United States Region IV EPA 904/9-79-032
Environmental Protection Air Programs Branch March 1979
Agency Atlanta, Georgia 30308
Air
SEPA
Economic Impact
of Implementing
RACT Guidelines in
the Non-Attainment
Areas for Ozone
in South Carolina
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EPA 904/9-79-0.32
FINAL REPORT
ECONOMIC IMPACT OF IMPLEMENTING
RACT GUIDELINES IN THE NONATTAINMENT AREAS
FOR OZONE IN THE STATE OF SOUTH CAROLINA
Basic Ordering Agreement Number 68-02-2544
RESEARCH AND DEVELOPMENT SERVICES FOR ASSISTANCE
TO STATES AND EPA CARRYING OUT REQUIREMENTS
OF CLEAN AIR ACT AND APPLICABLE FEDERAL
AND STATE REGULATIONS
U.S. ENVIRONMENTAL PROTECTION AGENCY
REGION IV
AIR & HAZARDOUS MATERIALS DIVISION
ATLANTA, GEORGIA 3030 8
EPA Project Officer: Winston Smith
Task Order Number 6 Under:
Prepared for:
From:
BOOZ, ALLEN & HAMILTON Inc.
March, 1579
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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 furnished to the EPA by Booz, Allen &
Hamilton Inc. in fulfillment of Task Order Number 6 of Basic
Ordering Agreement Number 68-02-2544. This report has been
reviewed by EPA Region IV and approved for publication. Approval
does not signify that the contents necessarily reflect the views
and policies of the EPA, nor does mention of trade names or
commercial products constitute endorsement or recommendation
for use.
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TABLE OF CONTENTS
TITLE
EXECUTIVE SUMMARY
INTRODUCTION AND APPROACH
ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR SURFACE COATING OF CANS (NOT PART
OF THIS STUDY)
ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING OF COILS
(NOT PART OF THIS STUDY)
ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING OF PAPER
IN THE NONATTAINMENT AREAS FOR OZONE
IN THE STATE OF SOUTH CAROLINA
ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING OF FABRICS
IN THE NONATTAINMENT AREAS FOR OZONE
IN THE STATE OF SOUTH CAROLINA
ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING OF AUTOMOBILES
(NOT PART OF THIS STUDY)
ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING OF METAL
FURNITURE (NOT PART OF THIS STUDY)
ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING FOR INSULATION
OF MAGNET WIRE (NOT PART OF THIS STUDY)
ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING OF LARGE
APPLIANCES (NOT PART OF THIS STUDY)
ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR SOLVENT METAL DEGREASING IN THE
NONATTAINMENT AREAS FOR OZONE IN
THE STATE OF SOUTH CAROLINA
ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR REFINERY VACUUM PRODUCING SYSTEMS,
WASTEWATER SEPARATORS AND PROCESS UNIT
TURNAROUNDS (NOT PART OF THIS STUDY)
iii
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TABLE OF CONTENTS
CHAPTER TITLE
13.0 THE ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR TANK TRUCK GASOLINE LOADING
TERMINALS IN THE NONATTAINMENT AREAS
FOR OZONE IN THE STATE OF SOUTH
CAROLINA
14.0 THE ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR BULK GASOLINE PLANTS IN
THE NONATTAINMENT AREAS FOR OZONE
IN THE STATE OF SOUTH CAROLINA
15.0 THE ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR STORAGE OF PETROLEUM LIQUIDS
IN FIXED-ROOF TANKS IN THE NONATTAIN-
MENT AREAS FOR OZONE IN THE STATE OF
SOUTH CAROLINA
16.0 THE ECONOMIC IMPACT OF IMPLEMENTING
RACT STAGE I FOR GASOLINE SERVICE
STATIONS IN THE NONATTAINMENT AREAS
FOR OZONE IN THE STATE OF SOUTH
CAROLINA
17.0 THE ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR USE OF CUTBACK ASPHALT
IV
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LIST OF EXHIBITS
Exhibit Following Page
1-1 LISTING OF EMISSION LIMITATIONS THAT
REPRESENT THE PRESUMPTIVE NORM TO BE
ACHIEVED THROUGH APPLICATION OF RACT.
