and
often ovens) used for liquid
systems must be replaced
Powder films cannot be applied
in thicknesses of less than
2 mils and have appearance
limitations
Powder coatings may be subject
to explosions
Excessive downtime (half-hour)
is required during color
changes. If powders are not
reclaimed in their respec-
tive colors, coating usage
efficiency drops to 50%
to 60%
High solids (spray) Top or single coat 50-80
May be applied with existing
equipment
-------
EXHIBIT 8-5(5)
U.S. Environmental Protection Agency
RACT CONTROL OPTIONS FOR THE METAL FURNITURE INDUSTRY
Control Options
High solid (spray)
(continued)
Affected Facility
and Application
Typical Percent
Reduction
Comparison of Control Options
Reduces energy consumption
becasue 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
Carbon adsorption Prime, single or
top coat
(application
and flash-off
areas)
Additional energy requirement
is a possible disadvantage
Additional filtration and
scrubbing of emissions from
spray booths may be required
There is little possibility
or reusing recovered solvents
because of the variety of
solvent mixtures
90 Although it is technically
feasible, no metal
furniture facilities are
known to use carbon
adsorption
-------
RACT
Affected Facility
Control Options and Application
Carbon adsorption
(continued)
Incineration
Prime, single or
topcoat (ovens)
EXHIBIT 8-5(6)
U.S. Environmental Protection Agency
CONTROL OPTIONS FOR THE METAL FURNITURE INDUSTRY
Typical Percent
Reduction Comparison of Control Options
Many facilities may require
dual-bed units which require
valuable plant space
Particulate and condensable
matter from volatilization
and/or degradation of resin,
occurring in baking ovens
with high temperature, could
coat a carbon bed
90^ These are less costly and more
efficient than carbon
adsorbers for the baking
ovens because the oven
exhaust temperatures are too
high for adsorption and the
high concentration of organics
in the vapor could provide
additional fuel for the
incinerator
-------
EXHIBIT 8-5(7)
U.S. Environmental Protection Agency
RACT CONTROL OPTIONS FOR THE METAL FURNITURE INDUSTRY
Control Options
Incineration
(continued)
Affected Facility
and Application
Typical Percent
Reduction
Comparison of Control Options
Heat recovery system to reduce
fuel consumption would be
desirable and would make
application and flash-off
area usage a viable option
a. The base case against which these percent reductions were calculated is a high
organic solvent coating which contains 25 volume percent solids and 75 percent
organic solvent. The transfer efficiencies for liquid coatings were assumed
to be 80 percent for spray, 90 percent for dip or flow coat, 93 percent for
powders and 99 percent for electrodeposition.
b. This percent reduction in VOC emissions is only across the control device
and does not take into account the capture efficiency.
Source: Control of Volatile Organic Emissions from Stationary Sources—Volume III:
Surface Coating of Metal Furniture, EPA-450/2-77-032, December 1977.
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8.4 COST AND VOC REDUCTION BENEFIT EVALUATIONS FOR
THE MOST LIKELY RACT ALTERNATIVES
This section presents the cost for the most likely
control systems and associated VOC reduction benefit.
First the costs for the two model plants are presented,
which are then extrapolated to the statewide industry.
8.4.1 Model Plant Costs and VOC Reduction Benefits
Two model plants, each with different sizes, were
selected for the surface coating of metal furniture. They
included an electrostatic spraying line with outputs of
3 million square feet and 48 million square feet of surface
area coated per year. Assuming a one-color single-coating
line, the capital, operation and maintenance costs for the
model plant were estimated. The cost of pretreatment facili-
ties, ovens and plant building was excluded from total capital
costs. The annualized cost includes coating materials,
utilities, operation and maintenance labor,1 maintenance
material1 and capital charges (depreciation, interest, taxes,
insurance and administrative charges).2 General plant
overhead cost was excluded from the annualized cost. The
estimated costs for the model base plant and the incremental
costs for the most likely control options are presented in
Exhibit 8-6.
The assumptions for the cost estimates are discussed
in the RACT guidelines document (EPA-450/2-77-032). It
should be noted that the incremental costs, or savings,
can change significantly if the underlying assumptions
are changed. For example, for a facility that uses
35-40 percent solids coating instead of the model plant
assumption of 25 percent, less savings for conversion to
higher solids (70 percent) would result. The savings of
$6,000 in direct operating costs for converting from 25
percent to 70 percent solids for Model Plant A-l becomes
a $2,000 savings when converting from 38 percent to 70
Maintenance material and labor charges were assumed to be aproxi-
mately equal to 4 percent of the capital cost.
The capital charges were assumed to be 20.3 percent, which
includes 10 percent interest and a 10-year loan life and 4
percent taxes and insurance.
8-9
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EXHIBIT 8-6
U.S. Environmental Protection Agency
ESTIMATED COST OF CONTROL FOR MODEL
EXISTING ELECTROSTATIC SPRAY COATING LINES
Model Plant A-l Model Plant A-2
(3 Million
Square Feet/Yr)
(48 Million Square Feet/Yr)
Base
Plant
Incremental Costs for
Conversion
Base
Plant
Incremental Costs for
Conversion
Cost
25%
Solids
Higher
Solids
Waterborne
Powder
Cost
25%
Solids
Higher
Solids Waterborne
Powder
Installed capital cost ($000)
255
15
15
60
1,200
62
62
317
Direct operating costs
(savings) ($000)
175
(6)
5
17
1,113
(81)
50
343
Capital charges3 ($000/yr)
53
3
3
12
248
13
13
65
Net annualized cost (credit)
($000/yr)
228
(3)
8
29
1,361
(68)
63
408
Solvent emissions controlled
(tons/yr)
N/A
21
20
24
N/A
336
314
380
Percent emissions reduction
N/A
86
80
97
N/A
86
80
97
Annualized cost (credit) per
ton of VOC controlled
($/ton)
N/A
(143)
400 1
,208
N/A
(202)
201
1,074
Note: 1977 dollars and short
tons
a. The capital charges were assumed to be 20.3 percent, which includes 10 percent interest
and a 10-year loan life and 4 percent taxes and insurance. This differs from the RACT
guideline assumption of 18.6 percent based on a 12-year life.
Source: Booz, Allen & Hamilton Inc., based on Control of Volatile Organic Emissions from
Stationary Sources, Volume III: Surface Coating of Metal Furniture, EPA-450/
2-77-032, December 1977.
-------
percent solids. Similarly, capital costs for conversion
to waterborne coating would increase dramatically if
significant changes to the facility were needed, compared
to the assumption of cleaning and corrosion protection
only.
8.4.2 Extrapolation of Control Costs to the
Statewide Industry
Exhibit 8-7, on the following page, presents the
extrapolated costs for meeting RACT guidelines for VOC
emission control for surface coating of metal furniture
to the statewide industry in Tennessee. The estimates
are based on the following assumptions and methods:
Based on emissions estimates presented in
Exhibit 8-3, seven plants 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. Where information from the industry
was not available, existing spray coating lines
were assumed to convert to high solids or waterborne
coatings depending upon the quality of finish
required on the finished product.
The capital cost of control for high solids
and waterborne spray was estimated by scaling
up the model plant A-l costs by a capacity factor
calculated as follows. The capacity factor was
assumed to be one for the coating lines with emis-
sions per line equal to or less than those of the
model plant. For the coating lines with greater
emissions per line than those of the model plant,
the capacity factor per line was determined to be
equal to:
(actual emissions/model plant emissions^
The annual operating cost for high solids and
waterborne spray coating was assumed to be
proportional to the amount of emissions reduction
and was scaled up from the model plant costs.
8-10
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EXHIBIT 8-7
U.S. Environmental Protection Agency
STATEWIDE COSTS FOR PROCESS MODIFICATIONS OF
EXISTING METAL FURNITURE COATING LINES TO MEET RACT
GUIDELINES FOR VOC EMISSION CONTROL IN TENNESSEE
Projected Control Option
High
Solids Waterborne
Characteristic Spray Spray Total
Number of plants 4 3 7
Number of process lines 5 4 9
Uncontrolled emissions (ton/yr) 685 268 953
Potential emission reduction (ton/yr) 588 214 802
Installed capital cost ($000)^ 197 108 305
Direct annual operating cost (credit) ($000) (168) 55 (113)
(1-3 shifts/day)C
Annualized capital charges (credit) ($000)C 40 22 62
Net annualized cost (credit) ($000) (128) 77 (51)
Annualized cost (credit) per ton of (217) 360 (64)
emissions reduced ($)
a. Based on control efficiency of 86 percent for high solids, and 80 percent for waterborne coating.
b. Based on cost for model plant A-l from Exhibit 8-6.
c. 20.3 percent of capital cost.
Source: Booz, Allen & Hamilton Inc.
-------
The data in Exhibit 8-7 show that the control of VOC
emissions for surface coating of metal furniture to meet the
RACT guidelines in Tennessee would require a statewide
capital investment of about $305,000 and result in a
statewide net annualized savings of approximately $51,000.
Based on data obtained from U.S. EPA (backup data
for RACT guidelines), the conversion to high solids or
waterborne coatings could result in an energy savings
due to reduced heat requirements. For model plant
A-l, for high solids conversion the estimated savings is
129 equivalent barrels of oil per year, and for waterborne
spray conversion it is estimated at 171 equivalent
barrels per year. Assuming that energy saving is propor-
tional to emissions reduction, the savings for the state
would be equivalent to approximately 5,400 barrels of oil
annually.
8-11
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8.5 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 passthrough), state economic
variables and capital investment.
8.5.1 RACT Timing
RACT must be implemented statewide by September 1, 1981
for low solvent coatings and by November 1, 1981 for equipment
modifications. This implies that surface coaters of metal
furniture must have made their process modifications and be
operating within less than three years. The timing require-
ments of RACT impose several requirements on metal furniture
coaters:
Determine the appropriate emission control
system.
Raise or allocate capital to purchase new
equipment 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
within the required timeframe.
8.5.2. Feasibility Issues
Technical and economic feasibility issues of implemen'
ting the RACT guidelines are discussed in this section.
8-12
-------
Some metal furniture manufacturers have experimented
with waterborne spray coatings, but have not succeeded
in obtaining the desired quality finish. None of the
metal furniture manufacturers potentially affected by
RACT has implemented high solids coatings to date.
However, based on interviews with industry representatives,
it is predicted that several manufacturers will convert
to high solids spray coatings in order to comply with
RACT guidelines. These coating materials may not be
available in the desired quality and the variety of
colors required by the manufacturers. The development
of suitable coating materials in a variety of colors is
the key to successful implementation of RACT in the
required time.
Another problem likely to be encountered by the
metal furniture manufacturers is that of excessive use
of the high solids coatings. Experiments by one manufacturer
in another state indicate that personnel accustomed to
high solvent coatings are likely to apply more than the
desired thickness of coating, thus using more paint.
This problem could be alleviated through training of
personnel. It is also possible that the increased
demand for high solids coatings may raise the price of
these coating materials.
Unless major modifications to equipment are required,
for example, automated coating lines or complete isolation
of large facilities to convert to electrostatically
sprayed waterborne coating, the cost of conversion to
high solids or waterborne coatings is not likely to have
a significant effect on the implementation of the RACT
guidelines for surface coating of metal furniture.
8.5.3 Comparison of Direct Cost With Selected Direct
Economic Indicators
The net increase in the annualized cost to the
coaters of metal furniture represents approximately 0.05
percent of the industry's 1977 value of shipments manu-
factured in the state, and 0.09 percent of the value of
shipments for the seven affected facilities. This
increase may translate to a few cents per unit of furniture
manufactured to more than $1 per unit manufactured,
depending on the furniture surface area coated.
8-13
-------
The major economic impact in terms of cost to most
individual companies will be capital related rather than
from increased annual operating costs. The capital
required for RACT compliance may present a significant
capital appropriation problem for the smaller companies,
the severity of which will depend upon the ability of
these companies to pass on these costs through higher
prices- The capital drain could also be reflected in
any opportunities lost because of capital usage for RACT
compliance.
8-14
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8.6
SELECTED SECONDARY ECONOMIC IMPACTS
This section discusses the secondary impacts of
implementing RACT on employment, market structure,
productivity, and energy consumption.
Employment and market structure in the metal furniture
industry are not expected to be significantly affected by
the RACT guidelines.
By converting to high solids coatings, productivity
could be increased because manufacturers will be able to
get more paint on per unit volume basis and reduce paint
application time. However, the necessity of converting
to airless guns, with slower application of coatings,
could reduce coating line speed and thereby reduce
productivity for some manufacturers. Line speed is also
reduced with the use of waterborne coatings due to
increased drying time.
The conversion to high solids or waterborne coatings
by the affected manufacturers could result in a net
savings of energy equivalent to approximately 5,400 barrels
of oil annually.
*****
Exhibit 8-8, on the following page, presents a
summary of the current economic implications of implemen-
ting the RACT guidelines for surface coating of metal
furniture in the State of Tennessee.
8-15
-------
EXHIBIT 8-8{l)__
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR SURACE COATING OF
METAL FURNITURE IN TENNESSEE
Current Situtation
Discussion
Number of potentially affected
facilities
There are seven metal furniture
manufacturing facilities
Indication of relative importance
of industrial section to state
economy
1977 value of shipments was
approximately $109 million
industry-wide and approximately
$58 million for seven affected
facilities
1977 VOC emissions (actual) 953 tons per year
Industry preferred method of VOC Low solvent coatings
control
Assumed method of control to meet
RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized savings (statewide)
Low solvent coatings
Discussion
$305,000
$51,000 which represents
0.05 percent of the industry's
1977 value of shipments
Price Increase from a few cents to over
$l/unit depending on the surface
area coated
Energy savings 5,400 equivalent barrels of oil
per yr.
Productivity
Employment
Market structure
No major impact
No major impact
No major impact
RACT timing requirements (1982)
Companies using a variety of
colors may face a problem
finding suitable low solvent
coatings
-------
EXHIBIT 8-8(2)
U.S. Environmental Protection Agency
Affected Areas in Meeting RACT
Problem area
VOC emissions after RACT
Cost effectiveness of RACT
Discussion
low solvent coating in a variety
of colors providing acceptable
quality needs to be developed
151 tons per year (approximately
16 percent of current emissions
level)
$64 annualized savings per annual
ton of VOC emissions reduction
Source: Booz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Existing Stationary Sources, Volume III;
Surface Coating of Metal Furniture. EPA-450/2-77-032,
December 1977.
U.S. Department of Commerce, County 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.
Private conversations with:
Globe Business Furniture, Andersonville, Tennessee
Massey Seating, Nashville, Tennessee
G.F. Business Furniture Gallation, Tennessee
Tennesco Dickson, Tennessee
Delwood Furniture Sparta, Tennessee
-------
10.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT GUIDELINES
FOR SURFACE COATING OF LARGE
APPLIANCES IN THE STATE OF
TENNESSEE
-------
10.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT GUIDELINES
FOR SURFACE COATING OF LARGE
APPLIANCES IN THE STATE OF
TENNESSEE
This chapter presents a detailed analysis of the impact
of implementing RACT for surface coating of large appliances
in the State of Tennessee.1 The chapter is divided into six
sections including:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Emissions and current controls
Cost and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic impacts.
Each section presents detailed data and findings based
on analyses of the RACT guidelines, previous studies of the
application of surface coatings on large appliances, inter-
views and analysis.
1. The three urban nonattainment counties are: Davidson,
Hamilton and Shelby. In these counties all sources
with potential emissions of 2 5 tons or more per year
are regulated. For the rest of the state, all sources
with potential emissions of 100 tons or more per year
are regulated.
10-1
-------
10.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining
estimates of:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Cost of controlling VOC emissions
Economic impacts
for the surface coating of large appliances in Tennessee.
An overall assessment of the quality of the estimates
is detailed in the latter part of this section.
10.1.1 Industry Statistics
The major appliance industry contains six major indus-
trial areas as defined by the Standard Industrial Code (SIC).
SIC Code Description
3582 Commercial laundry
358 5 Commercial refrigeration and air
conditioning
358 9 Commercial cooking and dishwashing
3631 Household cooking
3632 Household refrigerator and freezer
3633 Household laundry
3639 Household appliances, N.E.C.
(includes water heaters,
dishwashers, trash compactors)
Current Industrial Reports provides detailed industry
statistical data for the major appliance industry on a national
basis. However, because of confidentiality and disclosure
problems, there is no individual data source which provides
a comprehensive analysis of the statistical data for each
individual state. Therefore, our methodology to provide
statewide major appliance statistical data was as follows:
A list of potentially affected facili-
ties was compiled from the state emission
inventory, associations and trade journals.
10-2
-------
Interviews were performed with some
of the manufacturers to validate the list
of potentially affected facilities. Most of
the firms potentially affected were contacted
by the Tennessee Department of Public Health.
Secondary source data were collected for each
of the industry categories from sources such
as:
Sales and Marketing Management
(April 25, 1978)
1972 Census of Manufactures
Tennessee Directory of Manufacturers,
1978
The Booz, Allen study team, utilizing all
available inputs, determined an estimated
percent of the total U.S. value of ship-
ments applicable to the state in each
SIC category.
For those categories which included products not included
in this study, the value of shipments of these items were
factored out of the totals.
Data on number of units shipped were not available for
commercial appliances, so economic impact based on unit
costs for the total large appliance industry could not be
calculated.
10.1.2 VOC Emissions
The Tennessee EPA provided a list of facilities potentially
affected by the implementation of the RACT guidelines. Emissions
were listed for 20 companies identified as major emitters in this
category. Of the 20 companies identified six are located in the
urban nonattainment counties. The emission data provided by
the Tennessee EPA survey are used as the basis for current
VOC emissions in this report.
Tennessee EPA has neither completed the compilation of
emissions data nor completed verifying the list of potentially
affected facilities in this RACT category.
10.1.3 Processes for Controlling VOC Emissions
Processes for controlling VOC emissions for the surface
coating of large appliances are described in Control of Volatile
Organic Emissions from Existing Stationary Sources—Volume V:
Surface Coating of Large Appliances (EPA-450/2-77-034,
December 1977).
10-3
-------
All manufacturers interviewed for economic impact studies
in Region V and in Region IV agreed that, currently, consider-
ation was being given to meeting the present RACT deadlines
through modification to the existing topcoating equipment
(i.e., high solids) and through possible alternatives to
primecoating operations (i.e., waterborne dip or flow coat
or high solids), depending on the type of existing equipment.
Therefore, the analysis for this report was based on these
alternatives. The methodology for the cost analysis is des-
cribed in the following paragraphs.
10.1.4 Cost of Control of VOC Emissions for Surface
Coating of Large Appliances
The costs of control of volatile organic emissions for
surface coating of large appliances were developed by:
Determining the alternative types of control
systems likely to be used
Estimating the probable use of each type of control
system
Defining system components
Developing installed capital costs for modifi-
cations of existing systems
Aggregating installed capital costs for each
alternative control system
Defining a model plant
Developing costs of a control system for the
model plant:
Installed capital cost
Direct operating cost
Annual capital charges
Energy requirements
Extrapolating model costs to individual industry
sectors
Aggregating costs to the total industry for the
state.
10-4
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The model plant that was used as a basis for establishing
the cost of process modification to meet RACT was a solvent-
based dip (or flow coat) primecoat and a solvent-based electro-
static bell or disc topcoat. The cost of modification to water-
borne dip or flow coat primecoat and to high solids electrostatic
disc or bell topcoat was not considered to be a function of the
type of major appliance to be coated, since no modifications to
the production lines are necessary. Modifications are required
only to the coatings handling and pumping and spraying equipment,
and these would be approximately the same whether washers, dryers
or refrigerators were being coated.
This study will cover exceptions to the model plant used
in the economic analysis and requiring major reconstruction
and/or modification of existing lines to meet RACT. These
exceptions include major alterations to spray booth configura-
tions or installation of electrodeposition for prime coating
operations or both. These exceptions will be applied only when
specific information has been made available from large appliance
coaters as to their applicability.
10.1.5 Economic Impacts
The economic impacts were determined by analyzing the
lead time requirements to implement RACT, assessing the
feasibility of instituting RACT controls in terms of capital
availability and equipment availability, comparing the direct
costs of RACT control to various state economic indicators and
assessing the secondary effects on market structure, employment
and productivity as a result of implementing RACT controls in
Tennessee.
10.1.6 Quality of Estimates
Several sources of information were utilized in assessing
the emissions, cost and economic impact of implementing RACT
controls on the surface coating of large appliances in Tennessee.
A rating scheme is presented in this section to indicate the
quality of the data available for use in this study. A rating
of "A" indicates hard data (data that are published for the
base year), "B" indicates data that were extrapolated from hard
data and "C" indicates data that were not available in secondary
literature and were estimated based on interviews, analysis of
previous studies and best engineering judgment. Exhibit 10-1,
on the following page, rates each study output listed and the
overall quality of the data.
10-5
-------
EXHIBIT 10-1
U.S. Environmental Protection Agency
SURFACE COATING OF LARGE APPLIANCES
DATA QUALITY
B C
A Extrapolated Estimated
Study Outputs Hard Data Data Data
Industry statistics X
Emissions X
Cost of emissions control X
Economic impact X
Overall quality of data X
Source; Booz, Allen & Hamilton Inc.
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10.2 INDUSTRY STATISTICS
Industry statistics and business trends for the manufac-
ture and surface coating of large appliances in Tennessee are
presented in this section. The discussion includes a descrip-
tion of the number of facilities, a comparison of the size
of the major appliance industry to the state economic indi-
cators, a historical characterization of the industry and an
assessment of future industry patterns. Data in this section
form the basis for assessing the impact on this industry
of implementing RACT to VOC emissions in Tennessee.
10.2.1 Size of the Industry
The Tennessee EPA reports and Booz, Allen has identified
20 companies participating in the manufacture and coating of
large appliances, six of which are in urban nonattainment
counties, as shown in Exhibit 10-2, on the following page.
These companies accounted for between $0.9 billion and $1.2
billion in shipments. The estimated number of employees in
1977 was between 12,000 and 13,000. The data and the sources
of information are summarized in Exhibit 10-3, following
Exhibit 10-2, and indicate that Tennessee shipped an estimated
6 percent to 8 percent of the U.S. value of shipments in the
large appliance industry.
10.2.2 Comparison of the Industry to the State Economy
A comparison of the value of shipments of large appliances
(in the SIC categories stated previously) with the state economy
indicates that the large appliance industry represents 3.0
percent to 4.5 percent of the total Tennessee value of ship-
ments of all manufactured goods. The industry employs between
2.5 percent and 3.0 percent of all people employed in manufac-
turing in Tennessee. These figures are shown in Exhibit 10-4,
following Exhibit 10-3, along with the sources of the data.
10.2.3 Historical and Future Patterns of the Industry
The shipments of major appliances have generally followed
the economic condition of the country. In the last ten years,
sales have generally increased annually, except during the
recession in 1974 and 1975. Shipments peaked in 1973 for all
major appliances.
Shipments picked up in 1976 and continued to grow in
1977. The outlook through 1982 is a continued annual growth
of about 3 percent to 5 percent.
10-6
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EXHIBIT 10-2
U.S. Environmental Protection Agency
LIST OF MANUFACTURERS, POTENTIALLY AFFECTED
BY RACT GUIDELINES, WHO SURFACE COAT
LARGE APPLIANCES IN TENNESSEE
Facility Name
Location
Amana Refrigeration
Fayetteville
Athens Stove Works
Athens
Brown Stove Works
Cleveland
Carriera
Collierville
Carrier
McMinnville
Duo-Therm
Alamo
General Electric
Columbia
Gray & Dudley Company3
Nashville
Hardwick Stove
Cleveland
Heil Quaker3
Nashville
ITT Nesbitt
Jackson
Magic Chef
Cleveland
Modern Maida
Chattanooga
Mor-Flo Industries
Johnson City
State Industries
Ashland City
Suburban Manufacturing
Dayton
Tappan Company
Springfield
Trane Company
Clarksville
U.S. Stove Company3
South Pittsburg
W. L. Jackson3
Chattanooga
a. Located in urban nonattainment counties.
Source; Tennessee EPA and Tennessee Directory of Manufac-
turers , 1978
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EXHIBIT 10-3
U.S. Environmental Protection Agency
INDUSTRY STATISTICS—SURFACE COATING OF LARGE APPLIANCES
TENNESSEE
SIC Code
RACT Category
U.S. Totalsc
1977
Estimated
No. of Units
Shipped
(thousand)
Estimated
Value of
Shipments
($ million)
Tennessee Totals0
Estimated
Percent of U.S.
Shipments
Estimated
Value of
Shipments
($ million)
Estimated
No. of Units
Shipped
(thousand)
3582
3585
Commercial laundry
Commercial refrigeration
and air conditioning
200
9, 500
4-6
400-500
3589
Commercial cooking
and dishwashing
150
3631
3632
Household cooking
Household refrigerator
and freezer
5,000
7, 300
1, 500
2,000
25-35
400-500
1,300-1,700
3633
3639
Household laundry
Household appliances:
Water heaters
Dishwashers
Trash compactors
8,500
9, 300
1, 500
800
17-20
140-160
1,600-1,900
TOTAL
15,650
6-8
940-1,160
2,900-3,600
a. Current Industrial Reports, Major Household Appliances, 1977 (issued June 1978) for categories 3631, 3632, 3633 and
3639. 1972 Census of Manufactures Service Industry Machine Shops (issued March 1975 and updated to 1977) for categorie
3582, 3585 and 3589. Sales and Marketing Management (April 25, 1977) for categories 3631, 3632, 3633 and 3585.
b. Not available
Source: Booz, Allen & Hamilton Inc.
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EXHIBIT 10-4
U.S. Environmental Protection Agency
COMPARISON OF LARGE APPLIANCE STATISTICS WITH STATE
OF TENNESSEE ECONOMIC DATA
Estimated Tennessee
Economic Indicators
Estimated Percent of Tennessee
Manufacturing Economy Engaged
in Large Appliance Manufacturing
Total 1977 value
of shipments of all
manufactured goods
Number of employees
in manufacturing
$26-32 billion
476,000
3.0 to 4.5
2.5 to 3.0
Source: Current Industrial Reports, Major Household Appliances, 1977 (issued June 1978)
for categories 3631, 3632, 3633 and 3639; 1972 Census of Manufactures
Industry Machines and Machine Shops (issued March 1975 and updated to 1977)
for categories 3582, 3585 and 3589; Sales and Marketing Management (April 25,
1977) for categories 3631, 3632, 3633 and 3585; Sales and Marketing Management,
April 24, 1978; Annual Survey of Manufactures, Statistics for States Standard
Metropolitan Statistical Areas, Large Industrial Counties and Selected Cities,
1976, Tennessee Directory of Manufacturers, 1978; Booz, Allen & Hamilton Inc.
-------
The growth of the major appliance market will be reflected
in the growth of the housing industry and the socio-economic
effects of the trends toward smaller families, single-person
households, higher energy costs and the like.
Historical and future growth patterns are shown in
Exhibits 10-5 and 10-6, on the following pages.
10-7
-------
EXHIBIT 10-5
U.S. Environmental Protection Agency
HISTORICAL U.S. SALES FIGURES—SELECTED MAJOR
HOUSEHOLD APPLIANCES FOR 1968-1977
Appliance Sales (Millions Of Units)
Appliance 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977
Washer 2.9 4.4 4.1 4.6 5.1 5.5 4.9 4.2 4.5 4.9
Dryer 2.9 3.0 2.9 3.3 3.9 4.3 3.6 2.9 3.1 3.6
Range 4.4 4.5 4.5 4.3 4.8 5.0 4.1 3.6 4.2 4.7
Dishwasher 1.9 2.1 2.1 2.5 3.2 3.7 3.3 2.7 3.1 3.4
Refrigerator 5.2 5.3 5.3 5.7 6.3 6.8 5.9 4.6 4.8 5.7
Source: Appliance, April 1978, pp. 37-40.
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EXHIBIT 10-6
U.S. Environmental Protection Agency
FIVE-YEAR U.S. SALES FORECAST FOR
SELECTED MAJOR HOUSEHOLD APPLIANCES
(1978-1982)
Appliance Estimates (Millions Of Units)
Appliance 1978 1979 1980 1981 1982
Washer 5.4 5.6 5.7 5.8 5.8
Dryer 4.0 4.2 4.4 4.5 4.6
Range 5.2 5.4 5.6 5.7 5.8
Dishwasher 3.7 3.9 4.1 4.4 4.6
Refrigerator 6.0 6.2 6.4 6.5 6.6
Source: Appliance, January 1978, pp. 54-55.
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10.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents the process description for the prep-
aration, application and curing of surface coatings for large
appliances, estimated VOC emissions from facilities coating large
appliances in Tennessee and the extent of current control in use.
10.3.1 Large Appliance Process Description
A large appliance plant typically manufactures one or two
types of appliances and contains only one or two lines. The
lines may range from 1,200 to 4,000 meters (3/4 mile to 2-1/2
miles) in length and operate at speeds of 3 to 15 meters (10
to 50 feet) per minute.
Cases, doors, lids, panels and interior parts for large
appliances are stamped from sheet metal and hung on overhead
conveyors. The parts are transported to the cleaning and pre-
treatment sections which are typically located on the ground
floor of the plant.
Exhibit 10-7 and Exhibit 10-8, on the following pages,
describe and illustrate the pretreatment, coating and curing
processes for a typical large appliance facility.
10-8
-------
U.S.
PRESENT
CXIll B FT 10-7
Environmental Protect ion Agency
MANUFACTURING TECHNOLOGY DESCRIPTION
MANU1 ACTUKlNJ AND PRETKEATMENT
process description
COATING PROCEbS DESCRI PTION
CURING PROCESS DESCRIPTION
TYPICAL COATINGS AND
SOLVENTS
Large appliance plant typically muou-
ta-Laroib one or two different types of
applian^eb and contains only one or
two lines
. Lilies may range from 1,200 to
4 ,U0G meters (3/4 to 2-1/2
nu 1 ei.) lit length
. Line^ may operate at speeds of
J lu 15 motors {10 to 50 feet)
per minute
Parts ate transported on overhead
conveyors
. ^iL-ai.ed in an alkaline solution
. RlnScd
Tiudled with zinc or iron phos-
phate
. Rinsed again
. Treated with chromate (if
iron phosphate is used)
. bri^d dl 300°F to 400°P in a
gas fired oven and cooled before
coating
ExLenor parts may enter a prime
preparation booth to check the
pre L reatmen t
. Paits can be sanded and tack-
lagged (wiped) to provide an
even finish
Pnmecoat or interior single coat
(0.5 to 1.0 mils) is applied
. Dip coating occurs in a con-
tinuously agitated tank
. Flow coating occurs in an
enclosed booth as the parts
move through on a conveyor
and are sprayed by station-
ary or oscillating nozzles
- Parts may enter a flash-
off tunnel to allow
coating to flow out
properly
. Spray coating occurs in booths
either by automatic electro-
static spraying or manually
- Flashoff of 7 minutes
to allow solvents to rise
slowly in the film to avoid
popping in the oven
Prior to topcoating, the parts are
checked for smoothness and manually
sanded, "tack-ragged" or retouched
with a spray gun
Topcoat or exterior single coat
(direct-to-metal topcoat (1.0 to
1.5 mils) is applied
. Usually applied by automated
electrostatic discs, bell or
other type of spray equipment
. Usually applied in many colors
. Applied in side-draft or down-
draft spray booths equipped
with water wjsh and undergoes
a 10-minuto flashoff period
Inside of many exterior large appli-
ance parts arc sprayed with gelsonite
for additional moisture xesistance
and for sound deadening
Coated parts are baked for about
20 minutes at 180°C to 2 30°C
(350°F to 450°F) in a multipass
oven
Baked for 20 to 30 minutes at
140°C to 180°C (270°F to 350°F)
in a multipass oven
Coatings include;
. Epoxy
. Epoxy-acrylic
. Acrylic or polyester
enamels
Alkyd resins
Solvents include;
. Esters
. Keytones
. Aliphatics
. Alcohols
. Aromatics
. Ethers
. Terpenes
bum co; I'unLiol Ut Vola\ l_|ii Emissions l'rom Existing Stationary Sources -- Volume V: Surface Costings Of Large Appl iances,
EPA-450/2-7 7-0 34, December 1^77.
-------
EXHIBIT 10-8
U.S. Environmental Protection Agency
DIAGRAM OF A LARGE APPLIANCE COATING LINE
DIRECT TO METAL TOPCOAT
Source: Control Of Volatile Organic Emissions From Existing Stationary Sources--Volume V: Surface Coating Of
Large Appliances, EPA-450/2-77-034, December 1977.
-------
10.4 EMISSIONS AND CURRENT CONTROLS
This section presents information on the distribution of VOC
emissions during the coating operation, the estimated VOC emis-
sions in Tennessee in 1977 and the current level of emission con-
trol implemented in the state.
VOC emissions occur in three areas during the process of
coating large appliances. They are the application, flashoff and
oven areas. The percent distribution of VOC emissions by area
is as follows:
Percent of VOC Emission
Application
Application
Method
and Flashoff
Oven
Dip
50
50
Flow coat
60
40
Spray
80
20
Applicability of RACT to meet the 2.8 pounds of solvent per
gallon of coating (minus water) for current operations would
provide emission reduction of 80 percent for primecoating and
60 percent for topcoating. Assuming equal emissions for both
coating operations, this leads to an average emissions control
efficiency with RACT of 70 percent.
Exhibit 10-9, on the following page, shows the total esti-
mated emissions in tons per year from coaters of major appliances
in Tennessee. The Tennessee EPA and Booz, Allen study team
estimated emissions in Tennessee from 20 appliance coating
facilities are 3,323 tons per year.
10.4.1 RACT Guidelines
The RACT guidelines for control of VOC emissions from the
surface coating of major appliances require the following:
Use of waterborne, high solids (at
least 62 percent by volume) or powder
coating to reduce VOC emissions, or
Use of add-on control devices, such as
incinerators or carbon adsorbers.
Exhibits 10-10, 10-11 and 10-12, following Exhibit 10-9,
summarize the RACT emission limitations and control options for
VOC emissions control for surface coating of large appliances.
10-9
-------
EXHIBIT 10-9
U.S. Environmental Protection Agency
RACT DATA SUMMARY FOR ESTIMATED VOC EMISSIONS FOR
SURFACE COATING OF LARGE APPLIANCES IN STATE OF TENNESSEE
Facility Name
1977 Average
Hydrocarbon
Emi3sions
(Ton/Year)
Average Control
Efficiency
with RACT
(Percent)
Potential Emission
Reduction
with RACT
(Ton/Year)
Amana Refrigeration 116 70 81
Athens Stove Works 78 70 55
Brown Stove Works*3 119 70 83
Carrier3 102 70 71
Carrier 307 70 215
Duo-therm 63 70 44
General Electric 109 70 76
Gray & Dudley Co.3*3 87 70 61
Hardwick Stove 86 70 60
Heil Quaker3 260 70 182
ITT Nesbitt 113 70 79
Magic Chef 278 70 195
Modern Maida 306 70 214
Mor-Flo Industries 228 70 160
State Industries 545 70 382
Suburban Manufacturing 104 70 73
Tappan Company 46 70 32
Trane Company 183 70 128
58 70 41
U.S. Stove Company3 122 70 85
W. L. Jackson3 13 9
Total 3,323 2,326
Total 3,323 2,326
a. Facilities located in urban nonattainment counties
b. Emissions estimated by Booz, Allen based on number of employees
Source: Tennessee EPA; Tennessee Directory of Manufacturers, 1978, Booz, Allen & Hamilton Inc.
-------
EXHIBIT 10-10
U.S. Environmental Protection Agency
EMISSION LIMITATIONS FOR RACT IN THE
SURFACE COATING OF LARGE APPLIANCES
Recommended Limitations For
Low Solvent Coatings
Affected
Facility
kg solvent per liter
of coating
(minus water)
lbs. solvent per gallon
of coating
(minus water)
Prime, single
or topcoat
application
area, flash-
off area and
oven 0.34 2.8
Source: Control of Volatile Organic Emissions from Stationary
Sources—Volume V: Surface Coating of Large Appliances,
EPA-450/2-77-0 34, December 1977.
-------
EXHIBIT 10-11
U.S. Environmental Protection Agency
SUMMARY OF APPLICABLE CONTROL TECHNOLOGY FOR
COATING OF LARGE APPLIANCE DOORS, LIDS,
PANELS, CASES AND INTERIOR PARTS
Waterborne
Source: Control of Volatile Organic Emissions from Existing Stationary Sources—Volume V: Surface Coating
of Large Appliances, ErjA-450/2-77-034, December 1977.
-------
Affected Facility Typical Percent
and Application Control Options Reduction
Prime or interior Waterborne 90-95a
single coat (electrodeposition,
EDP)
All applications
Waterborne (spray
dip or flow coat)
70-9Qa
EXHIBIT 10-12(1)
U.S. Environmental Protection Agency
RACT CONTROL OPTIONS FOR THE
LARGE APPLIANCE INDUSTRY
Comparison of Control Optiona
Provides excellent coverage corrosion protec-
tion and detergent resistance
Fire hazards and potential toxicity are reduced
Dry off oven may be omitted after cleansing if
an iron-phosphate pretreatment is used
Lower energy consumption via lower ventilation
requirements
Good quality control due to fully automated
process may be offset by increased electrical
requirements for the coating, refrigeration
and circulation systems if EDP replaces
waterborne flow or dip coating operations
This would not be true if EDP replaces a
spraying operation
EDP can be expensive on small-scale production
lines
This will likely be the first option considered
because of the possibility that these
coatings can be applied essentially with
existing equipment
Requires a longer flash-off area than organic
solvent-borne coatings
Curing waterborne coatings may allow a de-
crease in oven temperature and some reduc-
tion in airflow but limited reduction if
high humidity conditions occur
-------
Affected Facility Typical Percent
and Application Control Options Reduction
Top, exterior or Powder 95-99a
interior single
coat
EXHIBIT 10-12(2)
U.S. Environmental Protection Agency
Comparison of Control Optlona
Spraying electrostatically requires electrical iso-
lation of the entire system. Large lines may
be difficult to convert because coating storage
areas may be hundreds or thousands of feet away
from the application, area
Dip or flow coating application requires closer
monitoring due to their sensitive chemistry
Weather conditions affect the application, so both
flash-off time, temperature, air circulation and
humidity must be frequently monitored
Changes in the number of nozzles may be required
Sludge handling may be more difficult
No solid or liquid wastes to dispose of
Powder may reduce energy requirements in a spray
booth and the ovens because less air is required
than for solvent-borne coatings and flash-off
tunnel is eliminated
Powder can be reclaimed resulting in up to 98%
coating efficiency
All equipment (spray booths, associated equipment
and often ovens) used for liquid systems must be
replaced
Powder films cannot be applied in thicknesses in
less than 2 mils and have appearance limita-
tions
Powder coatings may be subject to explosions
Excessive downtime (ha 1 f-"-hour) is required during
color changes. If powders are not reclaimed
in their respective colors, coating usage
efficiency drops to 50% to 60%
-------
EXHIBIT 10-12(3)
U.S. Environmental Protection Agency
Affected Facility
and Application
Top or exterior single
coat and sound
deadener
Control Options
High solids (spray)
Typical Percent
Reduction
60-80a
Prime, single of top
coat application
and flash-off and
spray booths
Carbon adsorption
90*
Ovens
Incineration
90
b.
The base case against which these percent reductions were
calculated is a high organic solvent coating which con-
tains 25 volume percent solids and 75 percent organic
solvent. The transfer efficiencies for liquid coatings
were calculated to be BO percent, for powders about 93
percent and for electrodepoaition about 99 percent.
This percent reduction in VOC emissions is only across the
control device and does not take into account the capture
efficiency. r
Comparison of Control Options
May be applied with existing equipment
Reduces energy consumption because it requires
less airflow in the spray booth, oven and
flash-off tunnel
Potential health hazard associated with iso-
cyanates used In some high-solid two-component
systems
Although it is technically feasible, no larger
appliance facilities are known to use carbon
adsorption
Additional energy requirements is a possible
disadvantage
Additional filtration and scrubbing of emissions
from spray booths may be required
There is little possibility of reusing recovered
solvents because of the variety of solvent
mixtures
Many facilities may require dual-bed units which
will require valuable plant space
Particulate and condensible matter from
volatilization and/or degradation of resin
occuring in baking ovens with high temperature
could coat a carbon bed
These are less costly and more efficient than
carbon adsorbers for the baking ovens because
the oven exhaust temperatures are too high foe
adsorption and the high concentration of organics
in the vapor could provide additional fuel for
the incinerator
Heat recovery system to reduce fuel consumption
would be desirable and would make application
and flash-off area usage a viable option
Control of Volatile Organic Emissions from Stationary ijource9--Vol ume V: Surface Coatinqs of l.arae Aonliances
CPA^45(5/2-7,?-(534r ^'
-------
10.4.2 Selection of the Most Likely RACT Alternatives
The choice of application of control alternatives, for the
reduction of hydrocarbon emissions in existing facilities for
the surface coating of large appliances, requires a line-by-line
evaluation. A number of factors must be considered, based on
the individual characteristics of the coating line to be con-
trolled. The degree of economic dislocation is a function of
these factors.
The first factor to be considered is whether the existing
equipment can be used by the substitution of a coating material
which will meet the RACT guideline. This alternative would re-
quire the least capital expenditure and minimize production
downtime.
If the existing equipment has to be modified, replaced
or added to, factors to consider are the kinds of changes that
have to be made, the capital costs, the change in operating
costs, the length of time needed to make the changes, the
effect on the production rate, the operational problems that
will have to be handled and the effect on the quality of the
product.
Interviews with industry representatives from economic
impact studies completed in Region V and in Region IV indicate
an unanimous opinion in the area of choosing the alternative(s)
for VOC emission control in coating large appliances. The
industry intends to use their existing topcoat application
equipment and modify it to handle high solids. Those companies
that use a primecoat will convert their conventional enamel
systems to either waterborne dip or flow coat or high solids
discs, bells or spray guns. The alternatives are shown in
Exhibit 1013, on the following page.
Those unique applications, where conversion from conven-
tional enamel to waterborne coatings requires the implementation
of technology alternatives other than the ones stated above (i.e.,
electrodeposition), will be addressed in this study on an indi-
vidual basis, as the information is made available from industry
interviews.
10-10
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EXHIBIT 10-13
U.S. Environmental Protection Agency
MOST LIKELY RACT CONTROL ALTERNATIVES FOR
SURFACE COATING OF LARGE APPLIANCES
IN STATE OF TENNESSEE
Coat
Prime
Existing System
Dip or flow coating with
conventional solvent
Most Likely Alternative Control Techniques
Dip or flow coating with waterborne solvent
Electrostatic application with discs or
bells of high solids coatings
Preheat, paint, or
Use high speed discs or bells
Electrodepositiona
Top
Electrostatic application
with discs, bells or guns
of conventional solvents
Electrostatic application with discs,
bells or spray nozzles of high solids
coating
Preheat paint, or
Use high speed discs or bells
a. Only for applications where conversion to waterborne flow coating will not meet the
minimum coverage specifications originally provided by conventional enamel flow coating.
Source: Booz, Allen & Hamilton Inc.
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10.5 COST AND VOC REDUCTION BENEFIT EVALUATIONS FOR THE
MOST LIKELY RACT ALTERNATIVES
Costs for the VOC emission control systems are presented
in this section. The costs for the alternative primecoat
and topcoat applications are described individually. The
final section presents an extrapolation of typical costs for
surface coating of large appliances to the statewide industry.
10.5.1 Costs for Alternative Control Systems
Estimates of capital and annualized costs are presented
for controlling solvent emissions from application areas and
curing ovens in primecoats and topcoats of large appliances.
The process modifications involve the converting of a
solventborne primecoat or topcoat line to a coating system
which emits lesser amounts of VOC. The coating lines and
the costs for their modification are shown in Exhibit 10-14,
on the following page.
If an existing primecoat conventional-solvent-based
dip operation is converted to waterborne dip, the capital
costs cover the requirements for additional equipment for
close humidity and temperature control during flashoffs and
for changeover to materials handling system (pumps and
piping) that can handle waterborne coatings without corrosion
related problems. Based on these assumptions, the capital
installed cost of these modifications is estimated at between
$50,000 and $75,000. No additional floor space is required
so the capital allocated building costs remain unchanged.
The fixed costs associated with the increased capital requirements
are estimated at between $15,000 and $20,000. This includes
depreciation, interest, taxes, insurance, administration expenses
and maintenance materials.
For the conversion of primecoat or topcoat solvent-
based electrostatic disc bell or nozzle spray to high solids,
the cost of such conversion is based on a number of assumptions:
that the paint will have to be preheated to reduce the viscosity
prior to application, that the existing pumping system will
have to be replaced (including the installation of larger
capacity/head pumps and large diameter piping) and that high
speed (25,000 to 50,000 RPM) turbine or air drive discs or
bells or larger diameter nozzles will be required. Also, it
is assumed that the type of booth remains unchanged and that
the existing painting configuration (including the proper
indexing layout) requires no change.
10-11
-------
Existing System
Most Likely
Control Alternative
Primecoat
Conventional Waterborne dip of
solvent-based flow coat
dip or flow
Electrodeposition
Conventional High solids
solvent-based electrostatic
electrostatic
spray, disc
or bell
Topcoat
Conventional High solids
solvent-based electrostatic
electrostatic
spray, disc
or bell
Source: boo;:, Allun t> Hamilton Inc.
EXHIBIT 1Q-14
U.S. Environmental Protection Agency
ESTIMATED COST FOR PROCESS MODIFICATION
OF EXISTING LARGE APPLIANCE COATING LINES
TO MEET RACT GUIDELINES FOR VOC EMISSION CONTROL
Major Process
Modification
Capital Cost
Instrumentation for close
control of temperature and
humidity
Total repiping and replace-
ment of pumps
Replace existing system
with EDP equipment
(including washing;
ultrafiltration;
deiomzation)
Pre-heating system
Installation of high
disc or bells
Replacement; of spray
nozzles
Repiping for larger
line sizes and possible
coatings pump replace-
ments
Installed capital
550,000 - $75,000
Annualized cost
515,000 - 520,000
Installed capital
5300,000 - $500,000
Annualized cost
$75,000 - $125,000
Installed capital
550,000 - $75,000
Annualized cost
$15,000 - $20,000
Major revamp of booth
line configuration
and air handling system
in addition to changes
stated above
Installed capital
$150,000 - $250,000
Annualized cost
$37,000 - $63,000
Preheating system
Installation of high
speed disc or bells
Replacement of spray
nozzles
Repiping for larger
line sizes and possible
possible coatings
pump replacement
Installed capital
$50,000 - $75,000
Annualized cost
515,000 - $20,000
Major revamp of booth
configuration and air
handling system in
addition to changes
stated above
Installed capital
$750,000 - $250,000
Annualized cost
$37,000 - $63,000
-------
Based on these assumptions, the capital installed cost of
these modifications is estimated at between $50,000 and
$75,000. No additional floor space is required so the capital
allocated building costs remain unchanged. The fixed costs
associated with the increased capital requirements are
estimated at between $15,000 and $20,000. This includes
depreciation, interest, taxes, insurance, administration
expenses and maintenance materials.
Each paint application conversion to meet RACT has its
own unique characteristics. Where such conversions require
major changes in booth structure, paint application techniques
and air handling system, the costs will be considerably higher
than the figures stated above. A first pass estimate at these
major changes indicates a capital requirement of $150,000
to $250,000 per booth. The annualized costs would be $37,000
to $63,000.
In special applications areas, such as the primecoating
of air conditioner cases, the conversion to waterborne
dipcoating will not meet the minimum coverage requirements
previously provided by conventional enamel dipcoating. In
this case, the conversion to electrodeposition primecoating
and high solids topcoating may be necessary both to meet RACT
and to provide adequate exposure protection for the product.
The cost of electrodeposition, as developed by Springborn
Laboratories (under EPA contract number 68-02-2075) , is estimated
at $500,000 capital installed. The annualized costs would be
approximately $125,000.
The annual operating expenses will not change appreciably
because the manpower requirements remain the same for the
two systems. There will be a minor savings in the utilities,
associated with the oven curing of the high solids coating.
This could amount to about $1 per hour of operation time
($2,000 to $6,000 per year per line (equivalent to 700 cubic
feet of natural gas/hour/line).
The overall cost of coating materials may increase slightly
even though conversion to water-based or high solids coating
will eliminate the need for solvent thinning. This overall
increase is expected because of the anticipated price increases
in the coatings that will be required to meet the RACT guidelines.
At this time, definitive numbers in change of paint prices cannot
be developed but an overall paint cost increase of between110
percent and 20 percent may be anticipated.
10-12
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10.5.2 Extrapolation to the Statewide Industry
Exhibit 10-15, on the following page, extrapolates the
costs for meeting RACT guidelines for VOC emission control
for surface coating of large appliances to the statewide industry
in Tennessee. The estimates are based on the following assumptions:
All large appliance coaters will imple-
ment the control alternatives stated in
this report to comply with RACT.
The distribution of primecoat or topcoat
or both as applications, as per industry
interview, is: 50 percent of the coaters
topcoat only; the other half both primecoat
and topcoat the appliances, unless specific
information was available for individual
facilities.
50 percent of the topcoat applications
require major modifications to meet RACT.
For those companies that coat household
air conditioners, the number of the processing
lines was estimated based on typical emissions
from other states studied, and the lines require
installation of both electrodeposition primecoat
and high solids topcoat application equipment.
The 20 plants identified by the Tennessee
EPA and Booz, Allen represent the majority
of all the state industry production of
large appliances.
For the specific alternatives listed in
Exhibit 10-14, the cost of process modifica-
tions for the prime or top coat operations are
the same.
Actual costs to large appliance coaters may vary depending
on the type of control alternative, manufacturer's equipment
and coating material selected by each manufacturing facility.
Based on the above assumptions, the total capital cost
to the industry in Tennessee for process modifications to meet
RACT guidelines is estimated at $6.6 million. The annual cost
is estimated at $66 3 to $694 per ton of emission controlled.
10-13
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EXHIBIT 10-15
U.S. Environmental Protection Agency
STATEWIDE COSTS FOR PROCESS MODIFICATIONS OF
EXISTING LARGE APPLIANCE COATING LINES
TO MEET RACT GUIDELINES FOR VOC EMISSION CONTROL
TENNESSEE
Characteristic
Number of applications
Estimated value of shipment
($ bi J1 ion)
Uncontrolled emissions (tons/year)
Potential, emission reduction
(tons/year)
lnsLolled capital cost^
($ thousand)
Direct annual operating cost
(credit) ($ tltousand) (1-3 shifts
per day)
Annual capital charges
($ thousand)
Net annualized costsc
($ thousand)
Annual cost per ton of emission
reduced ($)
Flow Or
Dip Coat Operations
Converting To Waterborne
Flow Or Spray Spray
Dip Coat Operations Operations Requiring Operations Requiring
To Electrodcpositlon Average Modifications Major Modifications
7 11 7
525
3,500
131
131
875
075
82S
(22-66)
206
140d-184e
1,750
(14-42)
438
396d-4 24e
Total
32
0.9-1.2
4,575
3,202
6,600
(36-100)
1,650
lr54 2d-l,6J4e
663d-694°
a. tiot available
b. Figures represent the upper limit of the installed capital costs.
c. Net annualized cost is the summation of the direct annual operating cost and the annual capital chatgos.
d. Represents a three shifL per day operation.
e. Represents a one shift per day operation.
Source: Booz, Allen fi Hamilton Inc.
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10.6 DIRECT ECONOMIC IMPACTS
This section presents the direct economic impacts of
implementing the RACT guidelines for surface coating of large
appliances on a statewide basis. The analysis includes the
availability of equipment and capital; feasibility of the con-
trol technology; and impact on economic indicators, such as
value of shipments, unit price (assuming full cost passthrough),
state economic variables and capital investment.
10.6.1 RACT Timing
There are three RACT final compliance schedules for Tennessee.
They are as follows:
Low solvent coating implementation by
September 1, 1981
Equipment modification implementation by
November 1, 1981
Add-on control system implementation by
November 1, 1981.
The timing requirements of RACT impose several requirements
on major appliance coaters:
Determine the appropriate emission control
system.
Raise or allocate capital to purchase
equipment.
Acquire the necessary equipment for emission
control.
Install and test the emission control
equipment to insure that the system complies
with RACT.
Generate sufficient income from current
operations to pay the additional annual
operating costs incurred with emission
control.
The sections which follow discuss the feasibility and the
economic implications of implementing RACT within the required
timeframe.
10.6.2 Technical Feasibility Issues
Technical and economic feasibility issues of implementing
the RACT guidelines are discussed in this section.
10-14
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Only one major appliance manufacturer interviewed for
economic impact studies for Region V and Region IV has attempted
to implement the control alternatives discussed in this
report. The company has converted its conventional solvent
flow primecoat to water reducible flow coat. Although a
longer flash-off period for water reducible coatings is
usually required, there was not enough floor space available
to add the process line. However, additional heating was
added and the flash-off area temperature was elevated to
130°F-180°F. Also, extensive humidity controls had to be
added because of the sensitivity of water reducible finish
to moisture in the flash-off area.
The facility also has attempted the application of medium
solids polyester (55 percent to 60 percent by volume) as a top-
coat, using the existing electrostatic discs. There has been
no attempt at preheating the paint, and the discs have been
run at 2,400 RPM to 3,300 RPM. The unit, as it is presently
constituted, will not apply 62 percent volume solids or higher.
Preheat and/or higher speed disc modifications will have to
be made to handle the more viscous coatings. Under the present
operating conditions, the facility is not meeting the RACT
guidelines for solvent emission control.
The equipment manufacturers interviewed have indicated
that present technology is available to handle and apply high
solids (greater than 62 volume percent solids) using electrostatic
discs or bells. This requires the use of preheaters and high
speed application. In addition, high solids coating material
suppliers indicated that sufficient quantities of paint would
be available to meet the expected market demand. Application
equipment manufacturers have indicated that, even with the
projected demand for their equipment, they can maintain a 10-week
to 12-week delivery schedule. However, we believe that signifi-
cant delivery delay may occur if all appliance coaters require
delivery of such equipment within the same timeframe.
10-15
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10.6.3 Comparison of Direct Cost with Selected Direct
Economic Indicators
The net increase in the annualized cost to the coaters
of large appliances represents approximately 0.15 percent of
the industry's 1977 value of shipments manufactured in the
state. This increase may translate to an approximate cost
increase of $0.40 per unit of household appliance coated;
the average cost of a unit is $18 3.
The major economic impact in terms of cost to individual
companies will be capital related rather from increased annualized
costs. The capital required for RACT compliance could represent
a significant amount of capital appropriations for the companies
affected.
Marginally profitable companies may be affected to a
greater degree, because of the projected increased capital
requirements and inability to pass on these costs through
higher prices.
10.6.4 Selected Secondary Economic Impacts
This section discusses the secondary impact of implementing
RACT on employment, market structure and productivity.
Employment is expected to remain unchanged. Employment would
be reduced if marginally profitable facilities closed, but the
present indication from the industry is that no such closures are
anticipated.
It appears that implementation of the RACT guidelines will
have no significant impact on the present market structure.
The major appliance industry can be characterized as being highly
competitive and manufacturers interviewed state that the regulation
may present some cost inequities to smaller and/or less profitable
production lines, i.e., direct cost increases will probably not
be passed along in the marketplace in the form of a price increase
and could further deteriorate the profit position of marginally
profitable operations.
Productivity for those coaters who are topcoating only
with high solids may be increased if they are able to get more
paint on per unit volume and reduce paint application time.
* * *
Exhibit 10-16, on the following page, presents a summary
of the current economic implications of implementation RACT
for surface coating of large appliances in the state of Tennessee.
10-16
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EXHIBIT 10-16
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR SURFACE COATING OF LARGE
APPLIANCES IN THE STATE OF TENNESSEE
Current Situation
Number of potentially affected
facilities
Indication of relative importance
of industrial section to state
economy
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of VOC control to
meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
RACT timing requirements
Problem area
VOC emission after RACT control
Cost effectiveness of RACT control
Discussion
There are 20 major large appliance manufacturers
and coaters
1977 statewide value of shipments is approxi-
mately $1.0 billion and represents 7 percent of
the estimated 515 billion U.S. value of shipments
of the major appliance industry
3,323 tons per year
Waterborne primecoat and high solids topcoat
Waterborne primecoat and high solids topcoat
Discussion
$6.6 million
$1.6 million which represents 0.15 percent of the
industry's 1977 statewide value of shipments.
Assuming a "direct cost pass-through"—increase
of $0.40/unit for household appliances (based on
a price of $183 per unit appliance)
Reduced natural gas requirements in the curing
operation (equivalent to 3,430 barrels of oil
per year)
No major impact
No major impact
No major impact
Possible problems meeting equipment deliveries and
installation are anticipated
Commercial application of high solids (greater
than 62% by volume) has not been proven
997 tons/year (30 percent of 1977 emission
level)
$680 annualized cost/ton VOC reduction
Source: Eooz, Allen & Hamilton, Inc.
-------
BIBLIOGRAPHY
Appliance, April 1978
Annual Survey of Manufactures, 1976
Census of Manufactures, Industry Machines
and Machine Shops, 1972
Current Industrial Reports, Major Household
Appliances, 1977
Sales and Marketing Management, April 24, 1978
U.S. Environmental Protection Agency, Control of
Volatile Organic Emissions from Existing Stationary
Sources—Volume V: Surface Coating of Large Appliances
EPA-450/2-77-034, December 1977.
Private conversations with:
Association of Home Appliances Manufacturers, Chicago, 111
General Electric Corp., Louisville, Kentucky
-------
11.0
¦THE ECONDMjn rMphr"r< p.,-,
^^EMTATBmWlMiJ^^m!?GRACT FOR
-------
11.0 THE ECONOMIC IMPACT OF IMPLEMENTING RACT FOR
SOLVENT METAL DEGREASING IN THE STATE
OF TENNESSEE1
This chapter summarizes the estimated economic impact
of the implementation of reasonably available control tech-
nology for volatile organic compound emissions from solvent
metal degreasers in Tennessee. Solvent metal degreasing
is the process of cleaning the surfaces of articles to
remove oil, dirt, grease and other foreign material by
immersing the article in a vaporized or liquid organic
solvent. The chapter is divided into five sections:
Specific methodology
Industry statistics
Estimated costs of RACT implementation
Direct economic impacts
Selected secondary economic impacts.
Each section presents detailed data and findings based
on analysis of the RACT guidelines; previous studies of
metal degreasing; interviews with degreaser users, equipment
and material suppliers; and a review of pertinent published
literature.
The proposed state regulations to control VOC emissions from
solvent metal cleaning apply to those facilities with potential
emissions over 25 tons per year in three urban counties
(Davidson, Hamiltion, and Shelby) and over 100 tons per year
in the rural counties in the state.
11-1
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11.1 SPECIFIC METHODOLOGY
11.1.1 Background
Solvent metal cleaning describes those processes using
nonaqueous solvents to clean and remove soils from metal
surfaces. These solvents, which are principally derived
from petroleum, include petroleum distillates, chlorinated
hydrocarbons, ketones and alcohols. Organic solvents, such
as these, can be used alone or in blends to remove water-
insoluble soils for cleaning purposes and to prepare parts
for painting, plating, repair, inspection, assembly, heat
treatment or machining.
Solvent metal cleaning can be divided into three
categories: cold cleaning, open top vapor degreasing and
conveyorized degreasing.
Cold cleaner operations include spraying, brushing,
flushing and immersion of articles in a solvent. The sol-
vent is occasionally heated but always remains well below
its boiling point.
The two basic types of cold cleaners are maintenance
cleaners and manufacturing cleaners. The maintenance cold
cleaners are usually simpler, less expensive and smaller.
They are designed principally for automotive and general
plant maintenance cleaning. Manufacturing cold cleaners
usually give a higher quality of cleaning than maintenance
cleaners do, and are thus more specialized. Manufacturing
cold cleaning is generally an integral stage in metal work-
ing production. There are fewer manufacturing cold cleaners
than maintenance cleaners, but the former tend to emit more
solvent per unit because of the larger size and workload.
Manufacturing cleaners use a wide variety of solvents,
whereas maintenance cleaners use mainly petroleum solvents
such as mineral spirits (petroleum distillates and Stoddard
solvents). Some cold cleaners can serve both maintenance
and manufacturing purposes and are thus difficult to classify.
Cold cleaners are estimated to result in the largest
total emission of the three categories of degreasers be-
cause there are so many of these units (more than 1 million
nationally) and because much of the waste solvent that is
disposed of is allowed to evaporate.
11-2
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Open top vapor degreasers clean only one workload at a
time. They clean through the condensation of hot solvent
vapor on colder metal parts. The condensing solvent both
dissolves oils and provides a washing action to clean the
parts. The selected solvents boil at much lower temperatures
than do the contaminants; thus, the solvent/soil mixture in
the degreaser boils to produce an essentially pure solvent
vapor. One section of the degreaser is equipped with a
heating system that uses steam, electricity or fuel combus-
tion to boil the solvent. As the solvent boils, the dense
solvent vapors displace the air within the equipment. The
upper level of these pure vapors is controlled by condenser
coils which are supplied with a coolant such as water.
Nearly all vapor degreasers are equipped with a water
separator which allows the water (being immiscible and less
dense than solvents) to separate from the solvent and decant
from the system while the solvent flows from the bottom
of the chamber back into the vapor degreaser.
The third category of degreasers is conveyorized de-
greasers. There are several types operating both with cold
and vaporized solvents. The types of conveyorized degreasers
include crossrod, rotating wheels, conveyor belts, and
monorails as well as other systems which convey the parts
through the degreasing medium.
In conveyorized equipment, most, and sometimes all,
of the manual parts handling associated with open top
vapor degreasing has been eliminated. Conveyorized de-
greasers are nearly always hooded or covered. The enclosure
of a degreaser diminishes solvent losses from the system
as the result of air movement within the plant. Conveyor-
ized degreasers are used by a broad spectrum of metal work-
ing industries but are most often found in plants where
there is enough production to provide a constant stream of
products to be degreased.
The EPA has estimated1 that about 1.3 million cold
cleaners operate in the U.S.; about 70 percent are used in
maintenance or service cleaning and 30 percent in manufac-
turing. There are also an estimated 22,200 open top vapor
degreasers and 4,000 vapor conveyorized degreasers. In
1975, estimated emissions in the United States from these
cleaners exceeded 700,000 metric tons, making solvent clean-
ing the fifth largest stationary source of organic emissions.
Control of Volatile Organic Emissions from Solvent Metal Cleaning,
EPA-450/2-77-022, November 1977.
11-3
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As recently as 1974, degreasing operations were exempt
from regulation in 16 states, since they rarely emitted more
than the 3,000 pounds per day of volatile organic compounds
(VOC) which was the regulatory level then in effect in these
states. They could also qualify for exemption by the sub-
stitution of a solvent not considered to be photochemically
active. However, the EPA's current direction is toward
positive reduction of all VOC emissions, and the EPA has
proposed control technology for solvent metal cleaning
operations which can achieve sizeable total VOC emission
reduction. This technology involves the use of proper
operating practices and the use of retrofit control equip-
ment.
Proper operating practices are those which minimize sol-
vent loss to the atmosphere. These include covering de-
greasing equipment whenever possible, properly using solvent
sprays, employing various means to reduce the amount of
solvent carried out of the degreaser on cleaned work,
promptly repairing leaking equipment and most important,
properly disposing of wastes containing volatile organic
solvents.
In addition to proper operating practices, many control
devices can be retrofitted to existing degreasers; however,
because of the diversity in their designs, not all de-
greasers require the same type of control devices. Small
degreasers using a room temperature solvent may require
only a cover, whereas large degreasers using boiling solvent
may require a refrigerated freeboard chiller or a carbon
adsorption system. Two types of control equipment which
will be applicable to many degreaser designs are drainage
facilities for cleaned parts and safety switches and thermo-
stats, which prevent large emissions from equipment malfunc-
tion. These controls, the types of degreasers to which they
can be applied and the expected emission reductions are de-
scribed later in this chapter.
11.1.2 Method of Estimation of the Number of Degreasers
The number of solvent metal degreasers in Tennessee
was determined in three steps. First, the number of degreasers
in the three urban counties (Davidson, Hamilton, and Shelby)
for which no emissions data were available was estimated.
Next, the number of degreasers in the rural counties in which
emissions data for those facilities with potential VOC emis-
sions over 100 tons per year for solvent metal degreasing
were available, was estimated. Finally, the degreasers in
11-4
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the urban and rural counties were aggregated to obtain the
statewide number of degreasers. The methods for estimating
the number of degreasers in the urban and rural counties are
discussed below.
11.1.2.1 Number of Degreasers in Urban Counties
The number of degreasers in the three urban counties
was determined on the basis of a detailed industrywide study
of metal degreasing in the U.S., conducted by the Dow Chemical
Company under contract to the EPA. The results of the study
are reported in: Study to Support New Source Performance
Standards for Solvent Metal Cleaning Operations, Contract No.
68-02-1329, June 30, 1976.
The report was based on a telephone survey of more than
2,500 plants in the metal working industry (SIC groups 25,
33, 34, 35, 36, 37, 38 and 39) with more than 19 employees.
The report presents estimates of the:
Percentage of U.S. plants using solvent degreasing
Percentage of plants using cold cleaners, open
top vapor degreasers or conveyorized cleaners
Average number and type of vapor degreasers used
in these plants
Distribution of these quantities by region.
All of these quantities are further identified by the
eight metal working industries. In the report (based on
the 1972 Census of Manufactures) 15,294 open top and
2,796 conveyorized vapor degreasers were estimated to be
in use in the eight SIC groups; an additional 5,000 to
7,000 open top degreasers were estimated1 to be in use in
1972 in manufacturing or service firms not included in one
of the eight SIC groups or in firms with less than 20
employees.
To determine the number of open top and conveyorized
vapor metal degreasers in the three counties, first the
number of plants with more than 19 employees in each of the
Interviews with Parker Johnson, Vice President, Sales, Baron-
Blakeslee Corp., Cicero, Illinois and with Richard Clement,
Sales Manager, Detrex Chemical, Detroit, Michigan, July 1978.
11-5
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eight SIC groups was determined. The average number of
plants using solvent metal degreasing and the average number
and type of cleaners used per plant were then obtained by
using the factors presented in the Dow report. The results
of these calculations and the factors used are tabulated in
Exhibit 11-1, on the following page. The total number of
open top degreasers was then estimated by multiplying the
number expected to be used in the eight metal working SIC
groups by the ratio of 22,200/15,200 (the ratio of total
open top units in the U.S. to those used in the eight SIC
groups in the U.S.).
Because of their expense and function, conveyorized
vapor degreasing units are most likely to be used in
manufacturing only. Therefore, the total number of these
units in the three urban counties was assumed to be the same
as that calculated for the eight SIC metal working industries.
The total number of conveyorized cleaners, vapor and cold,
was then determined by multiplying the number of vapor con-
veyorized cleaners by 100/85, the EPA1 estimated ratio of
total conveyorized cleaners to vapor conveyorized cleaners
in the U.S.
The number of cold cleaners in the three urban counties
was based on the Dow estimates of cold cleaning done in plants
in the eight SIC metal working industries and the EPA estimate
of 1,300,000 cold metal cleaners in the U.S., which include
390,000 in manufacturing use and 910,000 in maintenance or
service use.2 Then:
The EPA estimates of all cold cleaners in manu-
facturing use in the U.S. was multiplied by
the ratio of the number of plants in the metal
working industries (SICs 25 and 33-39) in the
three counties to the number in the U.S.
Control of Volatile Organic Emissions from Solvent Metal Cleaning,
EPA-450/2-77-022, November 1977.
Cold cleaners in manufacturing use are meant to include only
those cleaners employed in the manufacturing process; cold
cleaners in maintenance and service use are those employed for
this purpose by either manufacturing or service establishments.