FOR SPECIFIC INDUSTRY CATEGORIES 1-3
1-2 SUMMARY OF IMPACT OF IMPLEMENTING RACT
GUIDELINES IN EIGHT INDUSTRIAL CATE-
GORIES—SOUTH CAROLINA (FIVE COUNTY
AREA) 1-9
1-3 ESTIMATED CHANGE IN ENERGY DEMAND
RESULTING FROM IMPLEMENTATION OF
EIGHT RACT GUIDELINES IN NONATTAIN-
MENT COUNTIES OF SOUTH CAROLINA 1-11
1-4 - SUMMARY EXHIBITS OF THE EIGHT RACT
1-11 CATEGORIES 1-16
2-1 LISTING OF EMISSION LIMITATIONS THAT
REPRESENT NORM TO BE ACHIEVED THROUGH
APPLICATION OF RACT FOR SPECIFIC
INDUSTRY CATEGORIES 2-4
5-1 DATA QUALITY—SURFACE COATING OF PAPER 5-5
5-2 1977 INDUSTRY STATISTICS—SURFACE COATING
OF PAPER SIC GROUPS IN SOUTH CAROLINA 5-6
5-3 HISTORICAL TRENDS IN VALUE OF SHIPMENTS
OF U.S. PLANTS ENGAGED IN PAPER COATING 5-7
5-4 EMISSION DATA FROM TYPICAL PAPER COATING
PLANTS 5-8
5-5 COMPANY ESTIMATES OF PAPER COATING
EMISSIONS AS REPORTED TO BOOZ, ALLEN
& HAMILTON 5-10
5-6 ACHIEVABLE SOLVENT REDUCTIONS USING LOW
SOLVENT COATINGS IN PAPER COATING INDUSTRY 5-11
5-7 SUMMARY OF ASSUMPTIONS USED IN COST
ESTIMATE 5-16
5-8 SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR PAPER COATERS IN THE
STATE OF SOUTH CAROLINA 5-21
v
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1
2
3
4
5
6
7
8
9
-1A
-1
-2
-3
-4
-5
-6
-7
Exhibit Following Page
DATA QUALITY—SURFACE COATING OF
FABRICS 6-5
INDUSTRY STATISTICS FOR PLANTS IN SIC
CATEGORIES WHERE FABRIC COATING MAY
BE USED IN SOUTH CAROLINA 6-6
FIRMS EXPECTED TO BE AFFECTED BY THE
FABRIC COATING RACT REGULATIONS IN
THE NONATTAINMENT COUNTIES IN SOUTH
CAROLINA 6-6
U.S. ANNUAL VALUE OF SHIPMENTS OF COATED
FABRICS 6-7
U.S. ANNUAL SHIPMENTS OF BACKING MATERIALS
FOR COATED FABRICS 6-7
REPORTED AND POTENTIAL EMISSIONS 6-8
INCINERATION COSTS FOR A TYPICAL FABRIC
COATING LINE 6-13
SUMMARY OF ASSUMPTIONS USED IN COST
ESTIMATE 6-14
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR FABRIC COATERS IN THE
STATE OF SOUTH CAROLINA 6-18
DATA QUALITY 11-13
ESTIMATED NUMBER OF VAPOR DEGREASERS IN
SOUTH CAROLINA 11-14
ESTIMATED NUMBER OF COLD CLEANERS IN
SOUTH CAROLINA 11-14
ESTIMATE OF AFFECTED SOLVENT METAL
CLEANERS IN SOUTH CAROLINA 11-14
CONTROL SYSTEMS FOR COLD CLEANING 11-16
EPA PROPOSED CONTROL SYSTEMS FOR OPEN
TOP VAPOR DEGREASERS 11-16
EPA PROPOSED CONTROL SYSTEMS FOR CON-
VEYORIZED DEGREASERS 11-16
AVERAGE UNIT EMISSION RATES AND EXPECTED
EMISSION REDUCTIONS 11-18
vi
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8
9
10
11
12
13
14
¦15
¦16
17
•1
•2
¦3
¦4
Exhibit
Following Page
ESTIMATED CURRENT AND REDUCED EMISSIONS
FROM SOLVENT METAL CLEANING IN SOUTH
CAROLINA 11-18
CONTROL COSTS FOR COLD CLEANER WITH
5.25 FT.2 AREA 11-19
CONTROL COSTS FOR AVERAGE-SIZED OPEN
TOP VAPOR AND CONVEYORIZED CLEANERS 11-19
ESTIMATED CONTROL COSTS FOR COLD
CLEANERS FOR THE STATE OF SOUTH
CAROLINA 11-19
ESTIMATED CONTROL COSTS FOR OPEN
TOP VAPOR DEGREASERS FOR THE STATE
OF SOUTH CAROLINA 11-19
ESTIMATED CONTROL COSTS OF CONVEYORIZED
DEGREASERS FOR THE STATE OF SOUTH
CAROLINA 11-19
ESTIMATED NUMBER OF COLD CLEANERS
NEEDING CONTROLS IN THE STATE OF
SOUTH CAROLINA 11-19
ESTIMATED'NUMBER OF OPEN TOP VAPOR
DEGREASERS NEEDING CONTROL IN THE STATE
OF SOUTH CAROLINA 11-19
ESTIMATED NUMBER OF CONVEYORIZED DEGREASERS
NEEDING CONTROLS IN THE STATE OF SOUTH
CAROLINA 11-19
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR SOLVENT METAL
DEGREASING IN THE STATE OF SOUTH
CAROLINA 11-22
DATA QUALITY 13-5
INDUSTRY STATISTICS FOR TANK TRUCK
GASOLINE LOADING TERMINALS IN SOUTH
CAROLINA 13-6
GASOLINE DISTRIBUTION NETWORK 13-6
TANK TRUCK GASOLINE LOADING TERMINAL
THROUGHPUT IN THE FOUR AFFECTED NON-
ATTAINMENT COUNTIES IN SOUTH CAROLINA 13-7
vii
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13-5
13-6
13-7
13-8
13-9
13-10
14-1
14-2
14-3
14-4
14-5
14-6
14-7
14-8
14-9
Exhibit Following Page
VOC EMISSIONS FROM AFFECTED TANK TRUCK
TERMINALS 13-8
VOC EMISSION CONTROL TECHNOLOGY FOR TANK
TRUCK GASOLINE LOADING TERMINALS 13-9
FACTORY COSTS OF ALTERNATIVE VAPOR CONTROL
SYSTEMS 13-12
DESCRIPTION AND COST OF MODEL TANK TRUCK
GASOLINE LOADING TERMINALS EQUIPPED WITH
VAPOR CONTROL SYSTEMS 13-12
COSTS OF VAPOR CONTROL SYSTEM FOR THE
AFFECTED TANK TRUCK GASOLINE LOADING
TERMINALS IN THE FOUR NONATTAINMENT
COUNTIES IN SOUTH CAROLINA 13-13
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR TANK TRUCK
GASOLINE LOADING TERMINALS IN SOUTH
CAROLINA 13-16
DATA QUALITY 14-5
INDUSTRY STATISTICS FOR AFFECTED BULK
GASOLINE PLANTS IN THE FOUR NONATTAINMENT
COUNTIES IN SOUTH CAROLINA 14-6
GASOLINE DISTRIBUTORS NETWORK 14-6
DISTRIBUTION OF BULK GASOLINE PLANTS BY
AMOUNT OF THROUGHPUT FOR THE FAIR
NONATTAINMENT COUNTIES IN SOUTH CAROLINA 14-7
VOC EMISSION FROM AFFECTED BULK GASOLINE
PLANTS IN THE FOUR URBAN NONATTAINMENT
COUNTIES IN SOUTH CAROLINA 14-8
VOC EMISSION CONTROL TECHNOLOGY FOR
BULK GASOLINE PLANTS 14-9
ALTERNATIVE CONTROL METHOD FOR VAPOR
CONTROL AT BULK GASOLINE PLANTS 14-9
COSTS OF ALTERNATIVE VAPOR CONTROL
SYSTEMS 14-12
DESCRIPTION AND COST OF A MODEL BULK
PLANT EQUIPPED WITH VAPOR CONTROL 14-13
viii
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Exhibit
Following Page
14-10 INDUSTRY COSTS OF VAPOR CONTROL SYSTEMS
FOR AFFECTED BULK GASOLINE PLANTS IN
THE FOUR URBAN NONATTAINMENT COUNTIES
IN SOUTH CAROLINA 14-13
14-11 SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR AFFECTED BULK
GASOLINE PLANTS IN THE STATE OF SOUTH
CAROLINA 14-19
15-1 DATA QUALITY 15-4
15-2 INSTALLED COST OF SINGLE SEAL FLOATING
ROOF TANKS 15-7
15-3 VOC EMISSIONS CONTROL COSTS FOR STORAGE
OF PETROLEUM LIQUIDS IN FIXED-ROOF TANKS
IN THE FOUR NONATTAINMENT COUNTIES IN
SOUTH CAROLINA 15-7
15-4 SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR STORAGE OF
PETROLEUM LIQUID IN THE STATE OF SOUTH
CAROLINA 15-9
16-1 DATA QUALITY 16-5
16-2 INDUSTRY STATISTICS FOR GASOLINE SERVICE
STATIONS IN THE FOUR URBAN NONATTAINMENT
COUNTIES IN SOUTH CAROLINA 16-6
16-3 GASOLINE DISTRIBUTION NETWORK 16-7
16-4 U.S. RETAIL GASOLINE DISPENSING
FACILITIES 16-7
16-5 U.S. PRIVATE GASOLINE DISPENSING
FACILITIES 16-7
16-6 VOC EMISSIONS FROM GASOLINE DISPENSING
FACILITIES IN THE FOUR URBAN NONATTAIN-
MENT COUNTIES IN SOUTH CAROLINA 16-10
16-7 VOC EMISSION CONTROL TECHNOLOGY FOR
GASOLINE DISPENSING FACILITIES 16-10
16-8 STAGE I VAPOR CONTROL COSTS FOR A
TYPICAL GASOLINE DISPENSING FACILITY 16-12
16-9 STAGE I VAPOR CONTROL COSTS FOR A
TYPICAL GASOLINE DISPENSING TRUCK 16-13
IX
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Exhibit
Following Page
16-10
16-11
17-1
17-2
17-3
17-4
17-5
COSTS FOR STAGE I VAPOR CONTROL GASOLINE
DISPENSING FACILITIES IN THE FOUR URBAN
NONATTAINMENT COUNTIES IN SOUTH CAROLINA 16-14
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR GASOLINE DIS-
PENSING FACILITIES IN THE STATE OF SOUTH
CAROLINA 16-18
DATA QUALITY 17-3
HISTORICAL NATIONAL SALES OF ASPHALT
CEMENT, CUTBACK ASPHALT AND ASPHALT
EMULSIONS 17-5
ESTIMATED HYDROCARBON EMISSIONS FROM
USE OF CUTBACK ASPHALT IN SOUTH
CAROLINA 17-8
COSTS IN SOUTH CAROLINA FOR APPLYING
RACT TO THE USE OF CUTBACK ASPHALT 17-11
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR USE OF CUTBACK
ASPHALT IN THE STATE OF SOUTH CAROLINA
(NONATTAINMENT COUNTIES) 17-13
x
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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 the study to determine the economic
impact of implementing Reasonably Available Control Tech-
nology (RACT) guidelines for volatile organic compounds for
eight industrial categories in the nonattainment areas for
ozone of South Carolina. 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
Nonattainment Area Aggregate Economic Impact
for the eight 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 Qbj ectives
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 economic studies plus other 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 South Carolina was to determine
the costs and direct impacts of control to achieve RACT guide-
line limitations in eight industrial categories. The impact was
addressed for each industry category in the nonattainment