11-6
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IN
Item
Number of plants with
more than ^19
employees
Percent of plants
using solvent
degreasing
Number of plants
using solvent
degreasing
Percent of plants
using vapor
degreasing
Number of plants
using vapor
degreasing
Average number of
vapor degreasers
per plant
Number of vapor
degreasers
Percent as ooen top
degreasersc
Number of open top
vapor degreasers^
Number of conveyor]-.zed
vapor degreasers
25 33 34
33 16 100
44 38 40
15 6 40
40 35 34
6 2 14
1.76 1.96 1.44
11 4 20
67 72 72
8 3 15
3 15
EXHIBIT 11-1 (1)
U.S. Environmental Protection Agency
ESTIMATED NUMBER OF VAPOR DEGREASERS
DAVIDSON, HAMILTON, AND SHELBY COUNTIES IN TENNESSEE
SIC GROUPa
35 36 37 38 39 Total
68 34 27 8 24 310
50 53 48 62 37
34 18 13 5 9 140
27 55 36 51 46
9 10 6 3 4 54
1.43 1.80 2.88 2.01 0.90
13 18 17 6 4 93
74 80 80 86 82
10 15 14 5 3 108e
3 3 3 1 1 24f
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EXHIBIT 11-1 (2)
U.S. Environmental Protection Agency
(Tennessee)
NOTE: All data based on plants with more than 19 employees.
a. The SIC Groups are: 25-Metal Furniture; 33-Primary Metals; 34-Fabricated Products; 35-Non-electrical
Machinery; 36-Electrical Equipment; 37-Transportation Equipment; 38-Instruments and Clocks; and
39-Miscellaneous Industry.
b. Source: County Business Patterns, U.S. Department of Commerce, 1976.
c. Source of data on percentage of plants solvent degreasing, those with open top or conveyorized vapor
degreasers and average numbers of degreasers per plant: Study to Support New Source Performance
Standards for Solvent Metal Cleaning Operations, Dow Chemical Company under EPA Contract 68-02-1329,
June 30, 1976.
d. Number of degreasers rounded to the nearest whole integer.
e. To adjust quantities to account for vapor degreasers in other SIC groups multiply by the factor
(22,200/15,200), the ratio of all open top vapor degreasers in U.S. to open top vapor degreasers
in metal working SIC groups.
f. To adjust quantities to include cold conveyorized cleaners, multiply by 100/85, since conveyorized
vapor cleaners are estimated to represent 85 percent of all conveyorized cleaners.
Source: Booz, Allen and Hamilton, Inc.
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The EPA estimates of all cold cleaners in main-
tenance and service use in the U.S. were multi-
plied by the ratio of the number of plants in
the metal working industries plus selected ser-
vice industries (SIC codes 551, 554, 557, 7538,
7539, 7964) for the affected areas to the number
in the U.S. These service industries are expected
to have at least one or more cold cleaners.
SIC 551 applies to industries categorized
as new or used car dealers.
SIC 554 applies to industries categorized
as gasoline service stations.
SIC 557 applies to industries categorized
as motorcycle dealers.
SIC 7538 applies to industries categorized
as general automotive repair shops.
SIC 7539 applies to industries categorized
as automotive repair shops, n.e.c.
SIC 7694 applies to industries categorized
as armature rewinding shops.
The estimates of the total number of cold cleaners in
the three counties obtained by these calculations are tabu-
lated in Exhibit 11-2, on the following page.
11.1.2.2 Number of Degreasers in Rural Counties
The number of degreasers in the rural counties was
determined on the basis of the total VOC emissions of 1,913
tons per year from solvent metal degreasing from 14 manu-
facturing facilities as reported by the Tennessee Department
of Health, Air Pollution Control Division. These facilities
had potential VOC emissions over 100 tons per year from
solvent metal degreasing operations and, therefore, were
affected by the proposed state VOC control regulation.*
The total VOC emissions were first divided among cold
cleaners, open top vapor degreasers, and conveyorized degreasers
in the same proportions as those obtained for manufacturing
There may be additional facilities potentially affected by the
proposed regulation in the rural counties, but this could not
be verified because of the lack of data.
11-7
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EXHIBIT 11-2
U.S. Environmental Protection Agency
ESTIMATED NUMBER OF COLD CLEANERS
IN THREE URBAN COUNTIES IN TENNESSEE
Total number of plants in SIC Groups
25, 33, 34, 35, 36, 37, 38, 39a
Estimated numbe^r of cold cleaners in
manufacturing
Total number of plants in service
industries SIC 551,554,557,7538,7539,7694a
Estimated number of cold cleanerg
in maintenance and service use ,G
Estimated total number of cold cleaners3
U.S.
125,271
390,000
227,350
910,000
1,300,000
Tennessee
811
2,525
1, 523
6,023
8,548
Notes:
a. Source: 1976 County Business Patterns, U.S. Department of Commerce, 1976.
b. Source: Control of VolatiJe Organic Emissions From Solvent Metal Cleaning, EPA-450/2-77-022,
November 1977.
c. This includes cold cleaners in maintenance and service applications in both manufacturing
and repair firms.
Source: Booz, Allen & Hamilton, Inc.
-------
facilities in the three urban counties.-'- These emissions were
then divided by the average emissions per degreasers given in
Exhibit 11-7, (section 11.2.2) to obtain the number of degreasers
in the rural counties.
The number of degreasers estimated from this method
represents the average size degreasers. Since, the poten-
tially affected manufacturing facilities in the rural counties
are large in size, the degreasers used in these facilities
are likely to be larger than the average size, hence fewer in
number than the estimate. However, the total cost of compliance
estimated on the basis of the greater number of average size
degreasers is expected to approximate the cost experienced by
fewer but larger facilities.
11.1.3 Method of Estimation of Affected Degreasers
The proposed state regulations provide several exemptions
for degreasers based on size, type of solvent used or emission
rate.
Facilities located in the three urban counties
with potential emissions less than 25 tons per
year are to be exempt. It is estimated that
this would exempt approximately 90 percent of
the estimated number of cold cleaners in the
three urban counties as shown in Exhibit 11-2.
It is estimated that 30 manufacturing facilities
with an average of 30 cold cleaners per facility
would be potentially affected by the proposed
regulation based on average emission rates per
cold cleaner, average number of cold cleaners per
employee and the distribution of employees per
facility in these counties.
Cleaners used exclusively for chemical or physical
analysis or determination of product quality and
acceptance are to be exempt. Since few such
cleaners exist, no correction was made to the
estimated number of cleaners used in determining
the estimated compliance costs.
Those cleaners using 1,1,1 trichloroethane and tri-
chlorotrifluoroethane are to be exempt. Estimates
of the number of open top degreasers which use
either of these solvents range from 35 percent
to 60 percent.2 For the purpose of calculating
1. The percentages of total VOC emissions from cold cleaners, open
top vapor degreasers, and conveyorized degreasers used in man-
ufacturing facilities in the three urban counties were found
to be 35.6 percent for cold cleaners and 34.1 percent for open
top and 30.3 percent for conveyorized degreasers
2. Based on information in EPA 450/2-77-022, op. cit., and inter-
views with Baron-Blakeslee and Detrex Chemical personnel.
1 1 _ o
-------
cost impacts in this study, 35 percent was used.
About 10 percent of conveyorized cleaners are
expected to be exempt1 and about 20 percent of
cold cleaners.2
Open top vapor degreasers with less than one
square meter (10.8 square feet) air/vapor inter-
face and conveyorized degreasers with less than
two square meters (21.6 square feet) are to be
exempt. This exemption applies to about 30 per-
cent of open top cleaners and 5 percent of convey-
orized degreasers.1
The guidelines leave open to the degreaser user the option
of changing from a nonexempt solvent to an exempt one. In
most cases, this will require some modification of the de-
greaser and an additional expense for the modification. In
this study it was assumed that no substitution is made.
No reliable information has been found which relates
size of cleaner with solvent composition. Therefore, we
have assumed a uniform distribution of solvent composition
with cleaner size, i.e., the number of small cleaners using
exempt solvents is the same as the number of large cleaners
using exempt solvents. For instance, the total of affected
open top vapor degreasers in the state was determined by
multiplying the total number of open top vapor degreasers
in the state by the fractions that are nonexempt by solvent
use and by size, i.e.:
Number exempt by size = (Total number of open top
degreasers) x (Fraction exempt by size, 0.3)
Number exempt by solvent = (Total number of open
top degreasers - number exempt by size) x
(Fraction exempt by solvent, 0.35)
Total number of affected (nonexempt) degreasers =
(Total number of open top degreasers) - (Number
exempt by size) - (Number exempt by solvent)
Based on information in EPA 450/2-77-022, op. cit., and inter-
views with Baron-Blakeslee and Detrex Chemical personnel.
Dow report, op. cit.
11-9
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The resulting estimate of the total number of degreasers
in the county and those exempt from the proposed regulations
by size and solvent composition are summarized in Exhibit
11-3, in section 11.2.
11.1.4 Method of Estimation of Number and Type of Retro-
fitted Controls Needed
The proposed regulations specify certain controls which
can be retrofitted to existing solvent metal cleaners.
These are discussed in detail in a later section of this
chapter. Briefly they are:
For affected cold cleaners
A cover must be installed when the solvent
used has a volatility greater than 15 milli-
meters of mercury at 38°C, or is agitated,
or the solvent is heated; and
An internal drainage facility (or, where
that is not possible, an external closed
drainage facility) must be installed, such
that the cleaned parts drain while covered
when the solvent used has a volatility greater
than 32 millimeters of mercury at 38°C; and
Where the solvent has a volatility greater
than 32 millimeters of mercury at 38°C, a
freeboard must be installed that gives a
freeboard ratio (i.e., distance from cleaner
top to solvent surface divided by cleaner
width) greater than or equal to 0.7; or a
water cover where the solvent is heavier and
immiscible or unreactive with water; or some
other system of equivalent control.
For affected open top vapor degreasers—
The vapor degreaser must be equipped with
a cover; and
A spray safety switch must be installed
which shuts off the spray pump when the
vapor level drops more than 4 inches; and
11-10
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If the freeboard ratio is greater than 0.75,
a powered cover must be installed or a re-
frigerated chiller; or an enclosure in which
a cover or door opens only when the dry part
is entering or exiting the degreaser; or a
carbon adsorption system; or an equivalent
control system.
For affected conveyorized degreasers—
A refrigerated chiller; or carbon adsorption
system; or another equivalent control system
must be installed; and
The cleaner must be equipped with a drying
tunnel or rotating basket to prevent cleaned
parts from carrying out solvent; and
A condenser flow switch and thermostat, a
spray safety switch and a vapor high level
control thermostat must be installed; and
Openings must be minimized during operation
so that entrances and exits silhouette work-
loads ; and
Downtime covers must be provided for closing
off the entrance and exit during shutdown
hours.
Exhibits 11-14, 11-15 and 11-16 of this chapter summarize
estimates of the percentage of non-exempt cleaners needing
these controls. Equipment manufacturers were the primary
source of the percentages used. In applying this informa-
tion, it was assumed that the number and type of control
needed were independent of size.
11.1.5 Method of Estimation of Current Emissions and
Expected Reductions
Current VOC emissions from solvent metal degreasing
and the reductions anticipated by the enforcement of the
proposed regulations are based on information presented in
Control of Volatile Organic Emissions from Solvent Metal
Cleaning, EPA-450/2-77-022, November 1977. This report
estimates average emissions for each type of degreaser.
The total current emissions were obtained by multiplying
these estimated average emissions by the number of each
type of degreaser in the affected areas of the state.
11-11
-------
The report also estimates the reduction in emissions
possible by implementation of various types of controls.
The methods proposed in recent EPA guidance can result in
reduction of 50 percent to 69 percent for various types of
degreasers. Emission levels which would result from imple-
mentation of the RACT proposals for solvent metal cleaners
was obtained by use of these estimated reductions for the
number of affected cleaners in the state. For purposes of
estimation, a 50 percent reduction was used for cold cleaners.
For open top vapor and conveyorized cleaners, a 60 percent
reduction was used.
11.1.6 Method of Estimation of Compliance Costs
Compliance costs also were based primarily on the cost
data presented in the EPA report, Control of Volatile
Organic Emissions from Solvent Metal Cleaning, for average-
sized, cold, open top vapor and conveyorized cleaners.
These cost data, however, were verified by discussions with
equipment manufacturers. Where some costs, such as for
safety switches or downtime covers, were not estimated in
the report, estimates were made based on further discussions
with equipment manufacturers. In the EPA report, costs were
presented for various retrofit control options; in each case
the control which would provide minimum net annualized costs
was used in the estimates made here. Other costs not pre-
sented in the EPA report were determined as follows:
Safety switches, minimizing conveyorized cleaner
openings, and downtime cover capital costs were
estimated on the basis of discussions with equip-
ment manufacturers. Costs used were:
$300 per manual cover and $100 per safety
switch installation for open top vapor de-
greasers
$250 per safety switch installation, $300
per downtime cover installation, $2,500 per
drying tunnel, and $1,000 for reducing
openings for conveyorized cleaners.
$300 was used as an average cost for increasing
freeboard of cold cleaners using high volatility
solvents.
11-12
-------
Annual capital charges were estimated as 25 percent
of capital costs, to include depreciation, interest,
maintenance, insurance and administrative costs.
Labor costs for mounting downtime covers on con-
veyorized cleaners at shift end were estimated at
$1,500 per year per cleaner.
Additional costs which might result from decreased
productivity, labeling and other requirements of
the proposed regulations were assumed to be small
and negligible.
11-13
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11.1.7 Quality of Estimates
Several sources of information were utilized in asses-
sing the emissions, direct compliance cost and economic
impact of implementing RACT controls on plants using solvent
metal degreasers in Tennessee. A rating scheme is presented
in this section to indicate the quality of the data avail-
able for use in this study. A rating of "A" indicates hard
data, "B" indicates data that was not available in secondary
literature and was extrapolated from hard data (i.e. data
that is published for the base year) and "C" indicates data
was estimated based on interviews, analyses of previous
studies and best engineering judgement. Exhibit 11-2A,
on the following page, rates each study output and over-
all quality of the data.
11-14
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EXHIBIT 11-2A
U.S. Environmental Protection Agency
DATA QUALITY
ABC
"Hard "Extrapolated "Estimated
Study Outputs Data" Data" Data"
Industry statistics X X
Emissions X
Cost of emissions X X
control
Statewide costs of
emissions
Overall quality of X
data
Source: Booz, Allen & Hamilton Inc.
-------
11.2 INDUSTRY STATISTICS
This section summarizes an estimation of the total
number of solvent metal cleaners affected in the state
determined by the methods discussed in section 11.1.2 of
this report. A total of 167 open top vapor degreasers, 44
conveyorized degreasers and 10,612 cold cleaners are estimated
to be in use in Tennessee in manufacturing, maintenance or
service. As discussed earlier, not all of these will be
subject to RACT regulations because of size or solvent exemptions.
About 30 percent of open top vapor degreasers and 5 percent of
conveyorized degreasers are expected to be exempt on the basis
of size. Approximately 90 percent of the cold cleaners will
be exempt because of the 25 ton or 100 ton potential emission
limitations per facility. About 35 percent of open top vapor
degreasers, 10 percent of conveyorized degreasers and 20
percent of cold cleaners are expected to be exempt because they
use exempt solvents methyl chloroform or Freon 113. Applying
these factors results in the total of affected cleaners shown
in Exhibit 11-3, on the following page.
It is difficult to estimate the number of establishments
affected by the regulations, since a plant may have one or
many cleaners of each type. In fact, large-scale users may
have more than 100 degreasing operations in one plant location.
Metal working industries would be major users; eight SIC codes,
25 and 33-39, cover these industries.
These classifications include such indistries as automotive,
electronic, appliances, furniture, jewelry, plumbing, aircraft,
refrigeration, business machinery and fasteners. However, use
of solvent cleaning is not limited to those industries, since
many cleaners are used, for both manufacturing and maintenance,
in nonmetal working industries such as printing, chemicals,
plastics, rubber, textiles, paper and electric power. Also,
most automotive, railroad, bus, aircraft, truck and electric
motor repair stations use metal solvent cleaners at least
part time.
As discussed in Section 11.1.2, it is estimated that
14 facilities in the rural counties and 310 facilities in
the SIC codes 25 and 33-39, with more than 19 employees, in
the three urban counties use solvent metal degreasing.
However, as shown in Exhibit II-2, in section 11.1.2, there
are a total of 811 plants in service industries in the three
urban counties; all of these are expected to have some type
of solvent degreasers and could be potentially affected.
11-15
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EXHIBIT 11-3
U.S. Environmental Protection Agency
ESTIMATE OF AFFECTED SOLVENT METAL
CLEANERS IN TENNESSEE
Number of Cleaners by Type
Exemption
Total number of
cleaners
Number exempt by
size
Number affected
by size
Number further
exempted by type
of solvent used
Total number of
affected cleaners
Cold Open Top Vapor Conveyorized
10,612 167 44
9,712 50 82
900- 117 41
190.. 41 4
720 76 38
Source: Booz, Allan & Hamilton Inc.
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11.2.1 Proposed Emission Control Systems for Solvent
Metal Cleaners
The EPA has proposed two different emission control
methods, A and B, for each of the three types of cleaners:
cold, open top vapor and conveyorized. The control methods
can be combined in various ways to form a number of alter-
native control systems. Generally, control system A con-
sists of proper operating practices and simple, inexpensive
control equipment. Control system B consists of system A
plus other devices that increase the effectiveness of con-
trol. Elements of control systems A or B can be modified
to arrive at the level of control needed. The control sys-
tems are presented in the three exhibits, Exhibit 11-4,
5 and 6, on the following pages, and are briefly discussed
below. In general, use of control system B has been proposed
to maximize emission reductions.
11.2.1.1 Cold Cleaning Control Systems
The most important emission control for cold cleaners
is the control of waste solvent. The waste solvent needs
to be reclaimed or disposed of so that a minimum evaporates
into the atmosphere. Next in importance are the operating
practices of closing the cover and draining cleaned parts.
Several other control techniques become significant only
in a small fraction of applications.
The difference in effect between systems A and B
(Exhibit 11-4) is not large because most of the cold cleaning
emissions are controlled in system A. If the requirements
of system A were followed conscientiously by nearly all of
the cold cleaning operators, there would be little need
for the additional system. B requirements. However, because
cold cleaning operators tend to be lax in keeping the cover
closed, equipment requirements #1 and #4 in system B are
added. Similarly, the modifications for #2 and the equip-
ment requirements in #3 would effect significant emission
reductions in a few applications.
The effectiveness of the control systems depends
greatly on the quality of operation. On the average, system
A is estimated to be able to reduce cold cleaning emissions
by 50 (± 20) percent and system B may reduce it by 53
(± 20) percent. The low end of the range represents the
emission reduction projected for poor compliance, and the
high end represents excellent compliance. The expected
benefit from system B is only slightly better than that for
11-16
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EXHIBIT 11-4
U.S. Environmental Protection Agency
CONTROL SYSTEMS FOR COLD CLEANING
Control System A
Control Equipment:
1. Cover
2. Facility for draining cleaned parts
3. Permanent, conspicuous label, summarising the operating requirements
Operating Requirements:
1. Do not dispose of waste solvent or transfer it to another party, such as that greater than 20 percent
of the waste (by weight) can evaporate into the ataospnere.* Store waste solvent only in covered containers.
2. Close degreaser cover whenever not handling parts m the cleaner,
3. Drain cleaned parts for at least 15 seconds or until dripping ceases.
Control System B
Control Equipment:
1. Cover: Same as m System A, except if (a) solvent volatility is greater than 2 Kpa (15 mm Hg or 0.3 psi)
measured at 38*C (100°F),** (b) solvent is agitated, or (c) solvent is neated, then the cover must be designed so
that it can be easily operated with one hand. (Covers for larger degreasers may require mechanical assistance, by
spring loading, counterveignting or powered systems.)
2. Drainage facility: Same as m System A, except that if solvent volatility is greater than about 4.3 Kpa
(32 nn Hg or 0.6 osi) measured at 38aC (100®F), then the drainage facility must be internal, so that parts are
enclosed under the cover while draining. The drainage facility may be external for applications where an internal
type cannot fit into the cleaning system*
3. Label: Sane as in System A
4. If used, the solvent spray must be solid, fluid stream (not a fine, atomized or shower type spray)
and at a pressure which does not cause excessive splashing.
5. Major control device for highly volatile solvents: If the solvent volatility is 4.3 Kpa (33 mra Hg or
0.6 psi) measured at 33 C (100 F), or if solvent is heated about 50 C (120 F), ther. one of the following control
devices must be used:
a. Freeboard that gives a freeboard ratio4** 0,7
b. Water cover (solvent must be insoluble in and heavier than water)
c. Other systems of equivalent control, such as refrigerated cniller or carbon absorption.
Operating Requirements:
Same as m System A
* Water and solid waste regulations must also be complied with
** Generally solvents consisting primarily of nineral spirits (Stoddard) have volatilities 2 Kpa.
*** Freeboard ratio is defined as the freeooard height divided by the width of the degreaser.
Source: EPA-450/2-77-022, op. cit.
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EXHIBIT 11-5(1)
U.S. Environmental Protection Ayency
EPA PROPOSED CONTROL SYSTEMS FOR OPEN TOP VAPOR DEGREASERS
Control System'A
Control Equipment:
1. Cover that can be opened and closed easily without disturbing the vapor zone„
Operating Requirements:
1D Keep cover closed at all times except when processing work loads through the degreaser.
2. Minimize solvent carry-out by the following measures:
a. Rack parts to allow full drainage.,
b. Move parts in and out of the degreaser at less than 3.3 m/sec (11 ft/min)„
c„ Degrease the work load in the vapor zone at aleast 30 sec. or until condensation ceases.
d. Tip out any pools of solvent on the cleaned parts before removal.
e. Allow parts to dry within the degreaser for at least 15 sec. or until visually dry.
3. Do not degrease porous or absorbent materials, such as cloth, leather, wood or rope.
4„ Work loads should not occupy more than half of the degreaser's open top area.
5. The vapor level should not drop more than 10 cm (4 in) when the work load enters the vapor zone.
6. Never spray above the vapor level.
7. Repair solvent leaks immediately, or shut down the degreaser.
8. Do not dispose of waste solvent or transfe;
waste (by weight) will evaporate into the atmosphere.
9. Exhaust ventilation should not exceed 20 m
necessary to meet OS1IA requirements. Ventilation fans
10. Water should not be visually detectable in
¦ it to another party such that greater than 20 percent of the
Store waste solvent only in closed containers.
1 9 2
/inin per m (65 cfm per ft ) of degreaser open area, unless
should not be near the degreaser opening.
solvent exiting the water separator.
Control System U
Control Equipment:
1. Cover (same as in system A).
2.. Safety switches
a. Condenser flow switch and thermostat - (shuts off sump heat if condenser coolant is either not circulating
or too warm) .
b„ Spray safety switcli - shuts off spray puinp if the vapor level drops excessively, about 10 cm (4 in) .
-------
EXHIBIT 11-5 (2)
U.S. Environmental Protection Agency
3. Major Control Device:
Either: a. Freeboard ratio greater than or equal to 0.75, and if the degreaser opening is
lm2 (10 ft2), the cover must be powered,
b. Refrigerated chiller,
c. Enclosed design (cover or door opens only when the dry part is actually entering or
exiting the degreaser),
d. Carbon adsorption system, with ventilation 15 m3/min per m2 (50 cfm/ft2) or air/vapor
area (when cover is open), and exhausting 25 ppm solvent averaged over one complete adsorption cycle, or
e. Control system, demonstrated to have control efficiency, equivalent to or better than
any of the above..
4. Permanent, conspicuous label, summarizing operating procedures 01 to #6.
Operating Requirements:
Same as in System A.
Source: EPA-450/2-77-022, op. cit.
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EXHIBIT 11-6
U.S. Environmental Protection Agency
EPA PROPOSED CONTROL SYSTEMS FOR CONVEYORIZED DEGREASERS
Control System A
Control Equipment: None
Operating Requirements:
1. Exhaust ventilation shouLd not exceed 20 m3/roiri per m2 (65 cfm per ft2) of degreaser opening,
unless necessary to meet OSHA requirements. Work place fans should not be used near the degreaser opening.
2. Minimize carry-out emissions by:
a. Racking parts for best drainage.
b. Maintaining verticle conveyor speed at 3.3 ra/min (11 ft/min).
3. Do not dispose of waste solvent or transfer it to another party such that greater than 20 percent
of the waster (by weight) can evaporate into the atmosphere. Store waste solvent only in covered containers.
4. Repair solvent leaks immediately, or shut down the degreaser.
5. Water should not be visibly detectable in the solvent exiting the water separator.
Control System B
1. Major control devices; the degreaser must be controlled by either:
a. Refrigerated chiller,
b. Carbon adsorption system, with ventilation 15 m2/min per m^ (50 cfm/ft2) of air/vapor area (when down-time
covers are open), and exhausting 25 ppm of solvent by volume averaged over a complete adsorption cycle, or
c. System demonstrated to have control efficiency equivalent to or better than either of the above.
2. Either a drying tunnel, or another means such as rotating (tumbling) basket, sufficient to prevent cleaned parts
from carrying out solvent liquid or vapor.
3. Safety switches
a. Condenser flow switch and thermostat - (shuts off sump heat if coolant is either not circulating or too warm).
b. Spray safety switch - (shuts off spray pump or cenveyor if the vapor level drops excessively, e.g. 10 cm (4 in.)).
c. Vapor level control thermostat - (shuts off sump heat when vapor level rises too high).
4. Minimized openings: Entrances and exits should silhouette work loads so that the average clearance (between
parts and the edge of the degreaser opening) is either 10 cm (4 in.) or 10 percent of the width of the opening.
5. Down-time covers: Covers should be provided for closing off the entrance and exit during shutdown hours.
Operating Requirements:
J. to 5. Same as the System A
6. Down-time cover must be placed over entrances and exits of conveyorized degreasers immediately after the
conveyor and exhaust are shut down and removed just before they are started up.
Source: ElJA-450/2-77-022, op. cit.
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system A for an average cold cleaner because the additional
devices required in system B generally control only bath
evaporation, about 20 to 30 percent of the total emission
from an average cold cleaner. . For cold cleaners with high
volatility solvents, bath evaporation may contribute about
50 percent of the total emission; EPA estimates that system
B could achieve 69 (± 20) percent control efficiency, whereas
system A might achieve only 55 (± 20) percent.
11.2.1.2 Open Top Vapor Degreasing Control Systems
The basic elements of a control system for open top
vapor degreasers are proper operating practices and use
of control equipment. There are about ten main operating
practices. The control equipment includes a cover, safety
switches and a major control device, either high freeboard,
refrigerated chiller, enclosed design or carbon adsorption
as outlined in Exhibit 11-5.
A vapor level thermostat is not included because it
is already required by OSHA on "open surface vapor de-
greasing tanks." Sump thermostats and solvent level controls
are used primarily to prevent solvent degradation and pro-
tect the equipment and thus are also not included here.
The emission reduction by these controls is a secondary
effect in any event. The two safety switches serve pri-
marily to reduce vapor solvent emissions.
EPA estimates that system A may reduce open top vapor
degreasing emissions by 45 (±15) percent, and system B
by 60 (±15) percent. For an average-sized open top vapor
degreaser, systems A and B would reduce emissions from 9.5 m
tons/year down to about 5.0 and 3.8 m tons/year, respec-
tively. It is clear that system B is appreciably more effec-
tive than system A.
11.2.1.3 Conveyorized Degreasing Control Systems
Control devices tend to work most effectively on con-
veyorized degreasers, mainly because they are enclosed.
Since these control devices can usually result in solvent
savings, they often will net an annualized profit. Two
control systems for conveyorized degreasers as recommended
by EPA are shown in Exhibit 11-6. Control system A requires
only proper operating procedures which can be implemented,
in most cases, without large capital expenditures. Control
system B, on the other hand, requires a major control device.
11-17
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Major control devices can provide effective and econom-
ical control for conveyorized degreasers. A refrigerated
chiller will tend to have a high control efficiency, be-
cause room drafts generally do not disturb the cold air
blanket. A carbon adsorber also tends to yield a high con-
trol efficiency, because collection systems are more effec-
tive and inlet streams contain higher solvent concentrations
for conveyorized degreasers than for open top vapor degreasers.
11.2.2 Emissions and Expected Emission Reduction
In Exhibit 11-7, on the following page, are summarized
the average emissions from solvent metal degreasers by type
and also the percent emission reduction expected by imple-
mentation of Type B method of controls on nonexempt de-
greasers. The levels are based on estimated emissions as
presented in the previously referenced EPA report (EPA
450/2-77-022) and represent current average emission levels
and expected reductions achievable if emission controls are
rigorously enforced. For estimation, 50 percent reduction
was used for cold cleaners and 60 percent for open top vapor
and conveyorized degreasers.
Exhibit 11-8, following Exhibit 11-7, presents the
estimated current emissions from solvent metal degreasing
and the expected emissions if the B methods of control are
implemented for metal cleaners and proposed exemptions for
size and type of solvent are implemented. As shown, emis-
sions are expected to be reduced from about 6,646 short tons
per year to a total of 5,348 short tons per year. The major
portion of these reduced emissions, 44 3 tons, are from
solvent metal cleaners exempt from the proposed RACT regu-
lations either by size or by the nature of solvent used.
Implementation of the regulations will reduce emissions by
1,29 8 tons per year.
11-18
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EXHIBIT 11-7
U.S. Environmental Protection Agency
AVERAGE UNIT EMISSION RATES AND EXPECTED
EMISSION REDUCTIONS
EMISSION RATES WITHOUT CONTROLS
Averaged Emission Rate
Type of Degreaser Per Unit (short tons/yr.)
Cold cleaners, batch a 0.33
Open top vapor degreaser 11.00
Conveyorized degreaser 29.70
PERCENT EMISSION REDUCTION EXPECTED WITH TYPE B CONTROLS
Type of Degreaser
Cold cleaner, batch
Low volatility solvents
High volatility solvents
Open top vapor degreaser
Conveyorized degreaser
Percent Emission
Reduction Expected
53 (+ 20)
69 (+ 20)
60 (+ 15)
60 (+ 15)
a. Does not include emissions from conveyorized-type cold cleaners
which represent about 15 percent of all conveyorized cleaners.
Source: EPA-450/2-77-022, op. cit.
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EXHIBIT 11-8
U.S. Environmental Protection Agency
ESTIMATED CURRENT AND REDUCED EMISSIONS FROM
SOLVENT METAL CLEANING IN TENNESSEE
Type of Cleaner
Estimated
Current
Emissions
Estimated
from Nonexempt
Cleaners After
RACT
Estimated
Emissions From
Exempt Cleaners
After RACTa
Estimated
Total
Emissions
After RACTa
Open top vapor
1,837
335
1, 001
1,336
Conveyorized
1,307
451
178
629
Cold
3, 502
119
3.264
3 .38 3
Total
6, 646
905
4,443
5,348
a. Includes emissions from cleaners exempt by size or using 1,1,1-trichloroethane or Freon 1.13
Source: Booz, Allen & Hamilton Inc.
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11.3 ESTIMATED COSTS OF RACT IMPLEMENTATION
As discussed in Section 11.1.6 compliance costs are
based upon EPA estimates of the costs and benefits of various
retrofitted methods of control. These estimates are summar-
ized in Exhibits 11-9 and 11-10, on the following pages.
Costs of implementation of the RACT regulations are
summarized in Exhibits 11-11, 11-12 and 11-13 on the
assumption that control methods B are used to maximize
emission reduction on nonexempt cleaners. Exhibits 11-14,
11-15, and 11-16 summarize the number and type of controls
needed by cleaner type as determined from interviews with
cleaner manufacturers. Total expenditures for all cleaners,
vapor and cold types, are estimated to be about $0.9 million
in capital and about $70 thousand in net annualized costs.
The low net annualized costs result primarily from the
savings in solvent use which the regulations are expected to
provide.
In no case are the regulations expected to present a
severe financial burden to individual firms. The largest
single expenditure would be for retrofitting a monorail
conveyorized degreaser with chiller, switches, drying
tunnel, reduced openings and downtime covers. Total cost
for an average-sized degreaser of about 3.8 square meters
area (40.9 ft2) would be less than $12,500. A large unit,
14 square meters, would cost about $27,000 to $30,000.
Since these conveyorized systems would" only be used in
large plants with large sales volumes, this implementation
cost is not expected to present a hardship to any par-
ticular firm.
11-19
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EXHIBIT 11-9
U.S. Environmental' Protection Agency
CONTROL COSTS FOR COLD CLEANER
WITH 5.25 ft.2 AREA
Low Volatility High Volatility
Item Solvent^- Solvent^
Installed capital ($) 25.00 365.00
Direct operating costs ($/yr.) 1.00 2.6
Capital related charges ($/yr.) 4.30 91.25
Solvent cost (credit) ($/yr.) (4.80) (39.36)
Annualized cost (credit) ($/yr.) 0.50 54.49
a. Costs include only a drainage facility for low volatility solvents.
b. Includes $65 for drainage facility, a mechanically assisted cover,
and $300 for extension of freeboard.
c. Capital charges used in study estimate were 25 percent of capital
instead of 17 percent used in EPA report.
Source: EPA-450/2-77-022, op. cit.
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EXHIBIT 11-1C
U.S. Environmental Protection Agency
CONTROL COSTS FOP. AVERAGE-SIZED
OPEN TOP VAPOR AND CONVEYORIZED CLEANERS
1. CONTROL COSTS FOR TYPICAL SIZE OPEN TOP VAPOR DEGREASER
(Vapor to Air Area of 1.57 m2)
Control Technique
Installed capital ($)
Direct operating
cost ($/yr.)
Capital related charges
(5/yr.)
Solvent cost (credit)
($/yr.)
Net annualized cost
(credit) ($/yr.)
Manual
Cover
300
10
75
(860)
(775)
Carbon
Adsorption*
10,300
451
2,575
(1,419)
1,607
Refrigerated
Chiller
6,500
259
1,625
(1,290)
594
Extended Freeboard
& Powered Cover
8,000
100
2,000
(1,161)
939
2. CONTROL COSTS FOR TYPICAL CONVEYORIZED DEGREASERS
(Vapor to Air Vapor Area of 3.8 m^)
Monorail Deareaser
Carbona
Adsorber
Control Technique
•
Installed capital (4) 17,600
Direct operating 970
costs ($/yr.)
Capital related charges
(C/yr.)
Capital charges (5/yr.) 4,400
Solvent cost (credit) (5,633)
($/yr.)
Annualized cost (credit) (263)
($/yr.)
Refrigerated
Chiller
8,550
430
2,138
(5,633)
(3,065)
Crossrod Degreaser
Carbona
Adsorber
17,600
754
4,400
(2,258)
2,896
Refrigerated
Chiller
7,460
334
1,365
(2,258)
(59)
a. Not used in cost estimates since net annualized costs for carbon absorption
are the highest for any control method.
b. Capital charges used in study estimate were 25 percent of capital instead of
17 percent used by EPA source.
Source: EPA 450/2-77-022, op. cit.
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EXHIBIT 11-11
U.S. Environmental Protection Agency
ESTIMATED CONTROL COSTS FOR COLD CLEANERS
FOR THE STATE OF TENNESSEE
1. CAPITAL COSTS
Number of Degreasers
Item
Needing Conversion
Costs
Capital
490
$166,610
2. ANNUALIZED COSTS
Item
Costs
Direct operating costs
$ 1,216
Capital related charges
41,581
Solvent cost
¦(13,042)
Net annualized costs
$24 .756
Source: Booz, Allen & Hamilton, Inc.
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EXHIBIT 11-12
U.S. Environmental Protection Agency
ESTIMATED CONTROL COSTS FOR OPEN TOP
VAPOR DEGREASERS FOR THE STATE OF TENNESSEE
1.
CAPITAL COSTS
Item
Safety switches
Powered covers
Manual covers
Total
Cost
$ 1,500
368,000
6,900
$376,400
2. ANNUALIZED COSTS
Item
Direct operating costs
Capital related charges
Solvent cost
Net annualized costs
Cost
$ 4,830
' 94„ 100
(73,186)
$ 25,744
Source: Bcoz, Allen & Hamilton, Inc.
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EXHIBIT 11-13
U.S. Environmental Protection Agency
ESTIMATED CONTROL COSTS FOR CONVEYORIZED
DEGREASERS FOR THE STATE OF TENNESSEE
1.
CAPITAL COSTS
Item
Refrigerator chiller
Monorail degreasers
Crossrod degreasers
Safety switches
Drying tunnel
Reduce openings
Downtime covers
Total
Costs
$ 119,700
156,660
2,000
10,000
34,000
10,200
$332,560
2.
ANNUALIZED COSTS
Item
Direct operating costs
Capital related charges
Solvent cost
Net annualized cost
Costs
$ 64,034
83,140
(126,280)
$ 20,894
Source: Booz, Allen & Hamilton, Inc.
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EXHIBIT 11-14
U.S. Environmental Protection Agency
ESTIMATED NUMBER OF COLD CLEANERS
NEEDING CONTROLS IN THE STATE OF TENNESSEE
Estimated
Percent of
Type of Control Cleaners Needing Control
Estimated
Q
Number of Cleaners
Needing Control
Drainage Facility
Freeboard and*3
Drainage
a
5
36
63
454
a. Based on 10 percent of cleaners using low volatility solvents and
half of these needing drainage facilities.
b. Based on 90 percent of cleaners using high volatility solvents and
70 percent of these needing additional freeboard and drainage.
Source: Booz, Allen & Hamilton Inc.
-------
EXHIBIT 11-15
U.S. Environmental Protection Agency
ESTIMATED NUMBER OF OPEN TOP VAPOR*
DEGREASERS NEEDING CONTROL IN THE
STATE OF TENNESSEE
Estimated Estimated
Percent of Number of Cleaners
Type of Control Cleaners Needing Control Needing Control
Manual covers 30 23
Safety switches 20 15
Powered cover 60 46
Source: Booz, Allen & Hamilton Inc.
-------
EXHIBIT 11-16
U.S. Environmental Protection Agency
ESTIMATED NUMBER OF CONVEYORIZED
DEGREASERS NEEDING CONTROLS
IN THE STATE OF TENNESSEE
Percent of Cleaners Number of Cleaners
Type of Control Needing Control Needing Control
Refrigerated chillers for 36 14
monorail and miscellan-
eous type cleaners3.
Refrigerated chillers for 54 21
crossrod type cleaners
Safety switches 20 8
Drying tunnel 10 4
Minimized openings 90 34
Downtime covers 90 34
a Refrigerated chillers were estimated to be needed only on about
90 percent of all convevorized vapor degreasers; thus, the per-
cent of units needed by monorail-miscellaneous and crossrod
types add only to 90 percent.
Source; Booz, Allen & Hamilton Inc.
-------
11.4 DIRECT ECONOMIC IMPLICATIONS
11.4.1 Time Required To Implement Proposed RACT Regulations
Because many degreasers are affected under the proposed
regulation (76 open top vapor degreasers, 38 conveyorized
degreasers and 720 cold cleaners in Tennessee"alone) and
because each requires retrofitting of a control device,
some users may not be able to comply within proposed
compliance schedules because of lack of equipment avail-
ability. Discussions with personnel from the major manu-
facturers of vapor and cold degreasers reveal that none
are prepared to provide the necessary controls in quantities
to meet a cumulative U.S.-wide demand. Some cleaners could
be converted to 1,1,1-trichloroethane and thus become exempt.
In fact, many metal solvent cleaners have been converted to
trichloroethane in the last few years in anticipation of
RACT regulations. However, not all existing machines can
be converted because of inadequate condensing sections or
improper materials of construction. Trichloroethane can
be extremely corrosive if stabilizers are insufficiently
replenished. In fact, stainless steel vapor degreasers
using 1,1,1-trichloroethane have been reported to fail
because of corrosion following the loss of stabilizer.
11.4.2 Effect of Compliance Upon Selected Economic Indicators
Implementation of the proposed regulations is expected
to have a negligible effect on Tennessee's statewide
economy. Low capital and annual operating costs required
by the solvent metal cleaner owners in meeting the proposed
regulations are responsible for this minimal impact.
For example, Tennesssee's estimated total capital
expenditures in non-attainment counties for SIC groups 25
and 33-39 exceed $280 million for 1976. Total capital
expenditures for retrofitting are estimated to be $0.9
million for all SIC groups in the state, less than one per-
cent of total capital expenditures for state.
Similarly implementation will have a negligible impact
on total shipments, prices and the state economy as a whole.
The total net annualized costs of the proposed regulations
($0.07 million) are negligible compared to the estimated
1976 total shipments of $8.4 billion in SIC groups 25 and
11-20
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33-39 for state. Considering that these expenditures are
spread over service industries and other industries not
included in SIC's 25 and 33-39, the overall economic impact
is even less significant.
Although solvent metal cleaners are particular to cer-
tain industries the proposed regulations are expected to
not have an impact on the structure of the state industry.
This is due to the dispersion of solvent metal cleaners
over many industries and the minimal importance of solvent
metal cleaning to the manufacturing processes.
Implementation of the regulations will reduce demand
for metal cleaning solvents. This would result in a reduc-
tion in solvent sales of about $0.2 million annually which
may result in a loss of employment for firms supplying metal
cleaning solvents.
11.4.3 Effect of Compliance Upon Energy Consumption
Carbon adsorbers, refrigerated chillers and distilla-
tion units are the principal energy consuming control de-
vices used for controlling degreasing emissions. The re-
frigerated chiller, which would probably be the preferred
¦method of control for conveyorized degreasers because of
its low capital and operating costs, will increase a degreaser's
energy consumption by about 5 percent. The EPA has estimated
consumption'of 0.5 kw to 5.0 kw by a chiller, used on a
typical conveyorized degreaser of about 3.8m2 size. About
90 percent or 35 of these currently do not have chillers.
Assuming 2,250 hours per year operation, total additional
energy consumption annually would be about 39,400 kw-hours
to 394,000 kw-hours. This is equal to $1,575 to $15,750 per
year in additional power costs, at a cost of $0.04 per kw-
hour. Most of this cost is recovered by savings in solvent
use. A portion of the increase in energy consumption will
be offset by reduced production and consumption of solvents;
production because it takes energy to produce solvents and
consumption because there is embodied energy in feedstocks
such as petroleum distillates.
EPA-450/2-77-022, op. cit.
11-21
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11.5 SELECTED SECONDARY ECONOMIC IMPACTS
Implementation is also expected to have minor, if not
negligible, impact upon other factors, such as employment,
market structure and productivity. The proposed regulations
include some change in work practices which will decrease
productivity in the metal cleaning operation by 5 percent
to 10 percent. Since metal cleaning is normally a minor
step in the manufacturing or service process, any change
in productivity and employment in user plants is expected
to be insignificant.
There will, however, be some temporary increase in
employment by those firms manufacturing such components
as refrigeration chillers and drying tunnels, that may be
required for retrofit controls. No estimates have been
made because manufacturers of such components are located
throughout the country. This temporary increase, however,
may be balanced by a slight decrease in employment occur-
ring because of lower solvent' consumption. The decrease
would occur primarily in shipping and repackaging operations.
The implementation of the RACT guidelines should not
have any major effect on the current market structure of
the industries using solvent metal cleaning. Cleaners re-
quiring highest retrofitting costs (i.e., for conveyorized
cleaners) are generally owned by large firms. Smaller firms
would be expected to have only cold cleaners or open top
vapor degreasers. The highest capital costs would be for
an open top unit which would require an expenditure of
$8,000 or less to comply. This is not expected to be a
significant financial burden even to small-sized firms.
* * * *
Exhibit 11-17, on the following page, summarizes the
conclusions presented in this report.
11-22
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EXHIBIT 11-17(1)
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR SOLVENT METAL DEGREASING
IN THE STATE OF TENNESSEE
Current Situation
Number of potentially affected
cleaners
Indication of relative importance
of industrial section to state
economy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of VOC control
to meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Discussion
834 cleaners
Value of shipments of firms in
SIC groups affected is 8.4 billion.
Where technically feasible, firms
are substituting exempt solvents
6,646 tons/year (including solvents
classified as exempt)
Substitution. Otherwise lowest
cost option as specified by EPA
will be used.
Equipment modifications as
specified by the RACT guidelines
Discussion
$0-9 million
$70,000 million Cless than
percent of the 1977 affected
facilities' value of shipments)
Metal cleaning is only a fraction
of manufacturing costs; price
effect expected to be less than
0.005 percent for affected facilities.
Less than 300 equivalent barrels
of oil per year increase
5-10 percent decrease for manually
operated degreasers. Will not
effect conveyorized cleaners.
-------
EXHIBIT 11-17(2)
U.S. Environmental Protection Agency
Affected Areas in Meeting RACT
Employment
Market structure
RACT timing requirements (1982)
Problem areas
VOC emission after RACT control
Cost-effectiveness of RACT control
Discussion
No effect except a possible
slight decrease in firms
supplying metal degreasing
solvents
No change
Equipment availability-
only a few companies now
supply the recommended
control modifications
No significant problem areas
seen. Most firms will be able
to absorb cost.
5,348 tons/year (80 percent of
1977 VOC emission level—however,
this does not include emission
controls for exempt solvents)
$55 annualized cost per ton of
emissions reduced
Source: Booz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
U.S. Department of Commerce, County Business Patterns,
1976.
U.S. Department of Commerce, Census of Manufactures,
1972
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Solvent Metal Cleaning EPA-450/2-
77-022, November 1977.
U.S. Environmental Protection Agency, Regulatory Guidance
for Control of Volatile Organic Emissions from 15 Categories
of Stationary Source¥ EPA-905/2-78-001, April 1978.
Dow Chemical Company, Study to Support New Source Performance
Standards for Solvent Metal Cleaning Operations EPA Contract
68-02-1329, June 30, 1976
Private conversations•with the following:
Dextrex Chemical Company, Detroit, Michigan
Ethyl Corporation, Baton Rouge, Louisiana
DuPont, Wilmington, Delaware
Dow Chemical Company, Midland, Michigan
PPG, Pittsburgh, Pennsylvania
Allied Chemical Company, Morristown, New Jersey
R.R. Street, Detroit, Michigan
Baron-Blakeslee Corporation, Cicero, Illinois
Hercules Inc., Wilmington, Delaware
Texas Eastman, Longview, Texas
-------
12.0 THE ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR CONTROL OF REFINERY VACUUM
PRODUCING SYSTEMS, WASTEWATER SEPARATORS
AND PROCESS UNIT TURNAROUNDS IN THE
STATE OF TENNESSEE
-------
12.0 THE ECONOMIC -IMPACT OF IMPLEMENTING
RACT FOR CONTROL OF REFINERY VACUUM
PRODUCING SYSTEMS r WASTEWATER
SEPARATORS' AND PROCESS UNIT TURNAROUNDS
IN THE STATE OF TENNESSEE
This chapter presents a detailed analysis of the impact
of implementing RACT controls of refinery vacuum producing
systems, wastewater separators and process unit turnarounds
in the State of Tennessee. The chapter is divided into six
sections including:
Specific methodology and quality of estimates
Industry statistics
The technical situation of the industry
Cost and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic implications
Selected secondary economic impacts.
Each section presents detailed data and findings based
on analyses of the RACT guidelines, previous studies of
refineries, interviews and analysis.
12-1
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12.1 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 control of refinery vacuum producing systems, wastewater
separators and process unit turnarounds in the State of Tennessee.
An overall assessment of the quality of the estimates
is detailed in the latter part of this section.
12.1.1 Industry Statistics
Industry statistics on refineries were obtained from
several sources. All data were converted to a base year,
1977, based on the following methodologies:
The number of refineries for 1977 was obtained
from the National Petroleum News Factbook, 1978.
The number of employees in 1977 was obtained
from interviews with refinery operators.
The crude oil operating capacity in barrels per
day was obtained from the National Petroleum
News Factbook, 1978.
Value of shipments was estimated based on a value
of refined product of $13.95 per barrel. This
price was obtained from the National Petroleum
News Factbook, 1977.
12-2
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12.1.2 VOC Emissions
Uncontrolled emissions from wastewater separators and
process unit turnarounds were estimated using factors from
Control of Refinery Vacuum Producing Systems; Wastewater
Separators and Process Unit Turnarounds/ EPA-450/2-77-025.
Uncontrolled emissions from vacuum producing systems were
estimated using Revision of Evaporative Hydrocarbon Emission
Factors , EPA-450/3- 76-0 39. ~ ~~~
12.1.3 Processes for Controlling VOC Emissions
Processes for controlling VOC emissions from refinery
vacuum producing systems, wastewater separators and process
unit turnarounds are described in Control of Refinery
Vacuum Producing Systems, Wastewater Separators and Process
Unit Turnarounds, EPA-450/2-77-025. These data provide
the alternatives available for controlling VOC emissions
from these refinery operations. Several studies of VOC
emission control were also analyzed in detail; and
petroleum trade associations, refinery operators and vapor
control equipment manufacturers were interviewed to ascertain
the most likely types of control processes which would be
used in refineries in Tennessee. The specific studies analyzed
were: Human Exposures to Atmospheric Emissions from Refineries,
American Petroleum Institute, "July 19 73; and Economic Impact of
EPA's Regulations on the Petroleum Refining Industry.
The alternative types of vapor control equipment likely
to be applied to refinery vacuum producing systems, waste-
water separators and process unit turnarounds were described,
and percentage reductions from using each type of control
were determined. The methodology for the cost analysis
based on this scheme is described in the following paragraphs.
12.1.4 Cost of Vapor Control Systems
The costs of vapor control systems were developed by:
Determining the alternative types of control
systems likely to be used
Developing installed capital costs for each control
system
Determining installed capital costs to the refinery
in Tennessee.
12-3
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Developing additional costs including:
Direct operating costs
- Annualized capital charges
- Petroleum credit
Net annualized cost
Costs were determined from analyses of the following
previous studies:
Control of Refinery Vacuum Producing Systems/
Wastewater Separators and Process Unit Turnarounds,
EPA 450/2-77-025
Hydrocarbon Emissions from Refineries, American
Petroleum Institute, October 1977
and from interviews with petroleum marketers' associations,
refinery operators, major oil companies and vapor control
equipment manufacturers.
It was found that the refinery in Tennessee has con-
trolled the vacuum producing systems and the process units,
but has not controlled the wastewater separation area.
12.1.5 Economic Impacts
The economic impacts were determined by analyzing the
leadtime requirements needed to implement RACT; assessing
the feasibility of instituting RACT controls in terms of
capital availability and equipment availability; comparing
the direct costs of RACT control to various state economic
indicators; and assessing the secondary effects on market
structure, employment and productivity as a result of im-
plementing RACT controls in Tennessee.
12.1.6 Quality of Estimates
Several sources of information were utilized in
assessing the emissions, cost and economic impact of
implementing RACT controls on selected refinery operations
in Tennessee. A rating scheme is presented in this section
to indicate the quality of the data available for use in
this study. A rating of "A" indicates hard data (i.e.,
data that are published for the base year); "B" indicates
12-4
-------
data that were extrapolated from hard data; and "C"
indicates data that were not available in secondary
literature and were estimated based on interviews, analyses
of previous studies and best engineering judgment.
Exhibit 12-1, on the following page, rates each study out-
put listed and the overall quality of the data.
12-5
-------
Study Outputs
Industry statistics
Emissions
Cost of emissions
control
Statewide costs of
emissions
Economic impact
Overall quality of
data
. Exhibit 12-1
U.S. Er.vircnmen-al ?rocsc~icn Agency
DATA QUALITY
B C
A Extrapolated Estimated
:d Data Data Data
Source: 3ooz, Alien & Hamilton Inc.
-------
12.2 INDUSTRY STATISTICS
Industry facilities, statistics and business trends
for the refinery in Tennessee are presented in this section.
The discussion includes a description of the facilities
and their characteristics, a comparison of the size of the
refining industry to state economic indicators, a historical
characterization and description of the industry and an
assessment of future industry patterns. Data in this
section form the basis for assessing the impact on this
industry of implementing RACT to VOC emissions from
selected refinery operations.
12.2.1 Size of the Industry
There is one refinery in Tennessee, listed in
Exhibit 12-2, on the following page, along with location,
crude capacity and vacuum distillation capacity. The
statewide employment, output, and estimated value of ship-
ments for the Tennessee refinery are displayed in Exhibit 12-3,
following Exhibit 12-2.
12.2.2 Comparison of the Industry to the State Economy
In this section the refining industry is compared to
the economy of the State of Tennessee by comparing industry
statistics to state economic indicators. Employees in the
refining industry represent approximately 0.01 percent of
the total state civilian labor force of Tennessee. The
value of refined products from the Tennessee refinery
represents approximately 1.2 percent of the total
value of wholesale trade in Tennessee in 1977.
12.2.3 Industry Trends
Petroleum refining is the third largest industry in
the United States. Until the 1970s the output of the refining
industry had grown at a steady rate. Currently, approximately
28 0 refineries are owned by approximately 140 firms, located
in 4 0 of the 5 0 states, Guam, Puerto Rico and the Virgin
Islands. The refining industry manufactures hundreds of
distinguishably different products, which may be grouped into
four broad product classes: gasoline, middle distillates,
residual and other.
12-6
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Name of Firm Location
Delta Refinery Company Memphis
Source: National Petroleum News Factbook, 1978.
Exhibit 12-2
U.S. Environmental Protection Agency
PETROLEUM REFINERIES IN TENNESSEE
Crude Capacity
(000, barrels per day)
43.9
-------
Exhibit 12-3
U.S. Environmental Protection Agency
INDUSTRY STATISTICS FOR
REFINERIES IN TENNESSEE
Yearly
Value of
Establishments Employees Output Shipments
(000, barrels ($ Million, 1977)
per day)
200c
38,000c
181r
a. Based on interview with the plant supervisor, Mr. Red Holcher
b. Assumes a value of $13.95 per barrel as average for 1977 (Source: National
Petroleum News Factbook, 1977)
Source: Booz, Allen & Hamilton Inc.
-------
The bulk of refining is done by firms which also market
refined products or produce crude oil or both.
Foreign, Federal, state and local governments all
influence the oil product market in terms of taxes,
price controls, tariffs on imports of crude oil and products.
Foreign crude oil prices had, until 197 3, been lower than
prices for domestic crude oil. Since the advent of the OPEC
cartel in 1975, imported crude oil prices have risen sharply.
12-7
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12.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents information on refinery opera-
tion, estimated VOC emissions from selected refinery
operations in Tennessee, the extent of current control in
use, the requirements of vapor control under RACT and the
likely RACT alternatives which may be used for controlling
VOC emissions from selected refinery operations in Tennessee.
12.3.1 Refinery Operations
The refinery operations considered in this report are:
Vacuum producing systems
Wastewater separators
Process unit turnarounds.
The emissions from these sources vary from one petroleum
refinery to another depending on such factors as refinery
size and age, crude type, processing complexity, application
of control measures and degree of maintenance. Refinery
facilities and operations are described in detail in Control
of Refinery Vacuum Producing Systems, Wastewater Separators
and Process Unit Turnarounds, EPA-450/2-77-025.
12.3.2 Emissions and Current Controls
This section presents the estimated VOC emissions from
selected refinery operations in Tennessee in 1977. It is
assumed that controls have been implemented for vacuum
producing systems and process unit turnarounds but that no
controls have been implemented for the wastewater separators
in the one refinery in Tennessee. Exhibit 12-4, on the
following page, shows total estimated emissions from the
refinery in Tennessee along with estimated emissions at
the complete level of control.
Emissions were estimated based on EPA emission factors
reported by U.S. EPA. The EPA is currently updating emission
factors based on a new analysis of previous test data. EPA
reports the emission factors may change as a result of
their ongoing program; therefore, caution must be exercised
in using these uncertain emission factors in Tennessee.
12-8
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Exhibit 12-4
U.S Environmental Protection Agency
ESTIMATED HYDROCARBON EMISSIONS FROM
SELECTED REFINERY OPERATIONS IN TENNESSEE
Estimated Hydrocarbon Emissions (TPY)
Number of
Refineries
Vacuum Producing Systems
Wastewater Separators
Process Unit Turnarounds
With Control0
Negligible
641
232
At Complete
Control13
Negligible
32
232
TOTAL
873
264
Emissions are estimated using factors from Control of ,Refinery Vacuum Producing Systems,
Wastewater Separators and Process Unit Turnarounds, EPA-450/2-77-025. Emissions from
vacuum producing systems were estimated using Revision of Evaporative Hydrocarbon
Emissions Factors, EPA-450/3-76-039.
Assumes 95 percent recoveries-
-------
12.3.6 RACT Guidelines
The RACT guidelines for VOC emission control from
vacuum producing systems, wastewater separators and process
unit turnarounds require the following control systems:
Vacuum producing units—The control measure for
vacuum producing units is to vent the noncondensable
hydrocarbon stream to a flare or to the refinery
fuel gas system
Wastewater separators—The control measure for
emissions from wastewater separators is to cover
the separators. Emissions are' collected and sent
to the flare or refinery fuel gas system.
Process unit turnarounds—Process unit turnaround
emissions are controlled by piping emissions to a
flare or to the refinery fuel gas system.
Proper operation and maintenance of equipment will also
reduce emissions from cracks and leaks in the system.
12.3.7 Selection of the Most Likely RACT Alternatives
The techniques for the control of VOC emissions from
refinery vacuum producing systems, wastewater separators and
process unit turnarounds are discussed in detail in this
section.
12.3.5.1 Controlling Emissions from Vacuum Producing Units
Steam ejectors with contact condensers, steam ejectors
with surface condensers, and mechanical vacuum pumps all dis-
charge a stream of noncondensable VOC while generating the
vacuum. Steam ejectors with contact condensers also have
potential VOC emissions from their hot wells. VOC emissions
from vacuum producing systems can be prevented by piping
the noncondensable vapors to an appropriate fire box or
incinerator or (if spare compressor capability is available)
by compressing the vapors and adding them to refinery fuel
gas. The hot wells associated with contact condensers can
be covered and the vapors incinerated. Controlling vacuum
producing systems in this manner will result in negligible
emissions of hydrocarbons from this source. Such systems
are now in commercial operation and have been retrofitted in
existing refineries. For purposes of this report it is
12-9
-------
assumed that recovered VOC are used in the refinery fuel
gas system, thus creating a credit in cost for recovered
petroleum.
12.3.7.2 Controlling Emissions from Wastewater Separators
Reasonable control of VOC emissions from wastewater
separators consists of covering the forebays and separator
sections, thus minimizing the amount of oily water exposed
to atmosphere. Commercially operating systems include a
solid cover with all openings sealed, totally enclosing the
compartment liquid contents, or a floating pontoon or double-
deck type cover, equipped with closure seals to enclose any
space between the cover's edge and compartment wall. Also,
any gauging and sampling device in the compartment cover
can be designed to provide a projection into the liquid surface
to prevent VOC from escaping. The sampling device can also
be equipped with a cover or lid that is closed at all times
except when the device is in actual use. It is assumed that
95 percent of these emissions are recovered and used in the
refinery fuel gas system.
12.3.7.3 Controlling Emissions from Process Unit Turnaround
A typical process unit turnaround would include pumping
the liquid contents to storage, purging the vapors by
depressurizing, flushing the remaining vapors with water,
steam or nitrogen, and ventilating the vessel so workmen can
enter. The major potential source of VOC emissions is in
depressurizing the vapors to the atmosphere. After the vapors
pass through a knockout pot to remove the condensable hydro-
carbons, the vapors can be added to the fuel gas system,
flared or directly vented to atmosphere. Atmospheric
emissions will be greatly reduced if the vapors are combusted
as fuel gas or flared until the pressure in the vessel is as
close to atmospheric pressure as practicably possible.
The exact pressure at which the vent to the atmosphere is
opened will depend on the pressure drop of the disposal
system. Most refineries should easily be able to depressurize
processing units to five psig or below, before venting to the
atmosphere. Many refineries depressurize a vessel to almost
12-10
-------
atmospheric pressure and then steam the vessel to the flare
header, before opening it to atmosphere. In some refineries,
the hydrocarbon concentration is as low as 1 percent to 30
percent before the vessel is vented to atmosphere. It is
assumed that no VOC emissions are recovered and used in the
refinery fuel gas system.
~ ~ ic *
The sections which follow discuss the costs of imple-
menting these control techniques at the refinery in Tennessee.
12-11
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12.4 COST AND HYDROCARBON REDUCTION BENEFIT EVALUATIONS
FOR THE MOST LIKELY RACT ALTERNATIVES
Costs for VOC emission control equipment are presented
in this section. The costs for the three emission control
systems described in Section 12.3 are described for vacuum
producing systems, wastewater separators and process unit
turnarounds individually, followed by an aggregation of
these costs for the refinery in Tennessee.
12.4.1 Costs for Emission Control Systems
The installed capital costs for the three emission
control systems (summarized in Exhibit 12-5, on the following
page) were derived from analysis of the RACT guidelines,
from interviews with refinery operators and major oil companies
and from previous cost and economic studies of refineries.
Control measures for vacuum producing systems at a
typical 100,000 barrel per day capacity refinery range in
costs from approximately $2 4,00 0 for vacuum producing systems
using either surface condensers or mechanical pumps to
$52,000 for vacuum producing systems using contact (baro-
metric) condensers. These cost estimates are based on the
refinery requiring the following equipment.
For vacuum producing systems using either surface
condensers or mechanical pumps, typical equipment
includes:
200 feet of piping
6 valves
1 flame arrestor
For vacuum producing systems using contact
(barometric) condensers, typical equipment includes:
400 feet of piping
- 12 valves
2. flame'arrestors
- Hotwell cover area of 100 square feet
Control of wastewater separators using covers can range
from $30 per square foot to $2,000 per square foot, depending
12-12
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Exhibit 12-5
U.S. Environmental Pro-ection Agency
INSTALLED CAPITAL COSTS OF VAPOR CONTROL SYST!
FOR VACUUM PRODUCING SYSTEMS, WASTEWATER
SEPARATORS AND PROCESS
UNIT TURNAROUNDS
Vacuum Producing
Svstems
surrace
Condensers
or Mechanical
(5, 1977)
Contact
Condensers
(5, 1977)
Wastewater
Separators
($, 1977)
Process Unit
Turnarounds
($, 1977)
24,000
52,000
53,000
100,000
Note: Capital costs are for a typical 100,000 barrel per day refinery.
a. Equipment includes 200 feet of piping, 6 valves and 1 flame
arrestor.
b. Equipment includes 400 feet of piping, 12 valves, 2 flame
arrestors, 100 ft.2 area hotwell cover.
2
c. Cover for 5,000 ft. wastewater separator.
d. Equipment includes 1,000 ft. of piping and 20 valves.
Source: Control of Refinery Vacuum Producing Systems, Wastewater
Separators and Process Unit Turnarounds, EPA-450/2-77025,
pp. 4-10.
-------
upon the types of covers used according to an interview
with Exxon Corporation. The RACT guideline document entitled
Control of Refinery Vacuum Producing Systems, Wastewater
Separators and Process Unit Turnarounds used a cost of $12.60
per square foot which was also used in this report.
Equipment required for controlling emissions from pro-
cess unit turnarounds basically includes piping and valves.
The installed capital costs for a typical 100,000 barrel
per day refinery would be in the range of $10,000 per pro-
cess unit; there are, on the average, ten process units for
a 100,000 barrel per day refinery.
Cost estimates obtained from Control of Refinery Vacuum
Producing Systems, Wastewater Separators and Process Unit
Turnarounds, EPA-450/2-77-025 and verified through inter-
views will vary from one refinery to another reflecting the
variability in refinery size, configuration, age, product
mix and degree of control.
In Tennessee, the one refinery has controlled the
vacuum producing systems and the process units, but has not
controlled the wastewater separation area.
The remainder of this section, therefore, presents
the costs for covering the wastewater separator.
12.4.2 Costs to the Statewide Industry
Exhibit 12-6/ on the following page, shows the aggre-
gation of vapor recovery costs to the refinery in Tennessee.
The cost estimates are based on the following:
The wastewater separator is estimated to be
880 square feet.
The refinery is equipped with vacuum producing
systems with contact condensers.
The refinery has 6 process units.
Installed capital cost includes parts and labor.
Annualized direct operating costs, expected to be
3 percent of installed capital costs, include
costs for labor, utilities, recordkeeping and
training.
12-13
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Exhibit 12-6
U.S. Environmental Protection Agency
STATEWIDE COSTS FOR VAPOR CONTROL
SYSTEMS FOR REFINERY VACUUM PRODUCING
SYSTEMS, WASTEWATER SEPARATORS AND
PROCESS UNIT TURNAROUNDS
Characteristics/Cost Item Data
Number of refineries 1
Total refinery capacity 43,900
(barrels per day)
Emission reduction 609
(tons/year)
Installed capital 11,090
($, 1977)
Direct annual operating 330
cost ($, 1977)
Annual capital charges 2,770
($, 1977)
Annual gasoline credit3 0
($, 1977)
Net annualized cost 3,100
($, 1977)
Annualized cost per ton of ^
emissions reduced
($ per ton)
a. Based on the assumption that emissions will be sent to a flare.
Source: Booz, Allen & Hamilton Inc.
-------
Annualized capital charges, estimated to be 2 5
percent of installed capital costs, include costs
for depreciation, interest, maintenance, taxes and
insurance.
Based on an interview with the manufacturer it is
estimated that no petroleum credit would be accrued
as VOC emissions would be sent to a flare rather
than being recovered.
Net annualized costs are the sum of the capital
charges and direct operating costs.
Actual costs to refinery operators may vary, depending on
the type of manufacturer's equipment selected by the
refinery operator.
Based on the above assumptions, the total capital cost
to the industry for installing vapor recovery equipment is
estimated to be $11,000. The annual cost is estimated to be
$5 per ton.
12-14
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12.5 DIRECT ECONOMIC IMPACTS
This section presents the direct economic impacts of
implementing RACT for the refinery in Tennessee. The impacts
include capital availability, technical feasibility and
value of shipments. It was learned through interviews with
the refinery operator that emissions from vacuum producing
systems, and process unit turnarounds were controlled, but
the wastewater separator was uncovered.
Capital availability—The Tennessee refinery will
need to raise an estimated $11,000 to implement
RACT controls. It is expected that the refiner
will be able to raise the sufficient capital
nesessary for control.
Technical feasibility—Emission controls for
wastewater separators have been successfully
demonstrated in several refineries in the United
States. It is expected that Tennessee will be
able to successfully implement emission controls
to comply with RACT.
12-15
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12.6 SELECTED SECONDARY ECONOMIC IMPACTS
This section discusses the secondary impact of imple-
menting RACT on employment, market structure and productiv-
ity.
Employment—No change in employment is anticipated
from implementing RACT in Tennessee.
Market structure—The market structure will remain
unchanged when RACT is implemented in Tennessee.
Productivity—Worker productivity will probably be
unaffected by implementing RACT in Tennessee.
Exhibit 12-7, on the following page, summarizes the
findings of this chapter.
12-16
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EXHIBIT 12-7
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF IMPLEMENTING
RACT FOR REFINERY VACUUM PRODUCING SYSTEMS, WASTEWATER
SEPARATORS AND PROCESS UNIT TURNAROUNDS
IN THE STATE OF TENNESSEE
Current Situation
Number of potentially affected
facilities
Indication of relative impor-
tance of industrial section to
state economy
Current industry technology
trends
1977 VOC actual emissions
Industry preferred method of
VOC control to meet RACT
guidelines
Estimated method of VOC control
to meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost
(statewide)
Price
Discussion
1977 industry sales were $181 million. The
estimated annual crude oil throughput was
13 million barrels
No controls have been implemented on waste-
water separation area
873 tons per year
Vapor recovery of emissions by piping
emissions to refinery fuel gas system or
flare and covering wastewater separators
Vapor recovery by piping emissions from
vacuum producing systems to refinery fuel gas
system, cover wastewater separator, pipe
emissions from process units to flare
Discussion
11,000
.3,100
Energy
No major impact
No major impact
Productivity
Employment
Market structure
VOC emission after control
Cost effectiveness of control
No major impact
No major impact
No major impact
264 tons per year
$5 annualized cost/annual ton of
VOC reduction
Source: Booz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
Control of Refinery Vacuum Producing Systems, Wastewater
Separators and Process Unit Turnarounds, EPA-450/2-77-025,
October 1977.
Revision of Evaporative Hydrocarbon Emission Factors, PB-267
659, Radian Corp., August 1976.
Control of Hydrocarbon Emissions from Petroleum Liquids,
PB-246 650, Radian Corp., September 1975.
Regulatory Guidance for Control of Volatile Organic Compound
Emissions from 15 Categories of Stationary Sources, EPA 9 05/
2-78-001, April 1978.
Systems and Costs to Control Hydrocarbon Emissions from
Stationary Sources, PB-236 921, Environmental Protection
Agency, September 197 4.
Economic Impact of EPA's Regulations on the Petroleum Refining
Industry, PB-253 759, Sobotka and Co., Inc., April 1976.
Hydrocarbon Emissions from Refineries, American Petroleum
Institute, Publication No. 928, July 1973.
Technical Support Document, Petroleum Refinery Sources,
Illinois Environmental Protection Agency.