counties for ozone so that the respective studies are applica-
ble to individual regulations. Direct economic costs and bene-
fits from the implementation 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 an area (nonattainment
counties for ozone) basis for the RACT categories studied.
1-2
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In the five counties designated as nonattainment for
ozone in South Carolina, the economic impact was analyzed
for the implementation of RACT guidelines for the following
eight industry categories:
Surface coating of paper
Surface coating of fabrics
Solvent metal cleaning
Bulk gasoline terminals
Bulk gasoline plants
Storage of petroleum liquids in fixed roof tanks
Service stations—Stage I
Use of cutback asphalt.
The major study guidelines in the determination of the
economic impact of the RACT guidelines are discussed below.
The emission limitations for each industrial
category was studied at the emission level established
by the RACT guidelines. These are presented in
Exhibit 1-1, on the following page.
Emissions sources included were the use of cutback
asphalt and existing stationary point sources in
the applicable industrial categories in the nonattain-
ment areas for ozone with the following guidelines:
Surface coating of paper and fabrics with
potential VOC emissions of:
10 tons or more in the four urban
nonattainment counties (Richland,
Lexington, Berkeley and Charleston)
100 tons or more in York county.
Bulk gasoline plants were studied for the
four urban counties only, since emissions from
bulk plants do not exceed 100 tons per year.
Bulk terminals were studied for the four
urban counties only, since no bulk terminals
had been identified in York county.
Service stations were studied for the four
urban counties only, because their emissions
do not exceed 100 tons per year. Service
stations with less than 2,000 gallon tank
capacity will be exempt from the regulation.
1-3
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Exhibit 1-1(1)
u.w. invironmenta; riOLSCLion n^ency
LISTING OF EMISSION LIMITATIONS THAT
REPRESENT THE FF~SL"Mr 7IVE NORM TO 3E
ACHIEVED THROUGH APPLICATION OF RACT
FOR SPECIFIC INDUSTRY CATEGORIES
,atecorv
RACT Guideline Emission Limitations
Surface Coating Categories Based on
Low Organic Solvents (lbs. solvent
per gallon of coating, minus water)
Surface coacing of:
Paper
Fabrics and vinyl coating
Fabric
Vinyl
Solvent metal cleaning
Cold cleaning
Conveyorized degreaser
Open top degreaser
2.9
2.9
3.8
Provide cleaners with: cover!
facility to drain clean parts;
additional freeboard; chiller or
carbon absorber. Follow suggested
procedures to minimize carryouts.
Provide cleaners with: refrigerated
chillers; or carbon adsorption system;
drying tunnel or rotating basket;
safety switches; covers. Follow
suggested procedures to minimize
carryout.
Provide cleaner with: safety
switches; powered cover; chiller;
carbon absorber. Follow suggested
orocedures to minimize carrvout.
Bulk gasoline terminals
Julk Gasoline Plants
Equipment such as vapor control
system to prevent mass emissions of
VOC from control equipment to ex-
ceed 80 millicrams osr liter
(4.7 crams per gallon)
loaded.
:asoline
Provide submerged filling and vapor bal-
ancing or equivalent control to reduce
VOC emissions. Follow suggested procedures
to minimize vauor losses.
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U.S.
Exhibit 1-](2 ^
Environmental Protection Agency
.3 tecorv
RACT Guideline Emission limitations'
:oi"3cs of petroleum liquids
in fixed roof tanks
Provide single seal and mtornal
floating roof to all fixed roof
storage vessels with capacities
greater than 150,000 liters (39,000
gal.) containing volatile petroleum
liquids for which true vapor pres-
sure is greater than 10.5 kilo
oascals (1.51 csia''
Service stations (Stage I)
Provide submerged fill and vapor
balance for any stationary storage
tank located at a gasoline dis-
pensing facility.