Petroleum Refining Engineering, W.L. Nelson, McGraw-Hill Book
Company, Inc. New York, 19 58.
Petroleum Refinery Manual, Henry Martin Noel, Reinhold Publish-
ing Corporation, New York, 1959.
Oil and Gas Journal, April 23, 197 3.
Petroleum Products Handbook, Virgil B. Guthrie, Editor, Mcgraw-
Hill Book Company, New York, 1960.
National Petroleum News Factbook, 1978.
-------
Private conversations with the following:
Mr. Fritz, Exxon Research, New Jersey
Mr. Gordon Potter, Exxon Corporation, Houston,
Texas
Mr. Chuck Masser, U.S. EPA, Research Triangle
Park, North Carolina
Mr. Karlowitz, American Petroleum Institute,
Washington, D.C.
Delta Refining Company, Memphis, Tennessee
-------
13.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
TANK TRUCK GASOLINE
LOADING TERMINALS IN
THE STATE OF TENNESSEE
-------
13.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
TANK TRUCK GASOLINE
LOADING TERMINALS IN
THE STATE OF TENNESSEE
This chapter presents a detailed analysis of the impact
of implementing RACT controls for tank, truck gasoline loading
terminals in the State of Tennessee. The chapter is divided
into six sections including:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Cost and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic implications
Selected secondary economic impacts.
Each section presentsidetailed data and findings based
on the RACT guidelines, previous studies of tank truck
gasoline loading terminals, interviews and analysis.
13-1
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13.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining
estimates of:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Cost of controlling VOC emissions
Economic impact of emission control
for tank truck gasoline loading terminals in the State of
Tennessee.
An overall assessment of the quality of the estimates
is detailed in the latter part of this section.
13.1.1 Industry Statistics
Industry statistics on tank truck gasoline loading
terminals were obtained from several sources. All data
were converted to a base year, 1977, based on the following
specific methodoloQies:
The number of establishments for 1977 was esti-
mated from data in the 1972 Census of Wholesale
Trade, Petroleum Bulk Stations and Terminals and
from the decline in the number of establishments
nationally from 1969 to 1972.
The number of employees in 19 77 was derived by
determining the number of employees per establish-
ment in 19 72 from the 1972 Census of Wholesale
Trade, Petroleum Bulk Stations and Terminals and
multiplying this factor by the number of establish-
ments estimated for 1977.
The number of gallons sold from terminals
in 1977 in Tennessee was estimated from total
gasoline consumption in the state. Based on
data in Kentucky it was found that approxi-
mately 90 percent of statewide consumption
of gasoline was distributed through terminals.
This finding was used in Tennessee.
Sales, in dollars, of motor gasoline for 1977
were estimated by multiplying the number of gallons
of gasoline sold from terminals in Tennessee in
1977 by the national dealer tankwagon price in
13-2
-------
1977 (42.5C/gallon), which was reported in the
National Petroleum News Factbook, 1978.
13.1.2 VOC Emissions
VOC emissions for tank truck gasoline loading terminals
in Tennessee were calculated by multiplying U.S. EPA emission
factors by terminal throughput. U.S. EPA emission factors
were reported in Hydrocarbon Control Strategies for Gasoline
Marketing Operations, EPA-450/3-78-017. Emissions were
based on all terminals either top submerged filling or
bottom loading.
13.1.3 Processes for Controlling VOC Emissions
Processes for controlling VOC emissions for tank truck
gasoline loading terminals are described in Control of
Hydrocarbons from Tank Trucks Gasoline Loading Terminals,
EPA-450/2-77-026. These data provide the alternatives
available for controlling VOC emissions from tank truck
gasoline loading terminals. Several studies of VOC emis-
sion control were also analyzed in detail, and interviews
with petroleum trade associations, terminal operators
and vapor control equipment manufacturers were conducted
to ascertain the most likely types of control processes
which would be used in terminals in Tennessee. The spe-
cific studies analyzed were; Demonstration of Reduced
Hydrocarbon Emissions from Gasoline Loading Terminals,
PB-243 363; Systems and Costs to Control Hydrocarbon
Emissions from Stationary Sources, PB-23 6 921; and The
Economic Impact of Vapor Control in the Bulk Storage
Industry, draft report to U.S. EPA by Arthur D. Little.
The alternative types of vapor control equipment likely
to be applied to tank truck gasoline loading terminals were
analyzed. Model plants reflecting each control alternative
were defined and each type of control alternative used was
applied to the number of tank truck gasoline loading ter-
minals in the state. The methodology for the cost analysis
of VOC emissions control is described in the following
paragraphs.
13.1.4 Cost of Vapor Control Systems
The costs of vapor control systems were developed by:
Determining the alternative types of control
systems likely to be used
13-3
-------
Estimating the probable use of each type of con-
trol system
Defining systems components
Developing installed capital costs for systems
components
Aggregating installed capital costs for each
alternative control system
Defining two model terminals based on throughput
levels
Developing costs of the alternative control systems
for the two model terminals including:
Installed capital cost
Direct operating costs
Annualized capital charges
Gasoline credit
Net annualized cost
Assigning model terminal costs to terminals in
Tennessee
Aggregating costs to the total industry in
Tennessee.
Costs were determined mainly from analyses of the RACT
guidelines and from interviews with petroleum marketers'
associations, terminal operators and vapor control equip-
ment manufacturers.
The assignment of the estimated cost of control for
terminals in Tennessee required a profile of tank truck
gasoline loading terminals in the state by size of gasoline
throughput. A national profile is presented which was used
to approximate the terminals in Tennessee since no data
specific to Tennessee were available.
13.1.5 Economic Impact
•The economic impacts were determined by analyzing the
lead time requirements needed to implement RACT; assessing
the feasibility of instituting RACT controls in terms of
capital availability and equipment availability; comparing
the direct costs of RACT control to various state economic
13-4
-------
indicators; and assessing the secondary effects on market
structure, employment and productivity as a result of im-
plementing RACT controls in Tennessee.
13.1.6 Quality of Estimates
Several sources of information were utilized in assessing
the emissions, costs and economic impact of implementing RACT
controls on gasoline terminals in Tennessee. 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" in-
dicates hard data (i.e., data that are published for the
base year); "B" indicates data that were extrapolated from
hard data; and "C" indicates data that were not available
in secondary literature and were estimated based on inter-
views, analyses of previous studies and best engineering
judgment. Exhibit 13-1, on the following page, rates each
study output listed and the overall quality of the data.
13-5
-------
Exhibit 13-1
U.S. Environmental Protection Agency
DATA QUALITY
B C
A Extrapolated Estimated
Study Outputs Hard Data Data Data
Industry statistics •
Emissions •
Cost of emissions •
control
Statewide costs of •
emissions
Economic impact •
Overall quality of •
data
Source: Booz, Allen & Hamilton Inc.
-------
13.2 INDUSTRY STATISTICS
Industry character, statistics and business trends
for tank truck gasoline loading terminals in Tennessee
are presented in this section. The discussion includes a
description of the number of facilities and their character-
istics, a comparison of the size of the gasoline terminal
industry to state economic indicators, a historical charac-
terization and description of the industry and an assess-
ment of future industry patterns. Data in this section
form the basis for assessing the impact on this industry of
implementing RACT on tank truck gasoline loading terminals
in Tennessee.
13.2.1 Size of the Industry
There were an estimated 31 tank truck gasoline loading
terminals, as of 1977, in Tennessee. Industry sales were
in the range of $1,036 billion, with an estimated yearly
.throughput of 2.439 billion gallons of gasoline. The esti-
mated number of employees in 1977 was 340. These data
and the sources of information are summarized in Exhibit
13-2, on the following page. Annual capital investments
have not been estimated. In general, tank truck gasoline
loading terminal investments are for plant and equipment
to replace worn-out facilities, modernize the establishments
or improve operating efficiences.
13.2.2 Comparison of the Industry to the State Economy
A comparison of the tank truck gasoline loading termi-
nal industry to the economy of the State of Tennessee is
shown in this section by comparing industry statistics to
state economic indicators. Employees in the tank truck
gasoline loading terminal industry represent 0.06 percent
of the total state civilian labor force of Tennessee. The
value of gasoline sold from terminals represented approxi-
' mately 7 percent of the total value of wholesale trade in
Tennessee in 1977.
13.2.3 Characterization of the Industry
Tank truck gasoline loading terminals are the primary
distribution point in the petroleum product marketing network
as shown in Exhibit 13-3, following Exhibit 13-2. Terminals
receive gasoline from refineries by pipeline, tanker or barge.
13-6
-------
Exhibit 13-2
U.S. Environmental Protection Agency
INDUSTRY STATISTICS FOR TANK TRUCK
GASOLINE LOADING TERMINALS IN TENNESSEE
Number of
Establishments
Number of
Employees
Sales
Gasoline Sold
($ Billion, 1977)
(Billions of Gallons)
31
340b
1.036
c
2.439
d
a. Projected from the 1969 and 1972 Census of Wholesale Trade,
Petroleum Bulk Stations and Terminals.
b. Booz, Allen & Hamilton Inc. estimate based on the ratio of the
number of employees to the number of establishments in 1972.
c. Number of gallons of motor gasoline sold in 1977 multiplied by
the national dealer tankwagon price in 1977 (42.51£/gallon).
d. Booz, Allen & Hamilton, Inc. estimated based on 90 percent
of total gasoline consumed statewide was distributed through
terminals.
-------
Exhibit 12-3
U.S. Environmental Protection Acencv
GASOLINE DISTRIBUTION NETWORK
Typical delivery route of truck-trailer
r+- Typical delivery route of account truck
Typical transaction with consumer coming to supplier
Final Product Usage
Source: Economic Analysis of Vapor Recovery Systems on Small
Bulk Plants, EPA 240/1-77-013, September 1976, p. 3-2.
-------
Most gasoline terminals load all of the petroleum pro-
duct they receive into truck transports at the terminals'
loading racks. These truck transports usually have storage
capacities between 8,000 and 9,000 gallons and deliver gaso-
line to service stations and bulk gasoline plants for further
distribution.
Over two-thirds of the gasoline terminals in the United
States are owned by major oil companies and refiner/marketers.
The remaining gasoline terminals are owned by independents.
The major oil companies and regional refiners own a propor-
tionately greater number of the large gasoline terminals and
proportionately fewer of the small gasoline terminals.
Approximately ten years ago," petroleum companies began
to consider gasoline terminals as_separate profit centers..
Terminals are now expected to recover all operating expenses
as well as to provide an acceptable return on capital. Since
terminals are now treated as profit centers, petroleum mar-
keters have closed many uneconomic and marginal facilities
throughout the country. Some marketers have withdrawn
from selected regions of the country as part of their over-
all corporate strategy. Gasoline terminals in these markets
are being consolidated, sold or closed.
Gasoline terminals are generally located near refineries,
pipelines and large metropolitan areas. The daily through-
put ranges from 20,000 gallons per day to over 600,000 gallons
per day. Terminal characteristics presented in Hydrocarbon
Control Strategies for Gasoline Marketing Operations are used
to characterize terminals in Tennessee since data specific to
Tennessee terminals are not available. Terminals in Tennessee
can be characterized as having 60 percent fixed roof tanks
and employing top submerged or bottom filling.
Exhibit 3-4, on the following page, shows an estimated
national distribution of gasoline terminals by throughput.
This distribution is assumed to be representative of terminals
in Tennessee for the purpose of this analysis, since detailed
data on terminal throughput for Tennessee were not available.
13-7
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Exhibit 13-4
U.S. Environmental Protection Agency
DISTRIBUTION OF TANK TRUCK GASOLINE
LOADING TERMINALS BY AMOUNT OF THROUGHPUT
IN THE UNITED STATES
Gasoline
Throughput
Percentage
of Plants
(gallons per day)
Less than 200,000
48
200,000 to 399,000
27
400,000 to 599,000
21
Over 600,000
4
TOTAL
100
Source: Bureau of Census, 1972 Census of Wholesale Trade
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13.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents information on tank truck gasoline
loading terminal operations, estimated VOC emissions from
terminal operations in Tennessee, the extent of current
controls in use, the requirements of vapor control required
by RACT and the likely RACT alternatives which may be used
for controlling VOC emissions from gasoline terminals in
Tennessee.
13.3.1 Tank Truck Gasoline Loading Terminal Operations
Tank truck gasoline loading terminals are the primary
distribution facilities which receive gasoline from pipelines,
tankers and barges; store it in above-ground storage tanks;
and subsequently dispense it via tank trucks to bulk gasoline
plants and service stations. Tank truck gasoline loading
terminals with an average daily gasoline throughput of 20,000
gallons per day or more (as defined by EPA) require vapor
control equipment to reduce VOC emissions from gasoline
terminal operations. Terminal facilities and operations are
described in detail in Hydrocarbon Control Strategies for
Gasoline Marketing Operations.
13.3.2 Emission and Current Controls
This section presents the estimated VOC emissions from
tank truck gasoline loading terminals in Tennessee in 1977
and the current level of emission control already imple-
mented in the state. Exhibit 13-5, on the following page,
shows the total estimated emissions in tons per year from
gasoline terminals in Tennessee. The estimated VOC
emissions from the 31 tank truck gasoline loading terminals
are 8,697 tons"per "year. No terminal in Tennessee has been
identified as having vapor recovery equipment installed.
13.3.3 RACT Guidelines
The RACT guidelines for VOC emission control from tank
truck gasoline loading terminals require the following con-
trol systems:
Top submerged or bottom fill of gasoline storage
tanks and outgoing tank trucks
Vapor collection from trailer-transport truck
loading
13-8
-------
Exhibit 13-5
U.S. Environmental Protection Agency
VOC EMISSIONS FROM TANK TRUCK GASOLINE
LOADING TERMINALS IN TENNESSEE
Number of Estimated
Facilities Annual Throughput Total Emissions
(Billions of gallons) (Tons/year)
31 .2.439 8,697
Source: Booz, Allen & Hamilton Inc.
-------
Vapor recovery or thermal oxidation of collected
vapors
Proper operation and maintenance of equipment.
Exhibit 13-6, on the following page, summarizes the RACT
guidelines for VOC emissions control from tank truck gasoline
loading terminals.
In Tennessee, VOC emission sources less than 100 tons
per year and not located in urban non-attainment areas are
exempted from state VOC emission regulations. It was assumed
that no terminal in the state would be exempted since ter-
minals generally generate VOC emmissions greater than 100
tons per year.
13.3.4 Selection of the Most Likely RACT Alternatives
Control of VOC emissions from tank truck gasoline
loading terminals is achieved using submerged or bottom
filling of storage tanks and of tank trucks and vapor con-
trol of the loading of outgoing trailer-transport trucks.
There are several alternative means of achieving vapor con-
trol at tank truck gasoline loading terminals, based on the
type of vapor control equipment installed.
Four likely alternatives for vapor control are:
Adsorption/absorption
Compression refrigeration absorption
Refrigeration
Thermal oxidation.
Each type of vapor control system is briefly described below.
13.3.4.1 Adsorption/Absorption (AA)
Vapor control by adsorption/absorption is achieved by
the following method. Vapors from tank truck loading oper-
ations are collected and directed to one of two activated
carbon beds. Vapors are condensed into pores in the carbon.
These vapors are then regenerated by pulling a vacuum over
the bed. Cold gasoline is then circulated in a separator
and the hot vapors are absorbed into the cold gasoline.
This process has recently been marketed and is becoming
competitive with the refrigeration system described below.
It has been reported that less maintenance is required for
this type of vapor recovery system than for the other three
types.
13-9
-------
Exhibit 13-6
U.S. Environmental Protection Agency
VOC EMISSION CONTROL TECHNOLOGY FOR
TANK TRUCK GASOLINE LOADING TERMINALS
Facilities Affected Sources of Emissions
RACT Control Guidelines
Tank truck ter-
minals with daily
throughput of
greater than 76,000
liters (20,000
gallons) of gaso-
line
Filling tank
trucks and
breathing and
working losses
from storage
tanks
Top submerge or
bottom fill tank
truck and one of
the following vapor
control systems:
- Adsorption/
Absorption
- Refrigeration
- Compression
Refrigeration
Absorption
- Thermal
Oxidation
Leakage
Maintenance of
areas that may
leak
Source: U.S. Environmental Protection Agency
-------
13.3.4.2 Compression Refrigeration Absorption (CRA)
Vapor control by compression refrigeration absorption
is achieved by the following method. Vapors from tank truck
loading operations are collected in a vapor holder. The
pressure is increased in the holder, thus causing vapors
to .condense. Further condensation is then achieved by
mixing chilled gasoline and vapors under pressure and the
vapors are absorbed into the gasoline. This system is
becoming less popular than the more recently developed
refrigeration system described below and it is not expected
that this type of system will be used in Tennessee.
13.3.4.3 Refrigeration (RF)
Vapor recovery using refrigeration is based on the
condensation of gasoline vapors by refrigeration at atmos-
pheric pressure. Vapors displaced from tank truck loading
operations enter a horizontal fin-tube condenser where they
are cooled to a temperature of about -4 0°F and condensed.
Because vapors are treated as they -are vented from tank
trucks, no vapor holder is required. Condensate is with-
drawn from the condenser and the remaining air containing
only a small amount of hydrocarbons is vented to the atmos-
phere. This system is priced competitively with AA systems
because of market pressure, although it is estimate'd to be
more costly to build.
13.3.4.4 Thermal Oxidation (OX)
Vapor control by thermal oxidation is achieved by
incineration devices. Gasoline vapors are displaced to a
vapor holder. When the vapor holder reaches its capacity,
vapors are released to the oxidizer, after mixing with a
properly'metered air stream, and combusted. Later models of
this type of thermal oxidizer do not require vapor holders;
vapors from the tank trucks during loading operations are
vented directly to the thermal oxidizer. It is not expected
that this type of vapor control system will be used in
Tennessee since there are fire hazards with a flame and
terminal operators are also reportedly reluctant to burn
valuable hydrocarbons.
13-10
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13.3.5 Leak Prevention from Tank Trucks
For vapor control systems to operate optimally, it is
essential to maintain leakless tank trucks. This is achieved
by using proper operating procedures and periodic maintenance
of hatches, P-V valves and liquid and gaseous connections.
13-11
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13.4 COST AND HYDROCARBON REDUCTION BENEFIT EVALUATIONS
FOR THE MOST LIKELY RACT ALTERNATIVES
Costs for VOC emission control equipment are presented
in this section. The costs for the four types of vapor con-
trol systems described in Section 13.3 are presented for two
model tank truck gasoline loading terminals. The final sec-
tion presents a projection of model terminal control costs
to the statewide industry.
13.4.1 Factory Costs for Four Types of Vapor Control
Systems
The factory costs for the four types of vapor control
systems (summarized in Exhibit 13-7, on the following page)
were derived from analysis of the RACT guidelines; from
interviews with terminal operators, major oil companies and
equipment manufacturers; and from previous cost and economic
studies of tank truck gasoline loading terminals.
Adsorption/absorption and refrigeration systems are
expected to be the only two types of vapor control systems
used at tank truck gasoline loading terminals in Tennessee.
It is estimated that 50 percent of the systems will be
adsorption/absorption and the other 50 percent will be
refrigeration systems. Factory costs for both systems
are assumed to be equal because of competitive pressures.
Maintenance costs for refrigeration systems are approximately
2 percent higher than those for adsorption/absorption systems.
13.4.2 Costs for Two Model Tank Truck Gasoline Loading
Terminals
Two model tank truck gasoline loading terminals and
their associated control costs are characterized in
this section. The costs are based on the control estimates
for adsorption/absorption and refrigeration systems reported
by equipment manufacturers and through interviews.
Exhibit 13-8, following Exhibit 13-7, defines two model
tank truck gasoline loading terminal characteristics and
associated control costs. It is assumed that approximately
50 percent of the terminals in Tennessee"can be characterized
by Model Terminal A; the remaining 50 percent are assumed
to be characterized by Model Terminal B.
13-12
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Exhibit 13-7
U.S. Environmental Protection Agency
FACTORY COSTS OF ALTERNATIVE
VAPOR CONTROL SYSTEMS
Type of Control System
Factory Costc
for 250,000
gallon per
day system
($000, 1977)
Factory Cost
for 500,000
gallon per
day system
($000, 1977)
Adsorption/Absorption
Compression-Refrigera-
tion- Absorption
Refrigeration
Thermal Oxidation
120°
128
120c
72
155
164
155
95
a. Costs are based on average of range of costs quoted by vendors
to the U.S. Environmental Protection Agency and reported in The
Economic Impact of Vapor Control on the Bulk Storage Industry,
p. D.3.
b. Hydrotech Engineering reported a factory price of $92,000
for a 250,000 gallon per day unit.
c. Expect system priced competitively to adsorption/absorption system
due to market pressures.
Source: Hydrotech, U.S. Environmental Protection Agency, Exxon and
Booz, Allen & Hamilton Inc. estimates.
-------
Exhibit 13-8
U.S. Environmental Protection Agency
DESCRIPTION AND COST OF MODEL TANK
TRUCK GASOLINE LOADING TERMINALS
EQUIPPED WITH VAPOR CONTROL SYSTEMS
Tank Truck Gasoline Loading
Terminal Characteristics
Model Terminal A
Model Terminal B
Throughput
Loading racks
Storage tanks
Tank trucks
Compartments per account truck
Vapor control systems
250,000 gallons/day 500,000 gallons/day
1 1
3 3
6 15
4 4
Adsorption/absorption Adsorption/Absorption
Refrigeration Refrigeration
Tank Truck Gasoline
Loading Terminal Costs
Installed capital cost
Annual direct operating costs
. Electricity
. Maintenance
. Operating Labor
. Carbon replacement
Subtotal (direct operating
costs)
Annualized capital charges
Net annualized cost (not in-
cluding gasoline credit)
AA
RF
AA
RF
$258,000 $258,000 $355,000 $355,000
3,900
10,800
1,500
2,400
18,600
54,180
72,780
9,900
13,200
1,500
24,600
7,800
13,950
1,500
4,700
27,950
54,180 74,440
78,780 102,500
19,800
17,050
1,500
38,350
74,550
112,900
-------
The costs for the model terminals are used in Section
13.4.3 to project costs of vapor control equipment to
the industry statewide. The costs for each model terminal
are:
Installed capital cost, which includes equipment
and modification costs, labor and costs to modify
trucks ($3,000 per truck)
Annual direct operating costs which include elec-
tricity, maintenance, operating labor and carbon
replacement costs. Maintenance costs for the
adsorption/absorption system are slightly lower
than those for refrigeration
Annualized capital charges include costs for
depreciation, interest, taxes and insurance and
are estimated to be 21 percent of the installed
capital cost
Net annualized operating costs, which are the sum
of the capital charges and direct operating costs.
It should be noted that gasoline credit has not
yet been accounted for. Gasoline credit will be
taken into account when the costs are projected
to the industry.
Another cost characterization that can be made is hydrocarbon
reduction versus cost. This finding will also be shown in
the statewide analysis.
13.4.3 Projection to the Statewide Industry
Exhibit 13-9, on the following page, shows the pro-
jected vapor recovery costs to the statewide industry in
Tennessee. The estimates are based on the following
assumptions:
In Tennessee, 50 percent of the tank truck
gasoline loading terminals can be characterized
by Model Terminal A and the remaining can be
characterized by Model Terminal B
Fifty percent of the terminals will implement the
adsorption/absorption vapor control system to com-
ply with RACT and the other 50 percent will imple-
ment the refrigeration system to comply with RACT
13-13
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Exhibit 13-9
U.S. Environmental Protection Agency
COSTS' OF VAPOR CONTROL SYSTEMS FOR
TANK TRUCK GASOLINE LOADING
TERMINALS IN TENNESSEE
Characteristics/Cost Item Data
Number of terminals 31
Total annual throughput 2.439
(billions of gallons)
Uncontrolled emissions 8,697
(tons/year)
Emission reduction from 7,827
terminals (tons/year)
Installed capital cost 9.453
($ million, 1977)
Direct annual operating.cost 0.842
($ million, 1977)
Annualized capital charges 1.985
($ million, 1977)
Annual gasoline credita 1.275
($ million, 1977)
Net annualized cost 1.552
($ million, 1977)
Annualized cost per ton of 233
emissions, terminal emissions
only ($ per ton)
Annualized cost per ton 155
of emissions reduced3 ($ per ton)
Annualized cost per ton ^33
of emissions reduced from
gasoline marketing*3 ($ per ton)
a. Based on 9,976 tons of emissions recovered which includes 90 percent
of the 2,388 tons collected from gasoline service stations, a
negligible amount collected from bulk plants and 7,827 tons collected
at the terminal. Gasoline credit is calculated by multiplying the
number of tons of emissions collected by the estimated number of
gallons in a ton (294 gallons) by a price of $.39 per gallon.
b. Annualized cost of emissions reduced from gasoline marketing based
on sum of net annualized costs from terminals, bulk plants, fixed
roof tanks, and gasoline dispensing facilities divided by the sum of
emissions reductions from these same categories.
Source: Booz, Allen & Hamilton Inc.
-------
RACT is implemented at bulk gasoline plants and
gasoline service stations in the affected counties
in the state. Ninety percent of the gasoline
vapors collected from bulk gasoline plants and
gasoline service stations are recovered and
credited to the tank truck gasoline loading
terminal.
Based on the above, the total cost to the industry for
installing vapor recovery equipment is estimated to be
$9,453 million. The amount of gasoline recovered from
terminals, bulk gasoline plants and gasoline service stations
is valued at $1,275 million. The annualized cost per ton
of emissions controlled at terminals (including gasoline vapors
that ' eventually would be recovered from service stations)
is estimated to be $155 per ton. The overall cost per ton
of emissions controlled from gasoline marketing in the state
is estimated to be $188 per ton.
13-14
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13.5 DIRECT ECONOMIC IMPLICATIONS
This section presents the direct economic implications
of implementing RACT controls to the statewide industry,
including availability of equipment and capital; feasibility
of the control technology; and impact on state economic in-
dicators .
13.5.1 RACT Timing
RACT is assumed to be implemented by January 1, 1982.
This implies that tank truck gasoline loading terminal oper-
ators must have vapor control equipment installed and oper-
ating within the next three years. The timing requirements
of RACT impose several requirements on terminal operators
including:
Determining appropriate vapor control system
Raising capital to purchase equipment
Acquiring the necessary vapor control equipment
Installing and testing vapor control equipment to
insure that the system complies with RACT.
The sections which follow discuss the feasibility and the
economic implications of implementing RACT within the re-
quired timeframe.
13.5.2 Feasibility Issues
Technical and economic feasibility issues of imple-
menting RACT controls are discussed in this section.
Several tank truck gasoline loading terminal operators
in the United States have successfully implemented vapor
control systems. State adoption of RACT regulations will
generate a new demand for vapor control systems. It is
expected that sufficient leadtime is available to meet the
increased demand of vapor recovery equipment.
In the area of economic feasibility it has been reported
from interviews that terminal operators should have access
to capital to purchase vapor control equipment, and it is
expected from information through interviews that terminals
will not cease operations because of the cost of imple-
menting RACT.
13-15
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13.6 SELECTED SECONDARY ECONOMIC IMPACTS
This section discusses the secondary economic impact
of implementing RACT on employment, market structure and
productivity.
Employment—No decline in employment is predicted
since terminals should not close solely because
of RACT requirements. A slight increase in oper-
ating and maintenance labor will be required
through implementation of RACT but this is pre-
dicted to have minimal impact on any employment
increase.
Market structure—No change in market structure
is expected to result from implementation of RACT.
Exhibit 13-10, on the following page, presents a
summary of the findings of this chapter.
13-16
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Current Situation
Number of potentially affected
facilities
Indication of relative importance
of industrial section to state
economy
Current industry technology trends
1977 VOC actual emissions
Industry preferred method of VOC
control to meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
Problem area
VOC emission after control
Cost effectiveness of control
EXHIBIT 13-10
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR TANK TRUCK GASOLINE
LOADING TERMINALS IN TENNESSEE
Discussion
31
1977 industry sales were $1,036 billion. The
estimated annual throughput was 2.44 billion
gallons
New terminals are currently being designed
with vapor recovery equipment
3,775 tons per year
Submerge or bottom fill and vapor recovery
Discussion
$9,453 million
$1,552 million (approximately 0.15 percent
of value of shipments)
Assuming a direct cost passthrough
$0.0006 per gallon
Assuming full recovery of gasoline—net savings
of 53,500 barrels annually from terminal
emissions
No major impact
No direct impact
No direct impact
Gasoline credit from vapors from bulk gasoline
plants and gasoline service stations require
uniform RACT requirements through the state
870 tons per year
$155 annualized cost/annual ton of VOC
reduction from terminals including gasoline
credit from vapors returned from bulk gaso-
line plants and gasoline service stations
Source: Booz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
National Petroleum News Factbook, 197 6, McGraw Hill, Mid-
May 197 6.
National Petroleum
News
Factbook,
1977 ,
McGraw
Hill,
Mid-
May 1977.
National Petroleum
News
Factbook,
1978,
McGraw
Hill,
Mid-
June 1978.
Control of Hydrocarbons from Tank Truck Gasoline Loading
Terminals, EPA-450/2-77-036, U.S. Environmental Protection
Agency, October 1977.
The Economic Impact of Vapor Control on the Bulk Storage
Industry, prepared for U.S. Environmental Protection
Agency by Arthur D. Little, draft report, July 1978.
Regulatory Guidance for Control of Volatile Organic Compound
Emissions from 15 Categories of Stationary Sources,
EPA-905/2-78-001, April 1978.
Systems and Costs to Control Hydrocarbon Emissions from
Stationary Sources, PB-236 921, Environmental Protection
Agency, September 1974.
197 2 Census of Wholesale Trade, Petroleum Bulk Stations and
Terminals, U.S. Bureau of Census.
Demonstration of Reduced Hudrocarbon Emissions from Gasoline
Loading Terminals, PB-234 363.
Private conversation with Mr. Clark Houghton, Mid-Missouri
Oil Company.
Private conversation with Mr. Gordon Potter, Exxon, Houston,
Texas.
Private conversation with Mr. James McGill, Hydrotech,
Tulsa, Oklahoma.
Private conversation with Mr. Frederick Rainey, Shell Oil
Company, Houston, Texas.
-------
14.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
BULK GASOLINE PLANTS IN
THE STATE OF TENNESSEE
-------
14.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
BULK GASOLINE PLANTS IN
THE STATE OF TENNESSEE
This chapter presents a detailed analysis of the
impact of implementing RACT controls for bulk gasoline plants
in three urban non-attainment counties in the State of
Tennessee.^ The chapter is divided into six sections
including:
Specific methodology and quality of estimates
Industry statistics
The technical situation of the industry
Cost and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic implications
Selected secondary economic impacts.
Each section presents detailed data and findings
based on the RACT guidelines, previous studies of bulk
gasoline plants, interviews, and analysis.
1. The three urban non-attainment counties are: Davidson, Hamilton
and Shelby. The regulation applies statewide for VOC emissions
greater than 100 tons per year, with the exception of VOC emission
sources located in urban non-attainment areas. Since bulk plants
in general have emissions less than 100 tons per year, only non-
attainment counties are considered in this analysis. Bulk plants
with tank capacity less than 2000 gallons or with throughput less
than 4000 gallons per day are also exempt from regulation.
14-1
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14.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining
estimates of:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Cost of controlling VOC emissions'
Economic impact of emission control
for bulk gasoline plants in affected counties in the State
of Tennessee.
An overall assessment of the quality of the estimates
is detailed in the latter part of this section.
14.1.1 Industry Statistics
Industry statistics on affected bulk gasoline plants
were obtained from several sources. All data were converted
to a base year, 1977, based on specific methodologies:
The number of affected bulk plants in the urban
non-attainment counties was obtained from the
Tennessee State Implementation Plans and through
interviews with state officials.
The number of employees in 1977 was derived
from the 1972 Census of Wholesale Trade,
Petroleum Bulk Stations and Terminals by
determining the number of employees per estab-
lishment in 1972 and multiplying this factor
by the number of affected establishments reported
for 1977.
The number of gallons of gasoline sold from
affected bulk plants was estimated by Booz,
Allen & Hamilton based on emission data in the
Tennessee State Implementation Plans.
Sales, in dollars, of motor gasoline for 1977
were estimated by multiplying the number of
gallons of gasoline sold in 1977 from affected
bulk gasoline plants by the national dealer
tankwagon price in 1977 (42.51C/gallon—reported
in the National Petroleum News Factbook, 1978).
14-2
-------
14.1.2 VOC Emissions
Emissions from the affected bulk gasoline plants
were obtained from the Tennessee State Implementation Plans.
14.1.3 Processes for Controlling VOC Emissions
Processes for controlling VOC emissions from bulk
gasoline plants are described in Control of Volatile
Organic Emissions from Bulk Gasoline Plants, EPA-450/2-77-
035. These data provide the alternatives available for con-
trolling VOC emissions from bulk gasoline plants. Several
studies of VOC emission control were also analyzed in detail,
and interviews with petroleum trade associations, bulk plant
operators, and vapor control equipment manufacturers were
conducted to ascertain the most likely types of control
processes which would be used at bulk gasoline plants in
Tennessee. The specific studies analyzed were Evaluation
of Top Loading Vapor Balance Systems for Small Bulk Plants,
EPA 340/1-77-014; Economic Analysis of Vapor Recovery Systems
on Small Bulk Plants, EPA 340/1-77-013; Systems and Costs to
Control Hydrocarbon Emissions from Stationary Sources, EPA
PB-2 36 921; and Study of Gasoline Vapor Emission Controls at
Small Bulk Plants, EPA PB-267-096.
14.1.4 Cost of Vapor Control Systems
The costs of vapor control systems were developed by:
Determining the alternative types of control
systems likely to be used
Estimating the probable use of each type of
control system
Defining systems components
Developing installed capital costs for systems
components
Aggregating installed capital costs for each
alternative control system
Defining a model plant
Developing costs of control systems for the
model plant including
14-3
-------
Installed capital cost
Direct operating costs
Annualized capital charges
Gasoline credit
Net annualized cost
Assigning model plant costs to affected bulk
plants in Tennessee
Aggregating costs to the affected industry in
Tennessee.
Costs were determined from analyses of the following
previous studies:
Control of Volatile Organic Emissions from Bulk
Gasoline Plants, EPA 450/2-77-035
Study of Gasoline Vapor Emission Controls at
Small Bulk Plants, EPA PB-267 096
Economic¦Analysis of Vapor Recovery Systems on
Small Bulk Plants, EPA 340/1-77-013
Evaluation of Top Loading Vapor Balance Systems
for Small Bulk Plants, EPA 340/1-77-014
and from interviews with petroleum marketers' associations,
bulk plant operators, and vapor control equipment manufac-
turers .
Bulk plants' characteristics for the affected bulk
gasoline plants in Tennessee were determined from data in
the Tennessee State Implementation Plans.
14.1.5 Economic Impacts
The economic impacts were determined by analyzing
the lead time requirements needed to implement RACT; assessing
the feasibility of instituting RACT controls in terms of
capital availability and equipment availability; comparing
the direct costs of RACT control to various state economic
indicators; and assessing the secondary effects on market
structure, employment, and productivity as a result of im-
plementing RACT controls in Tennessee.
14-4
-------
14.1.6 Quality of Estimates
Several sources of information were utilized in
assessing the emissions, cost, and economic impact of im-
plementing RACT controls at bulk gasoline plants in Tennessee.
A rating scheme is presented in this section to indicate the
quality of the data available for use in this study. A
rating of "A" indicates hard data (i.e., data that are
published for the base year); "B" indicates data that were
extrapolated from hard data; and "C" indicates data that
were not available in secondary literature and were estimated
based on interviews, analyses of previous studies, and best
engineering judgment. Exhibit 14-1, on the following page,
rates each study output listed and the overall quality of
the data.
14-5
-------
Exhibit 14-1
U.S. Environmental Protection Agency
DATA QUALITY
B C
A Extrapolated Estimated
Study Outputs Hard Data Data Data
Industry statistics •
Emissions •
Cost of emissions •
control
Statewide costs of •
emissions
Economic impact •
Overall quality of •
data
Source: Booz, Allen & Hamilton Inc.
-------
14.2 INDUSTRY STATISTICS
Industry characteristics, statistics, and business
trends for affected bulk gasoline plants in Tennessee are
presented in this section. The discussion includes a
description of the number of facilities and their charac-
teristics, a comparison of the size of the affected bulk
gasoline plant industry to state economic indicators, a
historical characterization and description of the industry,
and an assessment of future industry patterns. Data in
this section form the basis for assessing the impact on the
affected industry from implementing RACT in the urban non-
attainment counties in Tennessee.
14.2.1 Size of the Industry
There are two affected bulk gasoline plants in the
urban non-attainment counties in Tennessee. Industry sales
from affected bulk plants are estimated to be in the range
of $1.36 million, with an estimated yearly throughput of
3.2 million gallons of gasoline. The estimated number of
employees is 10. These data and the sources of information
are summarized in Exhibit 14-2, on the following page.
Annual capital investments have not been estimated. In
general, bulk plant capital investments are for plant and
equipment to replace worn-out facilities, modernize the
establishments or improve operating efficiencies.
14.2.2 Comparison of the Industry to the State Economy
A comparison of the affected bulk gasoline plant
industry to the economy of the State of Tennessee is shown
in this section by comparing industry statistics to state
economic indicators. Employees in the bulk gasoline plant
industry represent an insignificant percent of the total
state civilian labor force of Tennessee. The value of
gasoline sold from the affected bulk plants represents
approximately 0.01 percent of the total value of wholesale
trade in Tennessee.
14.2.3 Characterization of the Industry
Bulk plants are an intermediate distribution point
in the petroleum product marketing network as shown in
Exhibit 14-3, following Exhibit 14-2. Bulk gasoline plants
compete with bulk gasoline tank terminals and large retail
14-6
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Exhibit 14-2
U.S. Environmental Protection Agency
INDUSTRY STATISTICS FOR AFFECTED
BULK GASOLINE PLANTS IN TENNESSEE
Number of
Establishments
Number of
Employees
Sales
Gasoline Sold
; ($ Million, 1977)
(Millions of Gallons)
1.36c
a. Tennessee State Implementation Plans and interviews with state
officials.
b. Booz, Allen & Hamilton estimate based on the ratio of the
number of employees to the number of establishments in 1972.
c. Number of gallons of motor gasoline sold multiplied by the
national dealer tankwagon price in 1977 (42.51C/gallon),
National Petroleum News Factbook, 1978.
d. Estimated from emissions data presented in the Tennessee
State Implementation Plans.
Source: Booz, Allen & Hamilton Inc.
-------
O
o
o
Typical delivery route of truck-trailer
Typical delivery route of account truck
Typical transaction with consumer coming to supplier
Final Produce Usaae
Source: Economic Analysis of Vapor Recovery Systems on Small
Bulk Plants, EPA 340/1-77-013, September 1976, p. 3-2.
-------
gasoline outlets. Ownership and operation of bulk plants
are predominantly by independent jobbers and commissioned
agents but also include cooperatives and salaried employees.
The independent jobber owns the equipment and structures
at his bulk plant, the inventory, and rolling stock, and
he contracts directly with the oil company for gasoline.
A commissioned agent usually does not own the equipment and
facilities but operates the bulk plant for a major inte-
grated oil company.
Bulk gasoline plants are typically located near
towns and small cities, since their predominant market is
agricultural and small retail accounts. The maximum daily
throughput of a bulk gasoline plant ranges from less than
2,000 gallons per day up to 20,000 gallons per day. Exhibit
14-4, on the following page, shows the estimated plant
throughput for the two affected bulk plants in Tennessee.
It is estimated that nationally the majority of the
bulk gasoline plants are up to 25 years old, with a few new
modernized, higher volume plants. Forty years ago, bulk
gasoline plants were a major link in the gasoline distri-
bution network. From that time, their importance has been
declining in the marketing sector of the petroleum industry,
basically for economic reasons. There is evidence that
profitability in bulk gasoline plants has been decreasing.
The number of bulk gasoline plants decreased by 11 percent
nationally from 1967 to 1972 and is predicted to continue
declining in the near term^. This decline is largely
attributable to major oil companies disposing of commission-
agent-operated bulk plants.
1 National Petroleum News Factbook, 1976.
14-7
-------
Exhibit 14-4
U.S. Environmental Protection Agency
BULK GASOLINE PLANT THROUGHPUT
FOR AFFECTED BULK PLANTS
IN TENNESSEE
Bulk Plant
Annual
Gasoline Throughput
A
1,360,000
B
1,840,000
Source: Booz, Allen & Hamilton Inc.
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14.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents information on bulk gasoline
plant operation, estimated VOC emissions from affected
bulk gasoline plant operations in Tennessee, the extent
of current control is use, the requirements of vapor control
required by RACT and the likely RACT alternatives which may
be used for controlling VOC emissions from affected bulk
gasoline plants in Tennessee.
14.3.1 Bulk Gasoline Plant Operations
Bulk gasoline plants are typically secondary distribu-
tion facilities which receive gasoline from bulk gasoline
tank terminals by trailer-transport trucks; store it in
above-ground storage tanks; and subsequently dispense it
via account trucks to local farms, businesses and service
stations. Bulk gasoline plants with an average daily
gasoline throughput of 20,000 gallons per day or less have
been defined by EPA as requiring vapor control equipment
to reduce VOC emissions from bulk gasoline plant operations.
Bulk gasoline plant facilities and operations are
described in Control of Volatile Organic Emissions from
Bulk Gasoline Plants, EPA 450/2-77-035.
14.3.2 Emissions and Current Controls
This section presents the estimated VOC emissions
from the two affected bulk gasoline plants in Tennessee.
It is assumed that both bulk plants employ splash filling
and are not equipped with vapor control equipment. Exhibit
14-5 on the following page, shows the total estimated
emissions in tons per year from the affected bulk gasoline
plants in Tennessee. The estimated VOC actual emissions
from the two bulk plants are 40 tons per year.
14.3.3 RACT Guidelines
The RACT guidelines for VOC emission control from
bulk gasoline plants require the following control systems:
Top submerged or bottom fill of gasoline storage
tanks and outgoing account trucks
Vapor balancing between the incoming trailer-
transport truck and the gasoline storage tank
14-8
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Exhibit 14-5
U.S. Environmental Protection Agency
VOC EMISSIONS FROM AFFECTED BULK
GASOLINE PLANTS IN TENNESSEE
Number of Estimated Annual
Facilities Throughput Total Emissions-
3.2 40
Source: Booz, Allen & Hamilton Inc.
-------
Vapor balancing between the gasoline storage
tank and the outgoing account truck
Proper operation and maintenance of equipment.
Exhibit 14-6, on the following page, summarizes the RACT
guidelines for VOC emissions control from bulk gasoline
plants.
14.3.4 Selection of the Most Likely RACT Alternatives
Control of VOC emission from bulk gasoline plants is
achieved using submerged or bottom filling of storage
tanks and account trucks and vapor balancing between the
loading and unloading of incoming and outgoing trailer-
transport trucks and the gasoline storage tanks. There
are several alternative means of achieving vapor control
at bulk gasoline plants, based on the manner in which the
bulk plant is operated.
Three likely control alternatives, summarized in
Exhibit 14-7, following Exhibit 14-6, are discussed
separately in the paragraphs which follow.
14.3.4.1 Alternative I
Control Alternative I involves top submerged loading
and equipping the bulk plant with a vapor balancing system.
In detail, this control alternative implies:
Submerged filling of gasoline storage tanks
Vapor balancing between the incoming trailer-
transport truck and the gasoline storage tank
Submerged top loading of outgoing account trucks
Vapor balancing of gasoline storage tank and
outgoing account truck
Equipping account trucks with vapor balancing
connections.
It is estimated that both affected bulk plants in
Tennessee would select Control Alternative I to achieve
vapor recovery to meet the state RACT requirements. During
interviews, the industry has questioned whether vapor
14-9
-------
Exhibit 14-6
U.S. Environmental Protection Agency
VOC EMISSION CONTROL TECHNOLOGY FOR
BULK GASOLINE PLANTS
Facilities
Affected
Sources of
Emissions
RACT Control
Guidelines
Bulk plants with
daily throughputs
of 76,000 liters
(20,000 gallons)
of gasoline or less
Vapor displacement
from filling ac-
count trucks, and
breathing losses
and working losses
from storage tanks
Submerge filling and
vapor balancing:
. Vapor balancing of
transport truck and
storage tank
. Vapor balancing of
storage and
account truck
Cracks in seals Proper operation
and connections maintenance
Improper hook up
of liquid lines
and top loading
nozzles
Truck cleaning
Pressure vacuum
relief valves
Proper operation
maintenance
Proper operation
maintenance
Proper operation
maintenance
Source: Control of Volatile Organic Emissions from Bulk Gasoline
Plants, EPA-450/2-77-035.
-------
Exhibit 14-7
U.S. Environmental Protection Agency
ALTERNATIVE CONTROL METHODS
FOR VAPOR CONTROL AT BULK GASOLINE PLANTS
Description of
Alternative Number
Control Method
I
Top submerged filling and
vapor balance entire system
II
Vapor balance existing
bottom filled bulk plant
III
Convert top filled bulk
plant to bottom filled,
and vapor balance total
system.
Source: Booz, Allen & Hamilton Inc. analysis of Control of
Volatile Organic Emissions from Bulk Gasoline Plants,
EPA-450/2-77-035.
-------
recovery by this control method will achieve 90 percent
emissions recovery as stated in the RACT guidelines.
14.3.4.2 Alternative II
Control Alternative II involves implementing a complete
vapor balancing system on bulk plants which currently operate
with bottom filling. In detail this control alternative
encompasses:
Vapor balancing between the incoming trailer-
transport truck and the gasoline storage tank
Vapor balancing between the gasoline storage tank
and the outgoing account truck
Modification of account trucks to accommodate a
vapor recovery connection.
It is estimated that none of the affected bulk gasoline
plants currently use bottom filling.
14.3.4.3 Alternative III
Control Alternative III involves converting top loading
bulk gasoline plants to bottom filling and implementing a
complete vapor balancing system. In detail, this control
alternative entails:
Converting the loading rack to bottom filling
Converting storage tank loading to bottom filling
Vapor balancing the incoming trailer-transport
truck and the gasoline storage tank
Converting the account truck to bottom loading
and installing vapor balancing connections on
the account truck.
The additional cost of converting a bulk plant from
top filling to bottom filling makes Control Alternative III
more costly than Control Alternative I. This additional
cost may be attributable to improved bulk plant operations,
rather than compliance with the proposed limitations.
14-10
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14.4 COST AND HYDROCARBON REDUCTION BENEFIT EVALUATIONS
FOR THE MOST LIKELY RACT ALTERNATIVES
Costs in 1977 dollars for VOC emission control equip-
ment are presented in this section. The costs for the
three alternative control systems described in Section 14.3
are described individually, followed by costs for a typical
bulk plant. The final section then presents a projection
of typical bulk gasoline plant control costs to the
affected industry.
14.4.1 Costs for Alternative Control Systems
The costs for the three alternative control systems
(summarized in Exhibit 14-8, on the following page) were
derived from analysis of the RACT guidelines, from inter-
views with bulk plant operators and petroleum marketing
trade associations and from previous cost and economic
studies of small bulk plants.
Control Alternative I is expected to be the system
used for affected bulk plants in Tennessee. The U.S.
EPA currently endorses the cost estimates developed by
Pacific Environmental Services, Inc. for the Houston/
Galveston area bulk plants. However, several large volume
bulk plant operators who were interviewed have reported
vapor control costs in excess of $50,000 which included
conversion of the loading rack to bottom filling.
Control Alternative II is similar in cost to Control
Alternative I.
Control Alternative III is the most costly control
system. Several bulk gasoline plant operators interviewed
in California and Maryland have adopted this system,
although it cannot be shown from the data in Tennessee
that any bulk gasoline plant operator would be willing to
implement a system this costly. This alternative, therefore,
is not included in the projection of vapor control costs to
the affected industry in the next section.
14.4.2 Costs for Model Bulk Plant
A model bulk plant and its associated vapor control
costs are characterized in this section. The costs are
based on the control estimates for Control Alternative I,
reported by Pacific Environmental Services, Inc. for bulk
14-11
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Exhibit 14-8
U.S. Environmental Protection Agency
COSTS OF ALTERNATIVE VAPOR CONTROL SYSTEMS
Alternative
I
Cost Estimates
National Oil 1 truck (4 corn-
Jobbers Council partments)
estimate
1 loading rack
(3 arms)
3-inch
Pre-set meters
Direct cost
(no labor)
$20,524 (with-
out air)
$22,754 (with
air)
Alternative Alternative
II III
(Includes conversion
to bottom filling)
Similar to costs 1 truck (4 com-
for alternative partments)
I
1 loading rack
(3 arms)
3-inch system
Pre-set meters
Direct cost
(no labor)
$27,729
Pacific Environ-
mental Services
estimate of
Houston/Galveston
area system
1 loading rack
Meters
Average instal-
led cost
$3,200 (without
metering)
$7,700 (with
metering)
Wiggins System
1 truck (4 com-
partments)
1 loading rack
(4 arms)
Pre-set meters
Installed cost
$17,352
$18,416
Source: Booz, Allen & Hamilton Inc.
-------
plants in the Houston/Galveston area. Several other bulk
plant operators have reported costs in excess of $50,000
for vapor control systems although U.S. EPA estimates that
these systems exceed the level of adequacy required to meet
RACT.
Exhibit 14-9, on -the following page, defines a model
bulk plant's characteristics and associated control costs.
It is assumed that the two affected bulk gasoline plants
in Tennessee can be characterized by the model plant.
The costs for the model plant are used in Section 14.4.3
to project costs of vapor control equipment to the affected
industry. The costs for the model plant are:
Installed capital cost, which includes parts
and labor
Annual direct operating costs, expected to be
3 percent of installed capital costs, including
costs for labor, utilities, recordkeeping and
training costs
Annualized capital charges, estimated to be 25
percent of installed capital costs, including
costs for depreciation, interest, maintenance,
taxes, and insurance
Net annualized operating costs, which are the
sum of the capital charges and direct operating
costs. It should be noted that gasoline credit
has not yet been accounted for. Gasoline credit
will be taken into account when the costs are
projected to the affected industry.
Another cost characterization that can be made is hydro-
carbon reduction versus cost. This finding will also be
shown in the affected industrywide analysis.
14.4.3 Projection to the Affected Industry
Exhibit 14-10, following Exhibit 14-9, shows the
projection of vapor recovery costs to the affected industry
in Tennessee. The estimates are based on the following
assumptions:
In Tennessee the affected bulk gasoline
plants 'can be characterized by the model plant
14-12
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Exhibit 14-9
U.S. Environmental Protection Agency
DESCRIPTION AND COST OF A MODEL BULK PLANT
EQUIPPED WITH VAPOR CONTROL
Bulk Plant Model Bulk
Characteristics Plant
Throughput 4,000 gallons/day
Loading racks 1
Storage tanks 3
Account trucks 2
Compartment per account
truck 4
Vapor control system Alternative I
Bulk Plant
Costs
Installed capital cost3 $13,700
Annual direct operating 411
costs @ 3 percent of
installed cost
Annualized capital 3,425
charges @ 25 percent
of installed capital
cost
Net annualized operating 3,836
cost (not including
gasoline credit)
a. Assume $3,000 installed capital cost to modify one four compartment
account truck. Does not include cost of $150 to install submerged
fill pipe.
Source: Booz, Allen & Hamilton Inc.
-------
Exhibit 14-10
U.S. Environmental Protection Agency
INDUSTRY COSTS OF VAPOR CONTROL
SYSTEMS FOR AFFECTED BULK GASOLINE
PLANTS IN TENNESSEE
Characteristics/Cost Item Data
Number of facilities 2
Total annual throughput 3.2
(millions of gallons)
Uncontrolled emissions 40
(tons/year)
Emission reduction 30
(tons/year)
Emissions after RACT control 10
(tons/year)
Installed capital3 27,700
($, 1977)
Direct annual operating cost 830
($, 1977)
Annualized capital charges 6,925
($, 1977)
Annual gasoline credita 393
($, 1977)
Net annualized cost 7,362
($, 1977)
Annualized cost per ton of 245
emissions reduced
($ per ton)
a. Include $300 to equip 2 bulk gasoline plants with submerged fill
pipes.
b. Based on an estimated 10 percent of emissions reduced by converting
from splash fill to submerged fill.
Source: Booz, Allen & Hamilton Inc.
-------
All affected bulk plants will implement the
Control Alternative I vapor control system to
comply with RACT
Actual costs to bulk plant operators may vary depending
on the type of control alternative and manufacturer's
equipment selected by each bulk plant operator.
Based on the above assumptions, the total cost to the
affected industry for installing vapor recovery equipment
is estimated to be $27,700. The amount of gasoline pre-
vented from vaporizing using vapor control is valued at
$393. Ten percent of total emissions can be credited to
the bulk plant since installation of vapor control equip-
ment may reduce emissions by an estimated 10 percent. The
annualized cost per ton of emissions controlled is estimated
to be $245 per ton.
14-13
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14.5 DIRECT ECONOMIC IMPLICATIONS
This section presents the direct economic implications
of implementing RACT controls at the two affected bulk
gasoline plants in Tennessee including availability of
equipment and capital; feasibility of the control tech-
nology; and impact on economic indicators, such as value
of shipments, unit price (assuming full cost passthrough),
state economic variables and capital investment.
14.5.1 RACT Timing
RACT must be implemented by 1982. This implies that
bulk gasoline plant operators must have vapor control
equipment installed and operating within the next three
years. The timing requirements of RACT impose several
requirements on bulk plant operators including:
Determining appropriate vapor control system
Raising capital to purchase equipment
Generating sufficient income from current opera-
tions to pay the additional annual operating
costs incurred with vapor control
Acquiring the necessary vapor control equipment
Installing and testing vapor control equipment
to insure that the system complies with RACT.
The sections which follow discuss the feasibility and the
economic implications of implementing RACT within the
required timeframe.
14.5.2 Feasibility Issues
Technical and economic feasibility issues of imple-
menting RACT controls are discussed in this section.
Several bulk plants in the U.S. have attempted to
implement vapor control systems with varying degrees of
success. One bulk plant operator interviewed in Maryland
implemented vapor recovery at a cost of $65,000 in 197 4.
The operator indicated that recent tests have shown the
system operates well within the 90 percent recovery
requirement of RACT.
14-14
-------
This particular bulk plant was converted to bottom filling
and completely vapor balanced. The plant's throughput was
20,000 gallons per day and included one loading rack and
three account trucks. This plant would be characterized
as installing a sophisticated Alternative III control
system. The plant is also operated by a major oil company,
so capital availability problems were minimized.
Bulk plants in the Houston/Galveston area, on the
contrary, have implemented "bare bone" type control systems
that were individually designed and installed at a bulk
plant which was owned by a major oil company. No emission
data are available to verify whether these systems are in
compliance, but U.S. EPA estimates that these control
systems are sufficient to meet the requirements of RACT.
These systems are not marketed by any equipment manufacturer;
therefore, their availability for widespread application
is doubtful at the present time.
National adoption of RACT regulations will generate a
demand for economical vapor control systems for bulk plants.
It is, therefore, anticipated that off-the-shelf systems
could be developed within the next three years that are
similar to the control system implemented in the Houston/
Galveston area; thus making equipment available.
A number of economic factors are involved in determining
whether a specific bulk plant operator will be able to
implement vapor control systems and still remain profitable.
These include:
Degree of competition
Ability to pass on a price increase
The current profitability of the plant
Age of the plant
State of repair of the plant
Ownership—major oil company or private individual.
It is estimated that small bulk plants, with throughput
less than 4,000 gallons per day, could experience a direct
cost increase o| nearly 0.3 cents per gallon if they
implement RACT. This may affect both affected bulk plants
in Tennessee.
1. Estimated based on dividing net annual cost for model plant
by annual throughput for a 4,000 gallon per day bulk gasoline
plant. This assumes full cost passthrough.
14-15
-------
One small bulk plant operator in Missouri reported
during an interview that his gross profit margin per
gallon of gasoline is 4 to 5 cents per gallon. His net
profit margin is 0.5 cent per gallon. This operator
stated that he plans to discontinue operations rather than
comply with RACT. Again, sufficient data are not available
to determine if this would be true for the two affected
bulk plants in the state. In a previous study of the
economics of vapor recovery for small bulk plants, a
trend of declining profitability in bulk plant operations
was identified.! If this trend continues, vapor control
systems may not be affordable at marginal plants. Many
bulk plants now operate at a profit only because their
plants are fully depreciated. In the same study it was
also determined that a large percentage of small bulk plants
may not be able to raise sufficient capital to purchase
vapor control equipment. Furthermore, it is estimated
that the price of vapor control systems is likely to
increase in the future at a rate greater than the GNP.
One bulk plant operator stated that prices for vapor control
have risen 30 percent over the past three years. Industry
decline may continue and some bulk plant operators may
cease operations because of their present financial con-
dition and the additional financial burden of the RACT
requirements.
The paragraphs which follow compare the affected
statewide compliance costs of RACT control, in 1977 dollars,
to various economic indicators.
14.5.3 Comparison of Direct Cost with Selected Direct
Economic Indicators
This section presents a comparison of the net increase
in the annualized operating cost of implementing RACT with
the total value of gasoline sold from the affected bulk
plants in the state, the value of wholesale trade in the
state, and the unit price of gasoline.
The net increase in the annualized operating cost
to the bulk gasoline plants due to RACT represents 2
percent of the total gasoline sold from affected bulk
gasoline plants in the state. When compared to the state-
wide value of wholesale trade, these annualized cost
increases are minimal. The impact on the unit price of
gasoline varies with the bulk plant throughput.
1. Economic Analysis of Vapor Recovery Systems on Small Bulk
Plants, EPA 340/1-77-013, September 1976.
14-16
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14.6 SELECTED SECONDARY ECONOMIC IMPACTS
This section discusses the secondary impact of imple-
menting RACT on employment, market structure and produc-
tivity .
For bulk gasoline plants that comply with the RACT
requirements, additional manpower requirements are not
likely to be required. Overall bulk gasoline plant
industrial sector employment may continue to decline if
the number of bulk gasoline plants operating in the state
declines further. Based on the statewide estimates of
number of employees and number of bulk plants, an average
of approximately 5 jobs could be lost with the closing
of a bulk plant. No estimate was made of whether the two
affected bulk plants might close due to RACT.
The impact on the market structure for bulk plants
differs significantly in urban and rural areas. The impor-
tance of bulk plants in the urban areas is apparently de-
clining because of competition from retailers and tank
truck terminals and may continue to decline regardless of
RACT requirements.
The productivity of a specific bulk plant will be a
function of the type of vapor control system installed.
If a bulk plant converts to bottom filling along with
vapor recovery, the productivity of the bulk plant should
increase. However, some vapor control systems may decrease
plant productivity if flow rates substantially decline,
requiring longer times to load and unload trucks.
~ ~ ~ *
Exhibit 14-11, on the following-page, presents a
summary of the findings of this chapter.
14-17
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Current Situation
Number of potentially affected
facilities
Indication of relative impor-
tance of industrial section to
state economy
Current industry technology
trends
1977 VOC actual emissions
Industry preferred method of
VOC control to meet RACT
guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
Problem areas
EXHIBIT 14-11
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR AFFECTED BULK GASOLINE
PLANTS IN THE STATE OF TENNESSEE
Discussion
Industry sales from affected bulk plants
were 1.36 million. The estimated annual
throughput was 3.2 million gallons.
Only small percent of industry has new/
modernized plants
40 tons per year
Top submerge fill and vapor balancing
Discussion
$27,700
$7,000 (approximately 0.5 percent of value
of shipments)
Assuming a "direct cost passthrough"
industrywide—$0.0021 per gallon increase
Assuming full recovery of gasoline—net
savings of 200 barrels annually
No major impact
No major impact; however, for plants closing, po-
tential average of 5 jobs lost per plant closed
Regulation could further concentrate a declining
industry. Many small bulk plants today are mar-
ginal operations; further cost increases could
result in plant closings
Severe economic impact for small bulk plant
operations. Control efficiency of cost
effective alternative has not been fully
demonstrated
VOC emissions after control
Cost effectiveness
10 tons per year
$245 annualized cost/annual ton of VOC reduction
Source: Booz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
National Petroleum News Factbook, 1976, McGraw Hill,
Mid-May 197 6.
National Petroleum
News
Factbook,
1977 ,
McGraw Hill,
Mid-May 1977.
National Petroleum
News
Factbook,
1978 ,
McGraw Hill,
Economic Analysis of Vapor Recovery Systems on Small
Bulk Plants, EPA 3 4 0/1-7 7-013, September 1976.
Stage I Vapor Recovery and Small Bulk Plants in Washington,
D.C., Baltimore, Maryland, and Houston/Galveston, Texas,
EPA 340/1-77-010, April 1977.
Evaluation of Top Loading Vapor Balance Systems for Small
Bulk Plants, EPA 340/1-77-014, April 1977.
Regulatory Guidance for Control of Volatile Organic Com-
pound Emissions from 15 Categories of Stationary Sources,
EPA 905/2-78-001, April 1978.
Systems and Costs to Control Hydrocarbon Emissions from
Stationary Sources, PB-236 921, Environmental Protection
Agency, September 1974;
Control of Volatile Organic Emissions from Bulk Gasoline
Plants, EPA 450/2-77-035, December 1977.
Hydrocarbon Control Strategies for Gasoline Marketing
Operations, EPA 450/3-78-017.
Tennessee State Implementation Plans.
Memorandum, "Meeting with EPA and Others on Bulk
Plant Vapor Recovery," National Oil Jobbers Council
Mr. Bob Bassman, Counsel, March 21, 1978.
Letter to Mr. William F. Hamilton, Economic Analysis
Branch, United States Environmental Protection
Agency, from California Independent Oil Marketers
Association, February 28, 1978.
Private conversation with Mr. Clark Houghton,
Missouri Bulk Plant Operator.
-------
Private conversation with Mr. D. L. Adams,
Phillips Petroleum, Towson, Maryland.
Private conversation with Mr. Robert Schuster,
bulk plant operator in Escondido, California.
Private conversation with Mr. Burton McCormick,
bulk plant operator in Santa Barbara, California.
"The Lundburg Letter," Pele-Drop, North Hollywood,
California.
Private conversation with Mr. William Deutsch, Illinois
Petroleum Marketers Association, Springfield, Illinois.
Conversations with Mr. Jerry Chalmers, South Carolina
Department of Health and Environmental Control.
Interviews with Tennessee state officials.
-------
15.0 STORAGE OF PETROLEUM
LIQUIDS IN FIXED-ROOF
TANKS IN TENNESSEE
-------
15.0 THE ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR STORAGE OF PETROLEUM LIQUIDS IN
FIXED-ROOF TANKS IN THE STATE OF TENNESSEE
This chapter presents a detailed analysis of the impact
of implementing RACT controls for the storage of petroleum
liquids in fixed-roof tanks in Tennessee. The major sections
of the chapter include:
Specific methodology and quality of estimates
Technical characteristics of fixed-roof tanks for
storing petroleum liquids
Profile of statewide fixed-roof tank industry and
estimated annual VOC emissions
Cost of controlling VOC emissions
Economic impact.
Each section presents detailed data and findings based
on analyses of the RACT guidelines, previous studies of
fixed-roof storage tanks, interviews with industry represen-
tatives and analysis of the findings.
15-1
-------
15.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining:
Technical characteristics of fixed-roof tanks
Profile of fixed-roof tanks
VOC emissions
Cost of vapor control systems
Economic impact of emission control for the storage
of petroleum liquids in fixed-roof tanks.
The quality of these estimates is discussed in the last
part of this section.
15.1.1 Technical Characteristics of Fixed-Roof Tanks
The technical characteristics of fixed-roof tanks and
processes for controlling their emissions were obtained
mainly from the RACT guideline entitled Control of Volatile
Organic Emissions from Storage of Petroleum Liquids in
Fixed-Roof Tanks, EPA-4501/2-77-036, and from several other
studies of fixed-roof tanks listed in the reference section
of this report.
15.1.2 VOC Emissions and Profile of Fixed-Roof Tanks
The VOC emissions from petroleum liquid storage for
each Air Quality Control Region were provided in the Ten-
nessee State Implementation Plan. The plan shows emissions
from petroleum liquid storage in three non-attainment
counties: Davidson, Hamilton and Shelby* The portion of
the VOC emissions attributable to fixed-roof storage tanks
and the number of tanks in each of the three counties were
obtained from three sources:
The absence of petroleum liquid storage facilities in the
remaining counties was not verified.
15-2
-------
The EPA final report, Hydrocarbon Control Cost-
Effectiveness Analysis for Nashville, Tennessee,
provided the estimated VOC emissions and the num-
ber of fixed-roof tanks in Davidson County.
Appendix I of the State Implementation Plan pro-
vided the estimated VOC emissions and the number
of fixed-roof tanks in Hamilton County.
Total emissions from storage of gasoline and
crude oil in fixed-roof tanks in Shelby County
were obtained from the Memphis and Shelby County
Health Department.
Since the capacity and throughput information were not
available for Davidson and Shelby Counties, estimates were
based upon the emissions, using emissions factors given in , „
EPA AP-42 and an assumed turnover rate of 25 cycles per year. '
15.1.3 Cost of Vapor Control Systems
The costs of vapor control systems were developed by:
Determining the type of control system
Developing installed capital costs for each tank
Developing total annualized costs of control sys-
tems for the number of tanks in the state including:
Installed capital cost
Direct operating costs
Annualized capital charges
Petroleum liquid credit
Net annualized cost
1 Based on throughput data for fixed-roof tanks in the State of
Kentucky supplied by the Kentucky Department for Natural
Resources and Environmental Protection.
2 Since the contents of the tanks were not reported, the tanks
were assumed to store gasoline and the corresponding emission
factors were used.
15-3
-------
Aggregating costs to the total industry in Ten-
nessee.
Costs were determined from analyses of the following
studies:
Control of Volatile Organic Emissions from Storage
of Petroleum Liquids in Fixed-Roof Tanks, EPA 450/
2-77-036
Benzene Emission Control Costs in Selected Segments
of the Chemical Industry, prepared for Manufactur-
ing Chemists Association By Booz, Allen & Hamilton
Inc., June 12, 1978
and from interviews with petroleum marketers' associations,
petrochemical manufacturers and vapor control equipment
manufacturers.
The extrapolation of the estimated cost of control to
Tennessee required a profile of fixed-roof tanks for storing
petroleum liquids in the State. These data were provided by
the above mentioned sources in Section 15.1.2.
15.1.4 Economic Impact of Emission Control
The economic impact of emission control for equipping
fixed-roof tanks used for storing petroleum liquids can be
determined only in terms of the aggregated costs of controls.
Since several industries use fixed-roof tanks, economic im-
pacts on individual industries depend on the extent to which
those industries must bear the increased cost burden. The
economic impact analysis in this report is, therefore,
limited to estimating aggregated costs of controls and
qualitatively assessing the potential impacts of these costs
on various industries.
15.1.5 Quality of Estimates
Several sources of information were utilized in asses-
sing the emissions, cost and eocnomic impact of implementing
RACT controls for fixed-roof tanks in Tennessee. A rating
scheme is presented in this section to indicate the quality
of the data available for use in this study. A rating of
"A" indicates hard data (i.e., data that are published for
the base year); "B" indicates data that were extrapolated
from hard data; and "C" indicates data that were not avail-
able in secondary literature and were estimated based on
interviews, analyses of previous studies and best engineering
judgment. Exhibit 15-1, on the following page, rates each
study output listed and the overall quality of the data.
15-4
-------
Exhibit 15-1
U.S. Environmental Protection Agency
DATA QUALITY
B C
A Extrapolated Estimated
Study Outputs Hard Data Data Data
Industry statistics #
Emissions 9
Cost of emissions control Q
Statewide costs of emissions £
Economic impact 9
Overall quality of data Q
Source: Booz, Allen & Hamilton Inc.
-------
15.2 TECHNICAL CHARACTERISTICS OF AND RACT GUIDELINES FOR
FIXED-ROOF TANKS FOR STORING PETROLEUM LIQUIDS
The technical characteristics of fixed-roof tanks
for storing petroleum liquids, the sources and types of VOC
emitted by these tanks and the control measures for reducing
VOC emission from fixed-roof tanks are described in the EPA
guidelines series, Control of Volatile Organic Emissions from
Storage of Petroleum Liquids m Fixed-Roof Tanks, EPA-450/
2-77-036.