Use of cutback asphalt The manufacture, mixing, storage,
use or application may be approved
where: long-life stockpile storage
is necessary; the use or application
at an ambient temperature less than
10°C (50°F) is necessary; or it' is
to be used solely as a penetrating
prime coat
Annotated description of RACT guidelines.
Source: Regulatory Guidance for Control of Volatile Organic Corr.nound
Emissions from 15 Catecories of Stationary Sources, U.S.
Environmental Protection Agency, EPA-90512-78-001, April 1978.
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Solvent metal cleaning was studied for
the four urban counties only, assuming
that no solvent metal cleaners with
over 100 tons VOC emissions exist in
York County.
The use of cutback asphalt was studied
for the 5 nonattainment counties.
The following five volatile organic compounds
were exempted:
Methane
Ethane
Trichlorotrifluorethane (Freon 113)
1,1,1-trichloroethane (methyl chloroform).
The timing requirement for implementation of con-
trols to meet RACT emission limitations was
May 1, 1981.
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 estimating pro-
cedure applied was built up from the following
factors:
Depreciation—assuming straight-line
over a ten-year life
Interest—10 percent
Taxes and insurance—4 percent
Maintenance—5 percent.
1 The exempt status of methyl chloroform under these
guidelines may be subject to change.
1 -4
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The capital-related annual costs do not account
for investment costs in terms of return or in-
vestment parameters (i.e., the "opportunity cost"
of money is not included).
Annual operating costs of compliance with the
RACT guidelines were estimated for each of the
control alternatives studied. The annual oper-
ating costs included were:
Direct labor
Raw material costs (or savings)
Energy
Product recovery cost (or savings)
Maintenance.
Other types of costs, not included in this
analysis, involve compliance costs, such as:
Demonstration of control equipment
efficiency
Supervisory or management time
Cost of labor or downtime during
installation and startup.
The annualized cost is the total of direct
operating costs (including product or raw
material recovery) and the capital related
annual costs.
The costs of meeting the emission limitations
presented within this report represent appli-
cation of control techniques on a process-by-^
process basis. This analysis does not account
for the "Alternative Emission Reduction (Bubble)
Approach" recently presented by the EPA to the
states for consideration in the development of
State Implementation Plans.
Under the "bubble" concept, facilities may
reduce the economic burden by applying more
cost-effective mixes of control techniques
rather than by applying the process-by-process
emission control technologies studied, as long
as total environmental benefits are not reduced.
To the extent that affected facilities in South
Carolina with multiple process-related emission
sources can apply these alternative abatement
strategies and achieve the same emission reduction
for less cost, the economic impact presented in
this report is overstated.
1-5
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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 (fabrics
and paper)—The potentially affected facilities
and emissions were obtained primarily from the
South Carolina Department of Health and Environ-
mental Control and interviews. Therefore, the
following general methodology was applied:
A list of potentially affected facilities
was compiled by Booz, Allen from secondary
reference sources.
Data from the South Carolina emission
inventory were categorized and compiled
for each RACT industrial category by
the South Carolina Department of Health
and Environmental Control.
Firms not listed in the emission inventory
were identified. All of these facilities
were then interviewed by the South Carolina
Department of Health and Environmental
Control when there was doubt concerning
their inclusion.
Emissions, emission characteristics,
control options and control costs were
studied for relevant firms.
Interviews were conducted by Booz, Allen
to determine emissions (when not availa-
ble) , 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.
1-6
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Nonsurface coating RACT industrial categories (bulk
gasoline plants, bulk gasoline terminals, cutback
asphalt, 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 South Carolina Department of Health
and Environmental Control 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 the determination of the economic impact for each
industrial category studied, the estimated compliance cost
is subject to variations due to inherent variations in
procedures for estimating:
Engineering costs
The number of sources affected.
Engineering cost estimates, when performed for an
individual modification with specific equipment sized at the
desired capacity, are typically subject to variations of 25
percent. When engineering cost estimates are performed on
technologies not commercially proven for a specific facility,
the variations are much greater, many times over 100 percent.
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Many of the RACT categories studied (such as solvent metal
cleaning) represent an exhaustive list of potentially affected
facilities that have not been previously identified or categorized.
Therefore, the actual number of facilities affected by a given
RACT industrial category had to be estimated from available
data sources.
If a study with unlimited resources were performed, to
estimate the specific cost to each individual facility affected
within the state, the study would be subject to a 25 percent to
50 percent variation because of the inherent variability of
engineering estimates and the uncertainty involved in the
selection and demonstrated capabilities of the control alter-
natives. Furthermore, a study of this type would take years
to perform.
Therefore, to put a perspective on the estimates presented
in this report, 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:
"Hard data"—study inputs with variation of
not more than + 25 percent.