The proposed state regulations call for installation
of an internal floating roof for fixed-roof tanks storing
greater than 42,000 gallons of petroleum liquids with a true
vapor pressure that exceeds 1.52 psi. The guidelines do
not apply to storage tanks equipped with external floating
roofs or to storage tanks having capacities less than
420,00 0 gallons used to store crude oil and condensate
prior to lease custody transfer.1
1 "Custody transfer" means the transfer of produced crude oil and/or
condensate, after processing and/or treating in the production
operations, from storage tanks or automatic transfer facilities
to pipelines or any other forms of transportation.
15-5
-------
15.3 PROFILE OF FIXED-ROOF TANKS FOR STORING PETROLEUM
LIQUIDS AND ESTIMATED VOC EMISSIONS
This section contains a profile of fixed-roof tanks
used for storing petroleum liquids in Tennessee and the es-
timated annual VOC emissions from these tanks.
There are an estimated 17 fixed-roof tanks with greater
than 4 2,000 gallons capacity in the State. The total storage
capacity of these tanks is approximately 11.0 3 million gal-
lons and the annual throughput is estimated at appoximately
276.04 million gallons.
The VOC emissions (1977) for fixed-roof tanks in Ten-
nessee are estimated to be 1,508 tons per year. Through the
implementation of RACT guidelines, these emissions could be
reduced by 90 percent to an estimated 151 tons per year.
Since the data on the content of the tanks were not available,
it was assumed that all potentially affected tanks contained
gasoline.
15-6
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15.4 COST OF CONTROLLING VOC EMISSIONS
This section presents a cost analysis of equipping
fixed-roof tanks used for storing petroleum liquids with
internal floating roofs as a means for controlling VOC
emissions.
The cost factors for emission control equipment include:
Installed capital cost, including parts and labor
Annualized capital charges, estimated to be 25
percent of installed capital cost and including
costs for depreciation, interest, maintenance,
taxes and insurance
Annual direct operating costs, estimated to be 2
percent of installed capital cost including costs
for inspection and recordkeeping
Annual petroleum liquid credit calculated by mul-
tiplying emission reduction by the volume of the
petroleum liquid divided by the liquid density and
multiplied by a value of $0.39 per gallon
Net annualized costs, the sum of the annualized
capital charges and direct operating costs
less the petroleum credit.
Capital equipment costs were determined for each tank from
the graph in Exhibit 15-2, on the following page. This graph
was prepared by Booz, Allen based on interviews with petro-
leum refineries, petrochemical manufacturers, tank manufac-
turers and emission control equipment manufacturers. Total
installed capital cost, including labor, is an estimated two
times the value given on the graph. All costs are for 1977.
A summary of the aggregated cost for the control of
emissions from petroleum liquids stored in fixed-roof tanks
is shown in Exhibit 15-3, following Exhibit 15-2. The total
installed capital costs for equipping approximately 17 fixed-
roof tanks affected by RACT with internal floating roofs is
approximately $1,074 million. The net annualized cost is
approximately $117,000 taking into account a liquid petrc
leum credit of $173,000. The annualized cost per ton of
emissions reduced is $86.
15-7
-------
Exhibit 15-2
U.S. Environmental Protection Agency
INSTALLED COST OF SINGLE SEAL
FLOATING ROOF TANKS
(Prices Approximate)
Source: Communications with Ultra-Float Inc.; 3ccz, Allen s Hamilton Ir.c.
analysis
-------
Exhibit 15-3
U.S. Environmental Protection Agency
VOC EMISSIONS CONTROL COSTS FOR
STORAGE OF PETROLEUM LIQUIDS IN
FIXED-ROOF TANKS IN TENNESSEE
SUMMARY
Plant Characteristics
Number of tanks 17
Total capacity 11.033
(millions of gallons)
Estimated annual throughput 276.04
(millions of gallons)
Uncontrolled emissions 1,508
(tons per year)
Emissions reduction 1,357
(tons per year)
Emissions after control 151
(tons per year)
Costs
Installed capital cost 1.074
($, millions, 1977)
Annualized capital charges 0.269
($, millions, 1977)
Annual direct operating costs 0.021
($, millions, 1977)
Annual petroleum credit 0.173a
($, millions, 1977)
Net annualized cost 0.117
($, millions, 1977)
Annualized cost per ton of emissions reduced 86
($, 1977)
a. Assume value of petroleum liquid saved is $0.39 per
gallon and density of petroleum liquid is 6.1 lbs.
per gallon.
Source: Booz, Allen & Hamilton Inc.
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15.5 DIRECT ECONOMIC IMPACT
This section discusses the economic impact of equipping
fixed-roof tanks used for storing petroleum liquids with an
internal floating roof to control VOC emissions. The impacts
analyzed include: total cost statewide; identification of
industries that may be affected and their ability to raise
the capital needed for the controls.
Installed Capital Cost in Tennessee. An estimated
$1,07 4 million will be required in Tennessee to
equip fixed-roof tanks for storing petroleum
liquids with internal floating roofs. This repre-
sents approximately 1 percent of the value of
petroleum liquid throughput from uncontrolled
fixed-roof tanks in the State.
Industries Affected. Fixed-roof tanks affected by
RACT guidelines are owned by major oil companies,
large petrochemical firms and bulk gasoline tank
terminal companies. These companies are likely to
meet the capital requirements and the source of
capital is likely to be the company's traditional
source of funds.
15-8
-------
15.6 SECONDARY ECONOMIC IMPACTS
It is expected that secondary economic impacts as a
result of implementing RACT guidelines in Tennessee will be
minimal. Employment, worker productivity and market struc-
ture should remain unchanged.
* * * *
Exhibit 15-4 on the following page presents a summary
of the findings of this chapter.
15-9
-------
EXHIBIT 15-4
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR STORAGE OF
PETROLEUM LIQUID IN THE STATE OF TENNESSEE
Current Situation
Number of potentially affected
storage tanks
Indication of relative importance of
industrial section to state economy
Current industry technology trends
VOC emissions
Preferred method of VOC control to
meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
Problem area
VOC emission after control
Cost effectiveness of control
Discussion
17
The annual throughput was an estimated
276 million gallons
Internal floating roof tanks utilizing a
double seal have been proven to be more
cost effective
1/508 tons per year
iSingle seal internal floating roof
Discussion
$1,074 million
$117,000
Assuming a "direct cost" passthrough—
less than $0.000 4 per gallon of through-
put
Assuming 90 percent reduction of current
VOC level, the net energy savings repre-
sent an estimated savings of 9,270
equivalent barrels of oil annually
No major impact
No major impact
No major impact
Potential availability of equipment to
implement RACT standard
150 tons per year
$86 annualized cost/annual ton of VOC
reduction
Source: Booz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
Benzene Emission Control Cost in Selected Segments of the
Chemical Industry, prepared for Manufacturing Chemists
Association by Booz, Allen & Hamilton Inc., June 12, 1978.
Control of Volatile Organic Emissions from Storage of
Petroleum Liquids in Fixed-Roof Tanks, EPA-450/2-77-036,
U.S. Environmental Protection Agency, December 1977.
Regulatory Guidance for Control of Volatile Organic Com-
pound Emissions from 15 Categories of Stationary Sources,
EPA-905/2-78-001, U.S. Environmental Protection Agency,
April 1978.
Revision of Evaporative Hydrocarbon Emission, PB-267 659,
Radian Corp., August 1976.
Tennessee State Implementation Plans.
-------
16.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT STAGE I
FOR GASOLINE SERVICE STATIONS
IN THE STATE OF TENNESSEE
-------
16.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT STAGE I
FOR GASOLINE SERVICE STATIONS
IN THE STATE OF TENNESSEE
This chapter presents a detailed analysis of implement-
ing RACT Stage I controls pertaining to gasoline dispensing
facilities1 in the urban non-attainment areas of Tennessee.
Tennessee RACT guidelines exempt facilities which dispense
less than 260,000 gallons2 of gasoline per year. In
addition, under RACT guidelines, only three counties are
classified as urban non-attainment areas. They are:
Davidson, Hamilton, and Shelby counties.
The impact of RACT in these counties is investigated
in six sections as follows:
Specific methodology and quality of estimates
Industry statistics
The technical situation of the industry
Cost and hydrocarbon reduction benefit evaluations
for Stage I RACT requirements
Direct economic implications
Selected secondary economic impacts.
Each section presents detailed data and findings
based on analyses of the RACT guidelines, previous studies
of gasoline service station vapor recovery, interviews
and analysis.
Gasoline dispensing facility is a generic term which encompasses
both retail facilities and private outlets. The latter are
primarily establishments maintained by governmental, commercial
or industrial consumers for their own fleet operations. The
latter category also includes rural convenience stores, parking
garages, marinas and other retail outlets not classified as
service stations.
The proposed regulation exempts facilities with less than
260,000 gallons throughput per year or with storage tanks
having less than 2,000 gallons capacity. Here it is assumed
that 260,000 gallons is the relevant constraint.
16-1
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16.1 SPECIFIC METHODOLOGY
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 gasoline dispensing facilities in the State of Tennessee.
The quality of the estimates based on a three-point
scale is described in detail in the latter part of this
section.
16.1.1 Industry Statistics
The base year of the analysis is 1977 and all industry
statistics are reported accordingly. When hard data for
the base year are not available, appropriate scaling
factors are applied to existing confirmed data to derive
base year estimates.
To derive the total number of gasoline dispensing
facilities in the three non-attainment counties a two-stage
procedure is used. First, the number of statewide retail
service stations is identified1 and the figure is then
scaled by a factor of 1.372 to produce an estimate of the
number of private dispensing facilities. Next, these two
statewide totals are disaggregated to the county level
using coefficients developed from a Bureau of Census
publication.3 In addition to providing a basis for
estimating the total number of dispensing facilities at
the county level, the census publication is also used to
calculate total county employment levels.
National Petroleum News Fact Book, 1978, p. 105.
The Economic Impact of Vapor Recovery Regulations on the Service
Station Industry, Department of Labor, OSHA, C79911, March
1978, pp. 4-7.
County Business Patterns 1976: Tennessee, U.S. Department of
Commerce, CBP-76-12, 1978.
16-2
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Finally, to derive the volume of gasoline sold in the
non-attainment counties, existing data on state sales
totals1 are disaggregated using coefficients reflecting
the ratio of county establishments to state establishments.
A value is assigned to this sales volume using the 1977
average national service station price (50.7C/gal. exclud-
ing tax).2
16.1.2 VOC Emissions
The Illinois EPA estimated VOC emissions for gasoline
service stations by applying an emission factor to the 1977
gasoline throughput. This emission factor and procedure
were used to calculate emissions in Tennessee.
16.1.3 Processes for Controlling VOC Emissions
Processes for controlling VOC emissions from gasoline
service stations are described in "Design Criteria for
Stage I Vapor Control Systems—Gasoline Service Stations."
This document provides the base data on alternative methods
available for controlling VOC emissions from gasoline ser-
vice stations. In addition, several studies of VOC emission
control were analyzed and interviews with petroleum trade
associations, gasoline service station operators and vapor
control equipment manufacturers were conducted to ascertain
the most likely types of equipment which would be used in
gasoline service stations in Tennessee. The specific
studies analyzed were: Economic Impact of Stage II Vapor
Recovery Regulations: Working Memoranda, EPA-450/3-76-042;
A Study of Vapor Control Methods for Gasoline Marketing
Operations, PB-246-088, Radian Corporation; Reliability
Study of Vapor Recovery Systems at Service Stations,
EPA-450/3-76-001; Technical Support Document, Sta<^e I Vapor
Recovery at Service Stations, draft, Illinois Environmental
Proctection Agency.
1 Federal Highway Administration Forms, MF 25, 26, 21.
2 National Petroleum News Fact Book, 1978, p. 100.
16-3
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16.1.4 Cost of Vapor Control Systems
The cost of vapor control systems were estimated by:
Developing costs of two different control
systems for a model service station including:
Installed capital cost
Direct operating costs
Annualized capital charges
Gasoline credit
Net annualized cost
Determining the mix of control systems likely
to be used in the study area
Extrapolating the model service station costs
to the service stations in the study area.
Based on the analyses of the studies listed previously
and interviews with petroleum marketers' associations,
gasoline service station operators and vapor control
equipment manufacturers, it was estimated that 75 percent
of the gasoline dispensing facilities would install
coaxial or concentric vapor balance systems and the
remaining 25 percent would install the two-point vapor
balance system. Costs were also determined from the data
obtained from these sources.
16.1.5 Economic Impacts
The economic impacts were determined by analyzing
the lead time requirements needed to implement RACT;
assessing the feasibility of instituting RACT controls in
terms of capital and equipment availability; comparing
the direct costs of RACT control to various county economic
indicators; and assessing the secondary impacts on market
structure, employment and productivity resulting from
implementation of RACT controls.
16-4
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16.1.6 Quality of Estimates
Several sources of information were utilized in assess-
ing the emissions, costs, and economic impact of implement-
ing RACT controls on gasoline service stations. A rating
scheme is presented in this section to indicate the quality
of the data available for use in this study. A rating of
"A" indicates hard data (i.e., data that are published for
the base year); "B" indicates data that were extrapolated
from hard data; and "C" indicates data that were not avail-
able in secondary literature and were estimated based on
interviews, analyses of previous studies and best engineer-
ing judgment. Exhibit 16-1, on the following page, rates
each study output and the overall quality of the data.
16-5
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EXHIBIT 16-1
U.S. Environmental Protection Agency
DATA QUALITY
B C
A Extrapolated Estimated
Study Outputs Hard Data Data Data
Industry statistics X
Emissions X
Cost of emissions control X
Countywide costs of X
emissions
Economic impact X
Overall quality of data X
Source: Booz, Allen & Hamilton Inc.
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16.2 INDUSTRY STATISTICS
Industry characteristics, statistics and business
trends for gasoline service stations are presented in
this section. The discussion includes a description of
the number of facilities and their characteristics, a
comparison of the size of the service station industry to
state economic indicators, an historical characterization
and description of the industry and an assessment of
future industry patterns. Data in this section form the
basis for assessing the impact on this industry of implemen-
ting RACT to VOC emissions from gasoline dispensing
facilities in Tennessee.
16.2.1 Size of Industry
In 1977, the three non-attainment counties contained
an estimated 1332 retail gasoline dispensing facilities.
Of these 1332 facilities, an estimated 59 percent1 or 786
had annual throughputs in excess of 260,000 gallons. Put
differently, 41 percent of retail facilities could be
exempted under the proposed regulations. In addition to
the 1,332 retail facilities, there are an estimated 1,825
private dispensing facilities. Of these 1,825 outlets,
only about 1 percent or 18 outlets are estimated to have
annual throughputs in excess of the proposed exemption.
Together these 804 private and retail establishments
dispensed an estimated 651,300,000 gallons of gasoline
valued at $330,200,000 in 1977. These same stations
employed approximately 4,600 workers. Total capital
investments associated with the gasoline dispensing
facilities could not be identifed. For further details
the reader is referred to Exhibit 16-2 on the following
page.
16.2.2 Comparison of Industry to State Economy
Employment and sales are used as reference indicators
in order to gain a perspective on the economic significance
of the gasoline dispensing industry. The estimated 4,600
employees and $330,200,000 in sales constitute approximately
one percent of the civilian labor force and 5.5 percent
U.S. Department of Labor, The Economic Impact of Vapor Recovery
Regulations on the Service Station Industry, C-79911, March 1978,
Appendix tables B-l and B-2.
16-6
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EXHIBIT 16-2
U.S. Environmental Protection Agency
INDUSTRY STATISTICS FOR GASOLINE
SERVICE STATIONS IN TENNESSEE
Number of Facilities
Potentially Affected
Retail
Dispensing
Facilities
786"
Private
Dispensing
Facilities
18
Number of Employees
Retail
4,568
Private
36
Sales
($Billion, 1977)
,e
0.330
Gasoline Sold .
(Billions of Gallons)
0.651f
a. National Petroleum News Fact Book, 1978. County Business Patterns 1976:
Tennessee, The Economic Impact of Vapor Reocvery Regulations on the Service
Station Industry.
b. Includes gasoline dispensing facilities such as marinas, general aviation
facilities, commercial and industrial gasoline consumers and rural con-
venience store operations with gas pumps.
c. Estimate based on the ratio of the number of employees to the number of
establishments (scaled appropriately) in the three counties as of 1976.
Davidson 6.76 employees per retail outlet
Hamilton 4.42 employees per retail outlet
Shelby 5.79 employees per retail outlet
(Source: U.S. Department of Commerce, Bureau of Census, County Business
Patterns 1976: Tennessee, CBP-76-12, 1978)
d. Estimate based on two employees per facility.
e. Number of gallons of motor gasoline sold in 1977 multiplied by the
national service station price in 1977 (50.7C/gallon), National
Petroleum News Fact Book, 1978.
f. Estimate based on Federal highway statistics for 1977.
Source: Booz, Allen & Hamilton Inc.
-------
of retail trade during 1977 in the three counties. In
evaluating these percentages, it should be remembered
that transportation is a vital linking element in the
economy and any significant disruption to the gasoline
dispensing sector could have indirect consequences for
other sectors of the economy.
16.2.3 Characterization of the Industry: Structure and
Trends
Gasoline dispensing establishments are the final dis-
tribution point in the petroleum marketing network.
Exhibit 16-3 shows the position of both retail and private
dispensing facilities with the former located in the bottom
row and the latter primarily in the source marked "Commer-
cial/Industrial Consumer Accounts." As the graphic indi-
cates, all petroleum marketers retail their gasoline through
one of the following type operations:
Direct-salary operation: supplier-"controlled"/
supplier-operated
Lessee dealer: supplier-"controlled"/lessee-
dealer operated
Open dealer: dealer-,,controlled"/dealer-operated
Convenience store.
According to this classification, the retail gasoline dis-
pensing sector has the following dimensions: 18 percent
direct outlets, 5.4 percent convenience stores, 46.9 per-
cent lessee dealers and 29.7 percent open dealers.* See
Exhibit 16-4 for more details.
By way of contrast the private dispensing establish-
ments have the following breakdown by end use: agriculture
trucking and local service, government, taxis, school busses,
and miscellaneous. See Exhibit 16-5 for more details.
Regardless of ownership pattern or end-use category,
gasoline marketing is characterized by high fixed costs,
with operations varying by degree of labor intensity.
Conventional service stations (service bay with mechanics
on duty and nongasoline automotive items available) are
the most labor intensive, while self-service "gas and go"
stations exemplify low labor intensity.
" U.S. Department of Labor, The Economic Impact of Vapor Recovery
Regulations on the Service Station Industry, C-79911, March 1978,
p. 58.
16-7
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EXHIBIT 16-4
U.S. Environmental Protection Agency
U.S. RETAIL GASOLINE DISPENSING FACILITIES
% TOTAL OUTLETS
Direct
Outlets3
Convenience
Stores
Leasee,
Dealer
Open
Dealer*"
Total
Directly
Supplied
Major Oil Company 3.5 0.4
Regional Refiner 2.3 0.1
Independent
Marketer/"Super 9.3 4.3
Jobber"
Small Jobber 2.9 0.6
% Total Outlets 18.0% 5.4%
Total Number of 32,070 9,600
Outlets
28.2
5.3
2.5
15.7
1.1
0.6
10.9 12.3
46.9% 29.7%
83,690 53,030
47.8%
8.8%
16.7%
26.7%
100.0%
178,390
a Company "investment"/company operated
b Company "investment"/leasee dealer
c Dealer "investment"/dealer operated
Source: U.S. Department of Labor, The Economic Impact of Vapor
Recovery Regulations on the Service Station Industry,
C-79911, March 1978, p. 58.
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EXHIBIT 16-5
U.S. Environmental Protection Agency
U.S. PRIVATE GASOLINE DISPENSING FACILITIES
End-Use Sector
Number of
"Private" Gasoline-
Dispensing Outlets
Annual Gasoline
Consumption
% Total
U.S.
Private
Gasoline
Volume
% Total U.S.
Gasoline
Volume
Agriculture
Trucking and
local service
Government
- Federal
- Military
- Other3
Taxis
School Busses
Miscellaneous^
Total Non-Service
Station Segment
Retail Service
Station Segment
All Segments —
32,600
21,900
85,450
5,380
3,070
94,530
242,930
178,390
421,320
3.801.3
5,241.6
227.6
174.1
2.266.4
882.1
144.7
12,497.2
25,235.0
84,412.0
109,647.0
15%
21%
11%
3%
1%
49%
100%
0.9%
0.6%
9.0%
3%
5%
2%
0.8%
0.1%
11%
23%
77%
100%
State and municipal governments.
Auto rental, utilities, and other.
Source: U.S. Department of Labor, The Economic Impact of Vapor
Recovery Regulations on the Service Station Industry,
C-79911, March 1978, p.47.
-------
Finally, no discussion of the industry would be com-
plete without a characterization of major trends. The
number of gasoline dispensing facilities, and in particular
the retail service stations, has been declining nationally
since 1972. At the same time throughput per station has
been rising reflecting the switch to high volume self-
service "gas and go" establishments.1 This trend also
appears in Tennessee and is predicted to continue. In
1972 there were 5,157 service stations and in 1977 this
number fell to 4,017.2
16.2.4 Gasoline Prices
Gasoline prices vary among types of gasoline stations
within a geographical area. Convenience stores are apt
to have higher pump prices than large self-service "gas
and go" stations. The pump price less the dealer tank
wagon price represents the gross margin on a gallon of
gasoline. Retail gasoline service station operating
costs then must come out of the gross margin for gasoline
as well as the gross margin for other products which may
be sold at the service station. Operating costs vary
substantially among the various types of service stations.
It is reported that some service stations operate with
nearly zero net margin or profit on the sale of gasoline,
while others may enjoy up to four to five cents profit
per gallon. Insufficient detail is available on service
stations in Tennessee to present a thorough analysis of
existing price structures and degree of competition in
the industry within the state.
Economic Impact of Stage II Vapor Recovery Regulations: Working
Memoranda, EPA-450/3-76-042, November 1976, p. 2. By 1980
one-half of all retail gasoline stations are expected to be
self-service.
National Petroleum News Fact Book, 1978, p. 105.
16-8
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16.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents information on gasoline dispens-
ing outlet operations, estimated VOC emissions from these
operations in the non-attainment areas, the extent of
current control in use, the vapor control requirements of
RACT and the likely alternatives which may be used for
controlling VOC emissions from gasoline dispensing facili-
ties in Tennessee.
16.3.1 Gasoline Dispensing
Gasoline service stations are the final distribution
point in the gasoline marketing network. Taking retail
and private outlets together the average monthly throughput
per station in the three counties is 39,500 gallons.
These facilities are all subject to RACT regulations and
will be required to comply with Stage I vapor control by
November 1, 1981.
16.3.1.1 Facilities
Equipment at gasoline dispensing facilities includes:
gasoline storage tanks, piping and gasoline pumps. The
most prevalent type of gasoline storage tank is the
underground tank. It was assumed that there are typically
three storage tanks per facility. Gasoline is dispensed
to motor vehicles through pumps and there may be anywhere
from one to twenty pumps per facility. Stage I vapor
control regulations apply to the delivery of gasoline to
the facility and the subsequent storage in underground
tanks.
16.3.1.2 Operations, Emissions and Controls
Uncontrolled VOC emissions at dispensing facilities
come from loading and unloading losses from tank trucks
and underground tanks, refueling losses from vehicle
tanks and breathing losses from the underground tank
vent. Stage I vapor control applies to tank truck unloading
and working and breathing losses from underground storage
tanks.
Tank trucks are unloaded into underground storage
tanks either by splash loading or submerged loading.
Splash loading results in more emissions than submerged
loading.
16-9
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More specifically, losses consist of:
Organic liquid that evaporates into the air that
is drawn in during the withdrawal of the tank
compartment contents
Losses from refilling the underground tank that
occur as vapors are displaced from the tank
Vapors vented into the atmosphere from underground
storage tanks as a result of changes in tempera-
ture and pressure.
Exhibit 16-6 shows the estimated emissions in tons per year
from all dispensing facilities in non-attainment counties.
To arrive at this estimate it is assumed that 90 percent1
of all storage tank loading is by the submerge fill method
and 10 percent by the splash fill method. Given this as-
sumption, emissions based on throughput are estimated to
be 2,514 tons.
16.3.2 RACT Guidelines
The RACT guidelines for Stage I VOC emission control
from gasoline service stations require the following con-
trols :
Submerged fill of gasoline storage tanks
Vapor balancing between the truck and the gasoline
storage tank
Proper operation and maintenance of equipment.
Exhibit 16-7 summarizes the RACT guidelines for VOC emis-
sions control from gasoline service stations.
16.3.3 Selection of the Most Likely RACT Control
Techniques
Stage I control of VOC emissions from gasoline dispens-
ing facilities can be achieved by using vapor balancing •
between the unloading of incoming tank trucks and the gaso-
line storage tank and by submerged filling of storage tanks.
Source: Booz, Allen interviews with industry representatives.
16-10
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EXHIBIT 16-6
U.S. Environmental Protection Agency
VOC EMISSIONS FROM GASOLINE
IN THE STATE OF TENNESSEE
Estimated
Number of
g
Facilities Average Yearly Throughput Total Emissions
(Millions of Gallons) (Tons/Year)
804 651 2,514
a Splash fill emissions: 11.5 lbs/1000 gallons throughput.
Submerge fill emissions: 7.3 lbs/1000 gallons throughput,
assumes no vapor balancing with either method.
Source: Booz, Allen & Hamilton Inc.
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EXHIBIT 16-7
U.S. Environmental Protection Agency
VOC EMISSION CONTROL TECHNOLOGY FOR
GASOLINE DISPENSING FACILITIES
Facilities Affected
Sources of Emissions
RACT Control Guidelines
Gasoline service
stations and gaso-
line dispensing
facilities
Storage tank filling
and unloading tank
truck
Stage I vapor control
system, i.e., vapor
balance system which
returns vapors dis-
placed from the storage
tank to the truck
during storage tank
filling and submerge
filling; instructions to
operator of facility on
maintenance procedures;
repair and replacement
of malfunctioning or worn
equipment; maintenance of
meters and test devices
Source: Regulatory Guidance for Control of Volatile Organic Com-
pound Emissions from 15 Categories of Stationary Sources,
pp. 28-31.
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There are alternative means of achieving vapor balance
based primarily on the method of connecting the vapor re-
turn line to the gasoline storage tank. The two primary
methods for connecting vapor return lines are the two-point
connection and coaxial or concentric connection (often re-
ferred to as tube-in-tube connection). The two-point connec-
tion method involves using two risers with the storage
tank: one for fuel delivery and the other for returning
vapors to the tank truck. The coaxial system uses a con-
centric liquid vapor return line and thus requires only one
tank riser. EPA tests have shown the two-point system to
be more effective than the coaxial system in transferring
displaced vapors, but at the same time the two-point system
is more expensive. It is judged that 25 percent1 of gaso-
line dispensing facilities will install the two-point sys-
tem, bearing a higher installed cost but achieving greater
efficiency. Submerged fill is required by Stage I vapor
control. It is achieved by using a drop tube extending
to within six inches of the storage tank bottom.
Source: Booz, Allen interviews with industry representatives.
16-11
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16.4 COST AND HYDROCARBON REDUCTION BENEFIT EVALUATIONS
FOR STAGE I RACT REQUIREMENTS
Costs for VOC emission control equipment are presented
in this section. The costs for a typical gasoline service
station are described, followed by an extrapolation to
the urban non-attainment county industry.
16.4.1 Costs for Vapor Control Systems
The costs for vapor control systems were developed
from information provided by petroleum marketing trade
associations and from previous cost studies of gasoline
dispensing facilities. These costs are summarized for a
typical gasoline dispensing facility in Exhibit 16-8.
The monthly throughput of an affected retail facility
averages out at 67,000 gallons or 28,000 gallons above
the average for all retail facilities in the United
States.1 Though Tennessee facilities are above the U.S.
average, in general, service station equipment requirements
(number of storage tanks) are not very sensitive to
throughput over a large gallon range. Therefore, it
appears that Tennessee facilities should be quite similar
to the prototype facility described in Exhibit 16-8.
Given this observation, Stage I vapor control costs have
been estimated as follows.
Capital costs of installing the two-point vapor-balancing
equipment at existing service stations are about $2,000
per station. This cost includes equipment costs ($300-$500)
and installation ($1,300-$1,600) .2 The installed capital
cost for a coaxial or concentric system is reported by
U.S. EPA to be $150 to $200 per tank, including parts and
labor. Annualized capital costs are estimated at 25
percent of installed capital cost and include interest,
depreciation, taxes and maintenance.
U.S. Department of Labor, 0SHA, The Economic Impact of Vapor
Recovery Regulations on the Service Station Industry, C-79911,
March 1978, p. 29.
Air Pollution Control Technology Applicable to 26 Sources of
Organic Compounds, U.S. Environmental Protection Agency, May
27, 1977. (This cost includes excavation and construction of
manifolded storage tanks.)
16-12
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EXHIBIT 16-8
U.S. Environmental Protection Agency
STAGE I VAPOR CONTROL COSTS FOR A
TYPICAI RETAIL GASOLINE DISPENSING FACILITY
Description of Model Gasoline Station
Monthly throughput (gallons) 39,000^
Number of storage tanks 3
Costs
($, 1977)
Installed capital ^
Annualized capital charges
Direct operating cost
Annualized cost
Two Point
System
2,000C
500
0
500
Coaxial or
Concentric
System
600
150
0
150
39,000 is the national average. In Tennessee's non-
attainment county the average is 67,000 for retail dispensing
outlets, 8,220 for private outlets and private outlets.
In private dispensing outlets, the number of tanks is assumed
to be one as opposed to three. On the average, private stations
have monthly throughput flows of only 22 percent of throughput
in retail service stations.
Includes cost of repaving but does not account for lost sales
due to down time.
Twenty-five percent of installed capital cost. Includes
depreciation, interest, taxes, insurance and maintenance.
Does not include credit for recovered gasoline.
Source: Booz, Allen & Hamilton Inc.
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Based on these figures, the annualized cost1 at a
typical retail gasoline dispensing facility with 67,000
gallons/month throughput is estimated to be $500 for the
two-point system and $150 for the concentric or coaxial
system. It is worth noting that direct operating costs
should not increase due to Stage I controls and thus the
annualized cost will reflect only the capital charges as-
sociated with the control equipment.
In addition to the cost incurred at the gasoline
dispensing facility, there are also the costs of vapor
balancing borne by the owners of the tank trucks. The
costs to bulk gas plants and terminals of Stage I vapor
modifications of fleet trucks have been discussed in
other chapters. Here the focus is on independent fleet
operators subject to RACT vapor controls. By approximating
the total number of tank trucks needed to service the
gasoline dispensing facilities in the non-attainment
counties, and by subtracting from this total the estimated
number of trucks controlled by bulk terminals and gas
plants, the size of the independent fleet is derived.
Booz, Allen estimates that roughly 374 tank trucks require
vapor modification.2
The cost of vapor control modification on trucks is
estimated to be between $2,000 and $7,200 depending on
whether top or bottom loading methods are used. For pur-
poses of this analysis, it is assumed that the less
expensive top loading method will be used, and that this
system can be installed at a cost of $3,000 per truck.
At 374 trucks total cost is $1,112,000. Annualized
capital costs are estimated at 25 percent of installed
capital cost and include: interest, depreciation, taxes
and maintenance. Direct operating costs are assumed to
be zero. See Exhibit 16-9 on the following page for more
details.
Gasoline recovery credit has not been accounted for here, but
will be when the results are extrapolated to the countywide
industry.
U.S. Environment Protection Agency, Survey of Gasoline Tank
Vehicles and Rail Cars, EPA-68-02-2606, Preliminary Draft, pp.
1-3 and 2-10. Total stock of tank trucks is estimated to be
85,000. Booz, Allen estimates that statewide there are 1902
trucks and in non-attainment areas 628. Of these 628, it is
estimated that 254 trucks are controlled by the bulk plants and
terminals.
16-13
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EXHIBIT 16-9
U.S. Environmental Protection Agency
STAGE I VAPOR CONTROL COSTS
FOR A TYPICAL GASOLINE DISPENSING TRUCK
Costs
($, 1977)
Top Loading
Method
Installed capital3 ^ 3,000
Annualized capital charges 750
Direct operating cost 0
Annualized cost 750
Booz, Allen interviews with equipment manufacturers.
k 25 percent of installed capital cost. It includes
depreciation, interest, taxes, insurance and maintenance.
Source: Booz, Allen & Hamilton Inc.
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16.4.2 Extrapolation to the Industry in Non-Attainment
Areas
Exhibit 16-10 shows the extrapolation of vapor
control costs to the non-attainment area-wide industry.
Costs include truck modifications and vapor control at
the gasoline dispensing facilities. It should be noted
that actual costs to the operators of trucks and gasoline
dispensing outlets may vary depending on the control
method and specific equipment selected.
The total cost to the industry of installing vapor
control equipment is estimated to be approximately
$1,875,00c1. The amount of gasoline prevented from
vaporizing by converting to submerged filling of the
gasoline storage tank is estimated to be worth approxi-
mately $22,700. Based on these estimates, the annual
cost per ton of emissions controlled was $186.00 per ton.
The figure may be understated if the regulation calls for control
of all storage tanks larger than 2000 gallons rather than the
throughput exemptions applied in this analysis. Preliminary
data suggest that in Davidson County perhaps 25 percent of all
storage tanks are smaller than 2000 gallons in capacity. If
this is true and if Davidson is permitted to use the 2,000
gallon rule, then total capital costs will rise by $149,000.
16-14
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EXHIBIT 16-10
U.S. Environmental Protection Agency
NON-ATTAINMENT AREA COSTS FOR STAGE I VAPOR
CONTROL OF GASOLINE DISPENSING FACILITIES
SUMMARY OF COSTS
Number of facilities
Total annual throughput
(billions of gallons)
Uncontrolled emissions
(tons/year)
Emissions reduction
(tons/year)
Uncontrolled emissions
(tons/year)
Installed capital
($ millions)
dispensing facilities
tank trucks
Annualized capital cost
($ millions)
dispensing facilities
tank trucks
Annual gasoline credit
($ millions)
Net annualized cost
($ millions)
Net annualized cost per ton $186
of emissions reduced
($ per ton/year)
Estimate based on 95 percent reduction in emissions.
Gasoline credit to dispensing outlets is based on the
conversion from splash to submerged filling. The actual
formula relates throughput in splash fill facilities to
potential captured vapors resulting from equipment con-
version, and values the recoverable gasoline at its retail
selling price (50.7C/gallon). Bulk terminals also receive
a gasoline credit for the recovered vapors brought back by
tank trucks. This gasoline is estimated to be worth
$327,000 when valued at the bulk wholesale price (42C/gallons).
Source: Booz, Allen & Hamilton Inc.
804
0.651
2,514
2,388a
126
1.875
0.753
1.122
0.468
0.188
0.280
0.023b
0.445
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16.5 DIRECT ECONOMIC IMPLICATIONS
This section discusses the direct economic implica
tions for the non-attainment counties of implementing
Stage I RACT controls.
16.5.1 RACT Timing
RACT must be implemented statewide by November 1, 1981.
This means that gasoline service station operators must
have vapor control equipment installed and operating with-
in the next three years. The timing deadlines of RACT im-
pose several requirements on service station operators in-
cluding:
Determining the appropriate method of vapor
balancing
Raising capital to purchase equipment
Generating sufficient income from current
operators to pay the additional annual operat-
ing costs incurred with vapor control
Acquiring the necessary vapor control equipment
Installing and testing vapor control equipment
to ensure that the system complies with RACT.
16.5.2 Feasibility Issues
Technical and economic feasibility issues of imple-
menting RACT controls are discussed in this section.
Gasoline service stations in several air quality con-
trol regions of the U.S. have successfully implemented
Stage I vapor control systems.
State adoption of Stage I RACT regulations will gen-
erate additional demand for the vapor control systems for
gasoline service stations. However, it is estimated that
off-the-shelf systems will be readily available within the
next three years, thus making equipment available.
16-15
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A number of economic factors are involved in determin-
ing whether a specific establishment will be able to imple-
ment vapor control systems and still remain profitable.
These include:
Ability to obtain financing
Ownership—major oil company or private individual
Ability to pass on a price increase
The current profitability of the establishment
Age of the establishment.
A major finding in a study on gasoline service station
vapor control was that small service stations could have
problems raising the necessary capital to purchase and in-
stall vapor control equipment. The inability to raise the
necessary capital to install vapor control equipment could
cause the closing of some service stations.1
Service stations that are owned by major oil companies
may have better access to capital than privately owned
service stations. A private service station owner may have
to borrow capital from local banks, friends or relatives,
whereas a station owned by a major oil company may receive
funding out of the oil company's capital budget.
It is estimated that small gasoline service stations
with throughput less than 30,000 gallons per month will
experience a cost increase of nearly 0.10 cents per gallon
to implement RACT, using the two-point vapor balance sys-
tem. However, most of these facilities will be exempted in
Tennessee. Larger service stations will experience a cost
increase only one-fifth as much. But regardless of actual
size the smaller stations will be at a competitive disad-
vantage in terms of passing on a price increase.
Recent experience indicates that temporary disruption
due to Stage I RACT control can have serious impacts on
the service stations' profitability. In an interview, the
Greater Washington/Maryland Service Station Association
reported that several service stations experienced a loss
Economic Impact of Stage II Vapor Recovery Regulations: Working
Memoranda, EPA-450/3-76-042, November 1976.
16-16
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of business for up to three weeks while Stage I vapor
control was being installed. Service station driveways
were torn up, greatly restricting access to pumps. In
some instances, oil company owned service stations were
sold or closed down because the oil companies did not
want to expend funds for vapor control at marginally
profitable operations.
The older service stations reportedly will experience
greater costs than new service stations when implementing
Stage I vapor control requirements. This is because
older stations will have more extensive retrofit requirements
and will probably experience more temporarily lost business
during the retrofit.
The number of gasoline service stations has been de-
clining nationally over the past few years for a number
of reasons, reflecting a trend towards reducing overhead
costs by building high throughput stations. This trend
is likely to continue whether or not vapor control is
required. Implementation of Stage I RACT control may
simply accelerate this as marginal operators may opt not
to invest in the required capital equipment. Sufficient
data for Tennessee are not available to quantify the
magnitude of this impact.
16.5.3 Comparison of Direct Cost With Selected Direct
Economic Indicators
The net increase in the annualized cost to the
gasoline service station industry from RACT represents
0.05 percent of the value of the total gasoline sold in
the affected facilities in the urban non-attainment
counties. Compared to the countywide value of retail
trade, this annual cost increase would be insignificant.
The impact on the unit price of gasoline varies with the
gasoline service station throughput. As mentioned in the
preceding section, the small stations, with less then
30,000 gallons per month throughput, may experience an
annualized cost increase of up to 0.10 cents per gallon
of gasoline sold, whereas the larger service stations may
experience an annualized cost increase only one-third as
large.
16-17
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16.6 SELECTED SECONDARY ECONOMIC IMPACTS
This section discusses the secondary impact of imple-
menting RACT on employment, market structure, and gasoline
station operation.
Employment is expected to decline, if a number of small
marginally profitable gasoline service stations cease op-
erating rather than invest capital for compliance with
RACT. Based on the countywide estimates of number of
employees and the number of facilities, approximately three
jobs will be lost with the closing of each gasoline dis-
pensing outlet. No estimate was made of the total number
of facilities that may close due to RACT.
The market structure is not expected to change signif-
icantly because of Stage I vapor control requirements.
The dominant industry trend is towards fewer stations with
higher throughputs. This trend will continue with or
without RACT. Those marginal facilities which do close
because of RACT will merely enhance the existing industry
trend towards greater concentration.
The productivity impact on a specific service station
operation is expected to be slight. Fill rates for loading
gasoline storage tanks may marginally decline if coaxial or
concentric vapor hose connections are used.
* * * *
Exhibit 16-11, on the following page, presents a
summary of the findings of this report.
16-18
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EXHIBIT 16-11
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR GASOLINE DISPENSING
FACILITIES IN THE STATE OF TENNESSEE
Current Situation
Number of potentially affected facilities
Indication of relative importance of
industrial sector to county economy.
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC control
to meet RACT guidelines
Assumed method of control to meet RACT
guidelines
Affected Areas in Meeting RACT
Capital investment (3 counties)
Annualized cost (3 counties)
Price
Energy
Productivity
Employment
Market structure
Discussion
804 in the 3 urban non-attainment counties.
3 county industry sales from the affected
facilities are $0,330 million with a yearly
throughput of 0.651 billion gallons
Number of stations has been declining
and throughput per station has been
increasing. By 1980, one-half of
stations in U.S. are predicted to
become totally self-service
2514 tons per year from tank loading
operation
Submerged fill and vapor balance
Submerged fill and vapor balance
Discussion
$1.9 million
$0.47 million (approximately 0.1 percent
of the value of gasoline sold)
Assuming a "direct cost pass-through"—
less than $0,001 per gallon of gasoline
sold in the 3 counties.
Assuming full recovery: 770,300 gallons/
year £15,900 barrels of oil equivalent)
saved
No major impact
No major impact
Compliance requirements may accelerate
the industry trend towards high through-
put stations (i.e., marginal operations
may opt to shut down)
3 One gallon of gasoline has 125,000 BTU's. One barrel of oil
equivalent has 6,050,000 BTU's.
-------
BIBLIOGRAPHY
Economic Impact of Stage II Vapor Recovery Regulations:
Working Memoranda, EPA-450/3-76-042, November 1976.
National Petroleum Fact Book, 1978, McGraw Hill,
Mid-June 1978.
Cost Data-Vapor Recovery Systems at Service Stations,
PB-248 353, September 1975.
Human Exposure to Atmospheric Benzene, EPA Contract
No. 68-01-4314, October 1977.
Reliability Study of Vapor Recovery Systems at Service
Stations, EPA-450/3-76-001, March 1976.
Regulatory Guidance for Control of Volatile Organic
Compound Emissions from 15 Categories of Stationary
Sources, EPA-905/2-78-001, April 1978.
Systems and Costs to Control Hydrocarbon Emissions
from Stationary Sources, PB-2 36 9 21, Environmental
Protection Agency, September 1974.
Private conversation with Mr. Vic Rasheed, Greater
Washington/Maryland Service Station Association.
"The Lundburg Letter," Pele-Drop, North Holywood,
California.
Revision of Evaporative Hydrocarbon Emission Factors,
Radian Corporation, PB-267 659, August 1976..
A Study of Vapor Control Methods for Gasoline Marketing
Operations, Radian Corporation, PB-246 088, April 1975.
Design Criteria for Stage I Vapor Control Systems
Gasoline Service Stations, U.S. EPA, November 1975.
Operations, EPA-450/3-78-017, April 1978.
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17.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
USE OF CUTBACK ASPHALT
IN THE STATE OF TENNESSEE
-------
17.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
USE OF CUTBACK ASPHALT
IN THE STATE OF TENNESSEE
This chapter presents a detailed analysis of the
impact of implementing RACT for use of cutback asphalt in
the State of Tennessee. The impact of RACT in this state
is investigated in five sections as follows:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Cost and hydrocarbon VOC reduction benefit
evaluations for RACT requirements
Economic impacts
Each section presents detailed data and findings
based on review of the RACT guidelines, previous studies
of the use of cutback asphalt, interviews and analysis.
17-1
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17.1 SPECIFIC METHODOLOGY, AND QUALITY OF ESTIMATES
This section describes the methodology for determining:
Industry statistics
VOC emissions
Control of VOC emissions
Cost of controlling VOC emissions
Economic impact of emission control
Data quality
for the use of cutback asphalt in Tennessee.
17.1.1 Industry Statistics
Industry statistics on the use of cutback asphalt
were obtained from the U.S. Bureau of Mines. Sales in
tons were available for 1977. The value of shipments was
calculated by applying an average unit price of 36 cents
per gallon.
17.1.2 VOC Emissions
VOC emissions from the use of cutback asphalt in
Tennessee were calculated by multiplying the emission
factors for cutback asphalt by the number of tons of
asphalt used. The emission factor for slow cure asphalt
is 0.078 tons per ton, for medium cure asphalt 0.209 tons
per ton, and for rapid cure asphalt 0.20 tons per ton.1
17.1.3 Process for Controlling VOC Emissions
The process for controlling VOC emissions from the
use of cutback asphalt is described in Control of Volatile
Organic Compounds From the Use of Cutback Asphalt,
EPA-450/2-77-037, and Air Quality and Energy Conservation
Benefits from Using Emulsions to Replace Cutbacks in
Certain Paving Operations, EPA-450/12-78-004. Interviews
were conducted with asphalt trade associations, asphalt
producers, and government agencies to gather the most
up-to-date information on: costs for cutback asphalt and
asphalt emulsions, the feasibility of using emulsions in
Control of Volatile Organic Compounds from the Use of Cutback
Asphalt, EPA-4502-77-037, pp. 1-3.
17-2
-------
place of cutback asphalt and the associated cost implications.
Other sources of information were "Mineral Industry
Surveys," U.S. Bureau of Mines; "Magic Carpet, the Story
of Asphalt," The Asphalt Institute; "Technical Support
for RACT Cutback Asphalt," State of Illinois; "World Use
of Asphalt Emulsion," paper by Cyril C. Landis, Armak
Company, "A Brief Introduction to Asphalt and Some of Its
Uses," The Asphalt Institute; and "Asphalt: Its Composition,
Properties and Uses," Reinhold Publishing corporation.
17.1.4 Cost of Vapor Control
The costs for control of VOC emissions from the use of
cutback asphalt are incurred by using emulsions in place of
cutback asphalt. These costs include:
Changes in equipment for applying emulsions in
place of cutback asphalt
Training of personnel to work with asphalt
emulsions in place of cutback asphalt.
Additionally, if every state incorporates the RACT
guidelines, additional plant capacity to produce asphalt
emulsions would have to be created.
Costs were determined from analyses of the studies
listed in the previous section and from interviews with
asphalt trade associations, government agencies and pro-
ducers and users of cutback asphalt and emulsions. These
differential costs of replacing cutback asphalt with asphalt
emulsions were then extrapolated to the non-attainment
counties in the state.
17.1.5 Economic Impacts
The economic impacts were determined by examining the
effects of conversion to emulsion asphalts on: the costs
of paving and road maintenance; the price of cutback and
emulsion asphalts; the supply and demand for these asphalts;
the employment of workers in end-use applications; and on
labor productivity in end-use applications.
17-3
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17.1.6 Quality of Estimates
Several sources of information were utilized in assess-
ing the emissions, cost and economic impact of implementing
RACT for the use of cutback asphalt. A rating scheme is
presented in this section to indicate the quality of the
data available for use in this study. A rating of "A" in-
dicates hard data (i.e., data that are published for the
base year); "B" indicates data that were extrapolated from
hard, data; and "C" indicates data that were not available
in secondary literature and were estimated based on inter-
views, analyses of previous studies and best engineering
judgment. Exhibit 17-1, on the following page, rates each
study output listed and the overall quality of the data.
17-4
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Study Outputs
Industry statistics
Emissions
Cost of emissions control
Statewide costs of
emissions
Economic impact
Overall quality of data
EXHIBIT 17-1
U.S. Environmental Protection Agency
DATA QUALITY
B C
A Extrapolated Estimated
Hard Data Data Data
X
X
X
X
X
X
Source: Booz, Allen & Hamilton Inc.
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17.2 INDUSTRY STATISTICS
This section presents information on the cutback as-
phalt industry, statewide statistics of cutback asphalt
use, and comparison of cutback asphalt consumption to the
statewide value of wholesale trade. A history of the use
of cutback asphalt is also discussed. Data in this
section form the basis for assessing the technical and
economic impacts of implementing RACT in Tennessee.
17.2.1 Industry Description
The cutback asphalt industry encompasses the produc-
tion and use of cutback asphalt. Cutback asphalt is one
product resulting from the refining and processing as as-
phalt from crude oil. Cutback asphalt is produced from
refined asphalt and petroleum liquids at an asphalt
mixing plant. It is then stored in tanks or loaded into
tank trucks and sold to the end users, primarily state
highway organizations and construction contractors.
17.2.2 Size of the Cutback Asphalt User Industry
This report addresses the size of the cutback asphalt
user industry in Tennessee. Although cutback asphalt may
be produced in Tennessee, the production industry is not
the focus of this study since RACT requires control of
the use.of cutback asphalt. Fourteen thousand nine
hundred fifty-six tons of cutback asphalt were purchased
in Tennessee in 1977 at a value of $1.4 million. The
value is based on an estimated average price per gallon
of $0.36.
Though the uses of cutback asphalt in Tennessee are
well documented, hard data on the number of employees
involved in cutback paving operations are not currently
available. Still, it is possible to make a reasonable
estimate of the number of employees based on data found
in the Department of Commerce County Business Patterns.
17-5
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It is estimated that statewide approximately 9251 people
are engaged in operations where cutbacks can be used.
17.2.3 Comparison to Statewide Economy
The ratio of value of shipments of cutback asphalt to
the statewide value of wholesale trade in Tennessee is less
then 0.022 percent.
17.2.4 Demand for Cutback Asphalt
In the 1920fs and 1930's, the increasing sales of
automobiles stimulated highway construction. The need
for low-cost pavement binders which provided weather
resistance and dust-free surfaces became apparent during
this building cycle. Cutback asphalts emerged to fill
this need. After World War II, the sale of cutback
asphalts remained at an almost constant level. Since
1973, the use of cutback asphalt has decreased. Exhibit
17-2, on the following page, shows national sales from
1970 to 1976 of cutback asphalt, asphalt cement, and
asphalt emulsions.
17.2.5 Prices of Products and Costs of Usage
Historically, cutback asphalts have been up to 10
percent more expensive per gallon than asphalt emulsions.
In recent years, this differential has been negligible;
however, in the past two years the historical price
disadvantage has begun to reemerge.
Statewide, approximately 4,801 people were employed in highway
and street construction. It is assumed that the number of
people employed in cutback and emulsion applications is propor-
tional to the A,801 people in the same ratio as most of 1977
state sales of cutbacks and emulsions to 1977 state sales of
all petroleum asphalts and road oils. At an estimated ratio of
19 percent, the employment statewide is approximately 925. See
County Business Patterns 1976: Tennessee, U.S. Department of
Commerce CBP-76-12, 1978, p. 3.
Source: U.S. Department of Commerce, Bureau of the Census
17-6
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ASPHALT CEMENT
Percent
YEAR Use of of Total
(000 of tons)
1970 17,158 72.7
1971 17,612 73.8
1972 18,046 74.2
1973 20,235 74.8
1974 19,075 77.4
1975 16,324 75.7
1976 16,183 75.3
EXHIBIT 17-2
U.S. Environmental Protection Agency
HISTORICAL NATIONAL SALES OF ASPHALT CEMENT,
CUTBACK ASPHALT AND ASPHALT EMULSIONS
CUTBACK ASPHALT ASPHALT EMULSIONS TOTAL
Percent Percent
Use of
of Total
Use of
of Total
Use of
(000 of tons)
(000 of tons)
4,096
17.4
2,341
9.9
23,594
3,994
16.7
2,275
9.5
23,821
3,860
15.9
2,399
9.9
24,305
4,220
15.6
2,585
9.6
27,040
3,359
.13.6
2,208
9.0
24,642
3,072
14.2
2,197
10.1
21,593
3,038
14.2
2,254
10.5
21,474
Source: U.S. Bureau of Mines
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The comparison between cutbacks and emulsions is some-
what different when one looks at quantity requirements.
Though technically interchangeable in many applications, it
is typically the case that more emulsion must be applied
than cutback for an identical task. This is because emul-
sions have a lower asphalt content than cutbacks on a per
gallon basis. Estimates on quantity conversions (substi-
tutability) range from one-to-one to one-to-two in favor
of cutbacks depending on the type of emulsion and the
given application.
However, in terms of average cost of usage, currently,
price and quantity differentials tend to be offsetting.
Thus the cost of usage should be approximately the same.
Interview materials from The Asphalt Institute, College Park,
Maryland
Ibid. Contentions that the price per mile of emulsions is cheaper
than oil-based asphalts are currently being made. Though true,
the contention is misleading because the comparison is between
hot mix asphalts and emulsions in overlay applications. Cutbacks
are not used in overlay applications.
17-7
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17.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents information on the use and pro-
duction of asphalt. The sources and characteristics of
VOC emissions from the use of cutback asphalt are then des-
cribed and are followed by: estimated statewide VOC emis-
sions from the use of cutback asphalt; the VOC control
measures required by RACT, and the VOC emission control
procedure for use of cutback asphalt in Tennessee.
17.3.1 Asphalt: Its Production and Uses
Asphalt is a product of the distillation of crude oil.
It is found naturally and is also produced by petroleum
refining. In the latter instance, the crude oil is dis-
tilled at atmospheric pressure to remove lower boiling
materials. Nondistillable asphalt is then recovered from
selected topped crude by vacuum distillation; oil and wax
are removed as distillates; and the asphalt is left as a
residue. Asphalts can be produced in a variety of types
and grades ranging from hard brittle solids to almost water-
thin liquids. The type of asphalt produced depends on its
ultimate use.
Asphalt is used as a paving material and in a wide
range of construction applications. The cutback and emul-
sion asphalts that are the object of RACT legislation are
paving materials used primarily in spraying and cold mix
patching operations. For further information on asphalt
production and use the reader is referred to: A Brief
Introduction to Asphalt and Some of Its Uses, The Asphalt
Institute, 1977.
17.3.2 Sources and Characteristics of VOC Emissions From
the Use of Cutback Asphalt
Hydrocarbons evaporate from cutback asphalts at the
job site and at the mixing plant. At the job site, hydro-
carbons are emitted from equipment used for applying the
asphaltic product and from road surfaces themselves. At
the mixing plant, hydrocarbons are released during mixing
and stockpiling. The largest source of emissions, however,
is the road surface itself. In Tennessee, cutback asphalt
is used in the construction and maintenance of secondary
roads throughout the state.
17-8
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It is the petroleum distillate (diluent) in the
cutback asphalt that evaporates. The percentage of
diluent that evaporates depends on the cure type.
The evaporating diluent in the three types of cutback
asphalt constitutes the following percent of the asphalt
mix by weight:
Slow cure—25 percent
Medium cure—70 percent
Rapid cure—80 percent.
17.3.3 Statewide Emissions
Total emissions from the use of cutback asphalt in
Tennessee during 1977 are estimated to be 3,075 tons. But
given permitted RACT exemptions on cutback curtailment,
only 1,540 tons will be subject to control.1 See Exhibit
17-3 for details.
17.3.4 RACT Guidelines and the Implications of Their
Implementation
The RACT guidelines specify that the manufacture,
storage and use of cutback asphalts may not be permitted
unless: long-life storage is necessary; application at
ambient temperatures below 50°F is necessary; or applica-
tion as a penetrating prime coat is necessary.
Given these exemptions, general experience with asphalt
emulsions in several regions of the U.S. indicates that
emulsions are adequate substitutes for cutbacks.2 Moreover,
the same equipment that is used to apply cutback asphalt
can be used with asphalt emulsions after minor modification.
The few changes necessary to replace cutback asphalt with
emulsion asphalt are as follows:
Representatives of the Tennessee Department of Transportation,
Bureau of Highways indicated that RACT exemptions could account
for 50% of current cutback usage.
It is reported that emulsions cannot be applied in the rain.
This is also true for rapid and medium cure cutbacks.
17-9
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It is the petroleum distillate (diluent) in the
cutback asphalt that evaporates. The percentage of
diluent that evaporates depends on the cure type.
The evaporating diluent in the three types of cutback
asphalt constitutes the following percent of the asphalt
mix by weight:
Slow cure—25 percent
Medium cure—70 percent
Rapid cure—80 percent.
17.3.3 Statewide arid Non-Attainment Area Emissions
Total emissions from the use of cutback asphalt in
Tennessee during 1977 are estimated to be 3,075 tons. But
given permitted RACT exemptions on cutback curtailment,
only 1,540 tons will be subject to control.1 See Exhibit
17-3 for details.
17.3.4 RACT Guidelines and the Implications of Their
Implementation
Presently, the State of Tennessee is preparing draft
legislation on the use of cutback asphalt which will be
modeled after the RACT guidelines.
The RACT guidelines specify that the manufacture,
storage and use of cutback asphalts may not be permitted
unless: long-life storage is necessary; application at
ambient temperatures below 50°F is necessary; or applica-
tion as a penetrating prime coat is necessary.
The Tennessee guidelines are quite similar in most
respects, but there are some minor differences. The
current draft of the Tennessee guidelines specifies that
cutback asphalts used in paints will also be exempt. In
addition, the exemption for maintenance patching when
ambient temperatures fall below 50°F is modified to allow
for curing time.
Representatives of the Tennessee Department of Transportation,
Bureau of Highways indicated that RACT exemptions could account
for 50% of current cutback usage.
17-9
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EXHIBIT 17-3
U.S. Environmental Protection Agency
ESTIMATED HYDROCARBON EMISSIONS
FROM USE OF CUTBACK ASPHALT IN TENNESSEE
Sales of
Cutback Asphalt
(000 Tons)
Estimated
Hydrocarbon Emissions
in 1977
(000 Tons)
Estimated Non-Exempted
Hydrocarbon Emissions in 1977
(000 Tons)
Rapid
Cure
Medium
Cure
Slow
Cure
Rapid
Cure
Medium
Cure
Slow
Cure
Total
State
9.72
5.24
0.0
1.98
1.09
0.0
3.08
1.54
a Source: U.S. Department of Energy, Bureau of Mines
b 50 percent of emissions are from non-exempted cutbacks. See footnote
(a) to section 17.3.3.
-------
Given these exemptions, general experience with asphalt
emulsions in several regions of the U.S. indicates that
emulsions are adequate substitutes for cutbacks.1 Moreover,
the same equipment that is used to apply cutback asphalt
can be used with asphalt emulsions after minor modification.
The few changes necessary to replace cutback asphalt with
emulsion asphalt are as follows:
Retrain employees on the use of asphalt emulsions
Modify cutback asphalt equipment to accommodate
asphalt emulsions, including:
Providing new nozzles on the distributor
truck which applies the asphalt
Adjusting the pumps which apply the emul-
sion
Cleaning equipment prior to using emulsion
Create emulsion plant capacity to meet the in-
creased demand
Provide asphalt manufacturing facilities with
venting for steam.
It is reported that emulsions cannot be applied in the rain.
This is also true for rapid and medium cure cutbacks.
17-10
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17.4 COST AND HYDROCARBON REDUCTION BENEFIT EVALUATIONS
FOR RACT REQUIREMENTS
Costs for using asphalt emulsions in place of cutback
asphalts are presented in this section. Each cost item is
discussed, quantified, and then the total cost is calculated
for the state.
17.4.1 Costs Associated With Using Asphalt Emulsions
in Place of Cutback Asphalt
The information on the costs of using asphalt emulsions
in place of cutback asphalt was gained from interviews with
asphalt trade association members, asphalt manufacturers,
and from analysis of existing studies on asphalt.
Costs to users of cutback asphalt who must convert to
emulsions are primarily those expenditures associated with
retraining personnel and making minor equipment modifica-
tions. The existing price/gallon advantage accruing to
emulsions is approximately offset by the quantity advantage
accruing to cutbacks (in terms of required asphalt content
and comparative durability). Put differently, expenditures
on materials should remain approximately constant, but
those on capital and labor should increase as users convert
to asphalt emulsions.
The most significant cost to the user will be for re-
training personnel in the methods of asphalt emulsion ap-
plication. It is estimated that these training costs are
$300 per person including the cost of supervision for the
training session.
Modification of trucks used in applying asphalt con-
sists of replacing nozzles at a cost of $5 per nozzle.
An average truck is equipped with 30 nozzles; therefore,
the cost per truck would be $150. Other equipment costs
include adjusting pumps and cleaning equipment before as-
phalt emulsions can be applied, and these are considered
to be minimal.
Total user costs are assumed to be incurred on a one-
time basis. Minor equipment costs are generally not capi-
talized but are expensed in the accounting period in which
they are incurred. The paragraph which follows shows total
costs to the non-attainment counties for converting from
the use of cutback asphalt to asphalt emulsion.
17-11
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17.4.2 Extrapolation to the Statewide Industry
Converting from cutback asphalts to asphalt emulsions
in the state is estimated to cost $26,768. This trans-
lates into $17 per ton of hydrocarbon emissions reduced.
A summary of these costs is given in Exhibit 17-4 on the
following page.
17-12
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EXHIBIT 17-4
U.S. Environmental Protection Agency
COSTS IN TENNESSEE FOR APPLYING
RACT TO THE USE OF CUTBACK ASPHALT
Direct Cost Summary
Cutback asphalt used in the state 14,956
(tons per year)
Potential emissions reduction 1,540
from converting to use of
emulsion asphalt
(tons per year)
Retraining costs*5 $21,368
Total one-time costs 5,400
One-time costs per ton of $ 17.
emissions reduced
Annualized cost 0
per ton of emission reduced
Assumes 50% of cutback usage will be exempted, and emulsion
asphalt substituted will have no VOC emissions.
Retraining costs are calculated in two stages.
First, it is assumed that the percent of the
labor force unfamiliar with emulsion application
will be roughly equal to a proxy ratio which re-
lates sales of cutbacks to sales of cutback plus
emulsions in 1977. Since the sales of cutbacks
were 14,956 short tons and those of emulsions
179,087, the proxy ratio is about one-thirteenth.
Second, this proxy ratio is multiplied by the esti-
mated total labor force (925) and the cost per
person ($300).
Representatives of national asphalt organizations
have suggested that for every two workers there
is approximately one distributor truck. This
implies that 36 trucks will need modification
at a cost of $150 per truck.
Source: Booz, Allen & Hamilton Inc.
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17.5 ECONOMIC IMPACTS
This section discusses the economic impacts associated
with applying RACT to the use of cutback asphalt in
Tennessee. The direct economic impacts include:
User Cost—The estimated one-time cost of
$26,768 distributed statewide in Tennessee is
small compared to the $278,329,000 spent on
highway construction and maintenance during
1977.1
Price—The prices of cutback and emulsion
asphalts may be marginally affected by RACT to
the extent that demand and supply shifts for
both products are not offsetting. However, it
is not RACT but rather the increasing cost of
diluents used in cutbacks which will have the
most decisive impact on price differentials in
the future.
Demand—If current usage patterns prevail
through 1981 when RACT is scheduled for implemen-
tation, then the demand for cutbacks might fall
off by 50 percent while the demand for emulsions
rises by 4 percent.
Employment—No change in employment is predicted
from implementing RACT, although it will be
necessary to retrain approximately 72 employees
in Tennessee on the use of asphalt emulsions.
Productivity—Given appropriate retraining,
worker productivity is not expected to be
affected by handling more emulsion asphalts.
In addition to direct impacts there may also be
indirect effects. Implementing RACT may cause a strain
on current industry capacity to meet the increased demand
for emulsion asphalts. To the extent that a supply-demand
imbalance is inherent, it may be necessary for producers
to invest in new plant capacity. Presently, it is
Source: Federal Highway Administration. A small fraction of
this cost includes depreciation on equipment.
17-13
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anticipated that sufficient lead time exists for any
supply-demand imbalance to be redressed. Insufficient
data are available to quantify these potential costs in
Tennessee.
* * * * *
Exhibit 17-5 presents a summary of the findings in
this report.
17-14
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EXHIBIT 17-5
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR USE OF
CUTBACK ASPHALT IN THE STATE OF TENNESSEE
Current Situation Discussion
Use of cutback asphalt
Indication of relative importance of
industrial sector to state economy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC control
to meet RACT guidelines
Assumed method of control to meet RACT
guidelines
Affected Areas in Meeting RACT
Capital investment
Annualized cost
Price
Energy
Productivity
Employment
In 1977, use of cutback asphalt was
14,956 tons in the state.
1977 sales of cutback asphalt were
estimated to be $1.4 million.
Nationally, use of cutback asphalt
has been declining.
3080 tons annually; 1,540 of which would
be controled under the proposed regulations.
Replace with asphalt emulsions
Replace with asphalt emulsions
Discussion
$0.03 million
No change in paving costs are expected.
No change in paving costs are expected.
No savings to user3
No major impact
No major impact
It is estimated that an energy savings of 14,989 barrels of oil equivalent
could accrue to the manufacturer. The total energy associated with man-
ufacturing, processing and laying one gallon of cutback is approximately
50,200 BTUs/gallon. For emulsified asphalts, it is 2,830 BTUs/gallon.
One barrel of oil equivalent is assumed to have 6.05 million BTUs, and
one ton of cutback asphalt is assumed to have 256 gallons.
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BIBLIOGRAPHY
"Control of Volatile Organic Compounds from Use of
Cutback Asphalt," EPA-450/2-77-037, December 1977.
"Air Quality and Energy Conservation Benefits from Using
Emulsions to Replace Asphalt Cutbacks in Certain Paving
Operations," EPA-450/2-78-004, January 1978.
"Mineral Industry Surveys," U.S. Department of the
Interior, Bureau of Mines, June 27, 1977.
"Magic Carpet, The Story of Asphalt," The Asphalt
Institute, 1977.
"Proposed Amendments to Pollution Control Regulations,"
Illinois Environmental Protection Agency.
"Technical Support for RACT Cutback Asphalt," Illinois
Environmental Protection Agency.
"World Use of Asphalt Emulsion," Cyril C. Landise,
Armak Company, Chicago, Illinois, March 5, 1975.
"Atmospheric Emissions from the Asphalt Industry,"
PB-227 372, National Environmental Research Center,
December 1973.
Asphalt, Its Composition, Properties and Uses, Ralph
N. Traxler, Reinhold Publishing Company, New York,
1961.
The Asphalt Handbook, The Asphalt Institute, April 1965.
Introduction to Asphalt, The Asphalt Institute, November
1967.
Telephone interview with Mr. Charles Maday, U.S. EPA,
August 1978.
Telephone interview with Mr. Charles Owen, The Asphalt
Institute, August 1978.
Telephone interview with Mr. Terry Drane, Emulsified
Asphalt, Inc., August 1978.
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TECHNICAL REPORT DATA
(Please read Inujvcrions on the reverse before completingj
1. REPORT NO. 2.
EPA-904/9-79-036
3. RECIPIENT'S ACCESSION NO.
¦l. TITLE AND SUBTITLE
Economic Impact of Implementing RACT guide-
lines in the State of Tennessee
5. REPORT DATE
6. PERFORMING ORGANIZATION CODE
AUTHOR(S)
8. PERFORMING ORGANIZATION REPORT NO.
9. PERFORMING ORGANIZATION NAME AND ADDRESS
Booz, Allen & Hamilton Inc.
Foster D. Snell Division (Florham Park, N.J.)
& Public Management Technology Center
(Bethesda, MD)
10. PROGRAM ELEMENT NO.
11. CONTRACT/GRANT NO.
68-02-2544, Task 6
12. SPONSORING AGENCY NAME AND ADDRESS
U.S. Environmental Protection Agency
Region IV
Air Programs Branch
Atlanta, Georgia 3030 8
13. TYPE OF REPORT AND PERIOD COVERED
Final Report
14. SPONSORING AGENCY CODE
"5. SUPPLEMENTARY NOTES
EPA Project Officer: Winston Smith
6. abstra^ majQr objective of the contract effort was to determine the
direct economic impact of implementing RACT standards in Tennessee. 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 13 RACT indus-
trial categories: surface coatings (cans, coils, paper, fabrics, metal
furniture, large appliances); solvent metal cleaning; bulk gasoline
terminals; refinery systems; bulk gasoline plants; storage of petroleum
liquids in fixed roof tanks; gasoline dispensing stations—Stage I;
and use of cutback asphalt. "
The scope of this project was to determine the costs and direct
impact of control to achieve RACT guideline limitations for these 13
industry categories in Tennessee. Direct economic costs and benefits
from the implementation of RACT limitations were identified and quanti-
fied while secondary impacts (energy, employment, etc.) are addressed,
they were not a major emphasis in the study.
KEY WORDS AND DOCUMENT ANALYSIS
DESCRIPTORS
b.IDENTIFIERS/OPEN ENDED TERMS
c. COSATI Field/Group
gasoline marketing
\ir pollution
Metal coatings
Solvent substitution
Emission limits
Air pollution control
Stationary sources ¦
Tennessee
Economic impact
Hydrocarbon emissions.
Coatings
DISTRIBUTION STATEMENT
; Unlimited
19. SECURITY CLASS /This Report)
Unclassified
21. NO. OF PAGES
20. SECURITY CLASS (This page)
Unclassified
22. PRICE
^ Form 2220-1 (9-73)
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