"Extrapolated data"—study inputs with
variation of + 25 to + 75 percent.
"Rough data"—study inputs with variations
of + 50 to + 150 percent.
Each of these data quality estimates is presented in the
individual chapters. The overall ranking of the study inputs
for each RACT industrial category was generally in the extra-
polated data quality range.
1-8
-------
1.2 NON-ATTAINMENT AREA AGGREGATE ECONOMIC IMPACT
FOR THE EIGHT RACT GUIDELINES
-------
1.2 STATEWIDE AGGREGATE ECONOMIC IMPACT
FOR THE EIGHT RACT GUIDELINES
The implementation of RACT emission limitations for eight
industrial categories in the five counties designated non-
attainment for ozone in South Carolina involves an estimated
$11.2 million capital cost and $2.1 million annualized cost
per year. The net VOC emission reduction is estimated to be
7,146 tons annually from a 1977 baseline of 10,858 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 eight industrial categories.
Approximately 1,500 facilities are potentially
affected by the eight RACT guidelines in the
nonattainment counties of South Carolina.
Ninety-four percent of the potentially
affected facilities are represented by
the solvent metal cleaning (700 facili-
ties) and service station (700 facili-
ties) industrial categories.
Less than 1 percent (5 facilities) of
the potentially affected facilities
are represented by the two surface
coating industrial categories (paper
and fabrics).
In 1977, the estimated annual VOC emissions (in-
cluding those already controlled) for the eight
RACT industrial categories totalled approximately
10,858 tons.
Two surface coating categories repre-
sented 42 percent of the total VOC
emissions.
Four gas marketing categories (tank truck
loading terminals, bulk gas plants, fixed
roof tanks and service stations) repre-
sented 4 0 percent of the total VOC
emissions.
Solvent metal cleaning represented 12
percent of the total VOC emissions
(from the eight RACT categories studied)
Use of cutback asphalt represented 6
percent of the total VOC emissions.
1-9
-------
EXHIBIT 1-2
U.S. Envi ronmenta 1 Protection Agency
SUMMARY OF IMPACT OF IMPLEMENTING RACT
GUIDELINES IN EIGHT INDUSTRIAL CATEGORIES -- SOUTH CAROLINA
(FIVE county area)
Emissions
Cost of RACT Control
Cost Indicators
Industry
Category
Surface coating
of paper
Surface coating
of fabrics
Solvent metal
cleaning
Tank truck gas-
oline loading
terminals
Estimated VOC
Number of Emissions
Facilities After
Potentially 1977 VOC Implementing
Affected Emissions RACT
(tons/yr.) (tons/yr.)
700
4,240
260
1, 320
072
Hulk gasoline 40 676
plants
Storage of petro- 44 1,425
lenm liquids in
fixed roof tanks
Service Stations 700 1,400
(Stage 1)
Cutback Asphalt — 665
TOTAL 1,494 10,050
1,520
50
900
87
178
142
210
545
3,712
Net VOC
Emission
Reductions
(tons/yr.)
2, 720
210
340
705
490
1,283
1,190
120
7.146
Capltal
Cost3
($ million)
6.0
0.9
0.23
1.4
0. 55
1 . 02
1.1
0.02
11.21
Annua 1Izeri
Cost as
rercent of
Annualized Value of
Cost (credit) Shipments^
(percent)
($ mill ion)
1.2
0. 25
0.03
0.10
0.15
0. 12
0.26
2.11
3.0
3.5
<0.01
0.09
0.7
<.1
Annuali zod
Cost Per
Unit
Shipment.
Cost
Ef fo«:ti vene3fi
Annual 1 zed
Cost (credi t)
Per Ton of VOC
Reduction
(cost per unit) ($ per l:on«/yr. )
450
1,150
NA H7
$ 0.001/gal.
0.00.)/gal.
$0.OOI/ga1.
$0.001/ga1.
<1H
297
92
222
Note: Figures presented in this exhibit are rounded and approximated for comparison purposes.
a. includes on time costs
b. Value of meitts represents the total value in the specific industry category for the industry segment being studied.
Source: llooz, Allen & Hamilton tin*.
-------
The net emission reduction achievable by implementing
the eight RACT guidelines is estimated to be
approximately 7,146 tons annually. The ap-
proximate percent of the total VOC emissions
reduced by implementing RACT by industrial cate-
gory group is:
Gas marketing categories—52 percent of VOC
emission reduction
Surface coating categories—41 percent of
VOC emission reduction
Solvent metal cleaning category—5 percent
of VOC emission reduction
Use of cutback asphalt—2 percent of VOC
emission reduction.
The capital cost for the eight industrial cate-
gories to achieve the RACT guidelines is estimated
to be $11.21 million. The four industrial cate-
gories dealing with petroleum marketing (bulk
gasoline plants, bulk gasoline terminals, fixed
roof tanks and service stations) account for approxi-
mately $4.1 million (or 36 percent of the total)
of the estimated capital cost.
The annualized cost of the eight RACT industrial
categories to achieve the RACT guidelines is
estimated to be $2.1 million. In terms of cost
indicators, the annualized compliance cost per
value of shipments will have the largest effect
on the following industrial categories:
Paper coating—The annualized costs rep-
resent approximately 2.1 to 3.9 percent
of the 1977 affected industry's value
of shipments.
Fabric coating—The annualized compliance
costs represent approximately 3.5 percent
of the 1977 statewide value of shipments.
Bulk gasoline plants—The annualized
compliance costs represent approximately
0.7 percent of the 1977 statewide value
of shipments.
1-10
-------
Technology developments and delivery of equipment
could present problems in achieving the 1982
timing requirements in some of the RACT guidelines.
Low solvent coating technology requires
some further development for cost- or
energy-effective implementation of the
RACT guidelines in the following indus-
trial categories:
Surface coating of papers
Surface coating of fabrics.
Equipment delivery and installation of control
equipment were identified as potential prob-
lems on a nationwide basis in the following
industrial categories:
Surface coating of paper and fabrics
Solvent metal degreasing.
The implementation of the RACT guidelines is expected
to create further concentration for some industrial
sectors requiring major capital and annualized cost
increases for compliance. RACT requirements may
have the effect of being another contributing factor
to the industry trends of high throughput facilities
in the following RACT industrial categories:
Bulk gasoline plants
Service stations.
The annualized cost of compliance for the four
gasoline marketing categories is estimated to be
approximately $0.63 million. Assuming a "direct-
cost pass-through" for the affected facilities
(the four urban nonattainment county areas) the
annualized cost would represent a price increase
of 0.18 cents per gallon. This cost analysis
assumes that vapors collected at the service
station are recovered eventually at bulk terminals
and refineries. To the extent that some service
stations having controls may purchase gasoline
from bulk gasoline plants (outside the four-county
nonattainment area) without vapor collection
equipment, the product recovered may be overstated.
The implementation of the RACT guidelines for the
eight industrial categories is estimated to repre-
sent a net energy savings of 15,730 equivalent
barrels of oil annually as shown in Exhibit 1-3,
on the following page. Assuming a value of oil
at $13 per barrel, this is an equivalent energy
savings of $204,000 annually.
1-11
-------
EXHIBIT 1-3
U.S. Environmental Protection Agency
ESTIMATED CHANGE IN ENERGY DEMAND RESULTING
FROM IMPLEMENTATION OF EIGHT RACT GUIDELINES IN NONATTAINMENT
COUNTIES OF SOUTH CAROLINA
Industry Category
Surface coating of paper
Surface coating of fabrics
Solvent metal cleaning
Tank truck gasoline loading
terminals
Bulk gasoline plants
Storage of petroleum
liquids in fixed
roof tanks
Service stations (Stage I)
Use of cutback asphalt
TOTAL
Energy Demand Change
Increased (Decrease)
(Equivalent barrels of oil)
8,000
1,070
Negligible
(5,360)
(3,400)
(8,000)
(8,040)
Negligible
(15,730)
Energy Demand Change
Cost/(Savings)a
($ million)
0.104
0.014
Negligible
(0.070)
(0.044)
(0.104)
(0.104)
Negligible
(0.204)
a. Based on the assumption that the cost of oil is $13 per barrel.
Source Booz, Allen & Hamilton, Inc.
-------
RACT compliance requirements for the two
surface coating industrial categories
(paper and fabrics) represent a net energy
demand of approximately 9,07 0 equivalent
barrels of oil annually.
RACT compliance requirements for the four
industrial categories dealing with petroleum
marketing (service stations, bulk gasoline
terminals, bulk gasoline plants and fixed
roof tanks) represent a net energy savings
of approximately 24,800 barrels of oil
annually. However, the feasibility of
control efficiency has not been totally
demonstrated and these estimates are likely
to overstate the achievable energy savings
for bulk gasoline plants and service stations.
1-12
-------
ECONOMIC IMPLICATIONS OF EACH FACT GUIDELINE
-------
1.3 ECONOMIC IMPLICATIONS OF EACH RACT GUIDELINE
This section presents a summary of the economic impact
for each of the eight RACT industrial categories studied.
Following this section is a series of summary exhibits which
highlight the study findings for each industrial category.
1.3.1 Surface Coating of Paper
This study covered three plants identified from the RACT
requirements for paper coaters. Excluded from this study
are facilities engaged in publishing, who may coat paper as
a segment of the processing line. The study assumes that
these facilities would fall under other RACT guidelines
currently being developed, such as Graphic Arts. Further
definition of the paper coating category should be established
prior to enforcement.
The retrofit situations and installation costs for add-
on controls are highly variable. Based on these variations,
the estimated capital cost to the industry is between $5.1
million and $6.8 million, with an annualized cost of $1.0
million to $1.3 million (approximately 3 percent of the
affected firm's value of shipments).
Assuming 35 percent heat recovery, the annual energy
requirements are expected to increase by approximately
8,000 equivalent barrels of oil per year. Energy consumption
may decrease if further efficient recovery of incineration 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.
9
1.3.2 Surface Coating of Fabrics
There are two firms in the nonattainment areas of South
Carolina identified as coaters of fabric and affected by the
proposed RACT guidelines. These facilities will be required
to invest an estimated $0.9 million in capital and approximately
$0.25 million (approximately 3.5 percent of the affected firm's
value of shipments) in annualized cost to meet RACT limitations.
No significant productivity, employment or market struc-
ture dislocations should be associated with the implementation
of the RACT guideline.
1-13
-------
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.
Assuming a 25 percent heat recovery, about 1,070
barrels of additional fuel oil per year would be required to
operate the control equipment.
1.3.3 Solvent Metal Cleaning
This category includes equipment to clean the surface
for removing oil, dirt, grease and other foreign material by
immersing the article in a vaporized or liquid organic solvent.
The cleaning is done in one of three devices: a cold cleaner,
an open top vapor degreaser, or a conveyorized degreaser. This
type of cleaning is done by many firms in many different types
of industries.
Implementation of the proposed RACT guidelines for the
four county urban nonattainment area in South Carolina will affect
an estimated 700 cleaning operations. The regulation is expected
to have a negligible economic effect on industry because of the
relatively minor changes required. For South Carolina, the 700
potentially affected cleaners represent a capital cost of $230,000
and an annualized cost of $30,000 (<0.01 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 19 8 2
timeframe.
No major productivity, employment and market structure
dislocations are expected to result from RACT implementation.
1.3.4 Tank Truck Gasoline Loading Terminals
There are five facilities identified in the nonattainment
areas of the state of South Carolina as tank truck gasoline
loading terminals and affected by the limitation requirements.
Emission control of these facilities is expected to require a
capital investment of $1.4 million.- Product recovery of gaso-
line 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 $0.1 million.
No significant productivity, employment or market struc-
ture dislocations should be associated with implementing the
RACT guidelines.
1-14
-------
1.3.5 Bulk Gasoline Plants
Nationwide, 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
South Carolina.
To meet the RACT requirements, 40 bulk gas plants in the
nonattainment areas must be equipped with vapor balance and
submerged fill systems. This recommended control system is
not cost-effective for the bulk plant operator as most of the
economic credit (for recovered vapors) would be accrued to a
bulk terminal or refinery.
The estimated capital cost and annualized cost to meet
compliance requirements for the 40 facilities represent $0.55
million and $0.15 million (approximately 0.7 percent of affected
industry's value of shipments), respectively. For these facili-
ties, the price of gasoline (assuming a "direct cost pass-through")
would be increased $0,003 per gallon. Because of the competitive-
ness and low profit structure in the industry, further cost
increases could force some marginal operations out of the busi-
ness, thus further concentrating the market structure. In urban
areas, the bulk gasoline plant markets have been declining because
of competition from retailers and tank truck terminals, and should
continue to decline regardless of the RACT guidelines.
1.3.6 Storage of Petroleum Liquids in Fixed Roof Tanks
There are an estimated 44 fixed roof tanks in the nonattain-
ment areas of South Carolina which would have to be equipped with
a internal floating roof to comply with the proposed RACT require-
ments. These VOC emissions (19 77) for these tanks are estimated
to be over 1,425 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
$1.0 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 structure
change should be associated with the implementation of the RACT
guideline.
Implementation of the RACT guideline is estimated to
represent a net energy savings of 8,000 equivalent barrels
of oil annually (assuming 90 percent control efficiency).
1-15
-------
1.3.7 Service Stations
There are approximately 700 gasoline dispensing facilities
which are located in the four county urban nonattainment areas
of South Carolina and which are expected to be affected by the
Stage I RACT regulations. The implementation of submerged fill
and vapor balancing at these stations is estimated to be $1.1
million in capital. The annualized cost is $0.26 million which
represents an average cost increase of approximately $0,001
per gallon at the affected facilities; however, larger stations
will experience a much smaller unit cost increase. The service
stations could experience loss of business while vapor control
systems are being installed.
Implementation of the RACT guidelines may accelerate the
trend to high throughput stations because of the increasing
overhead costs. However, the RACT guidelines should not cause
major productivity and employment dislocations to the industry
as a whole.
It is estimated that implementing RACT guidelines for
service stations in the urban nonattainment counties of South
Carolina will result in a net energy savings equivalent to
8,000 barrels of oil per year, assuming 95 percent recovery of
gasoline. This assumed control efficiency has not been fully
demonstrated. Only a small percent of the economic benefit
from the recovered gasoline vapors will directly accrue to the
service stations.
1.3.8 Use of Cutback Asphalt
South Carolina has already converted most of the paving
applications to asphalt emulsions. The majority of cutback
asphalt remaining in use are primarily for penetrating prime
coat applications, which are exempt from the proposed limita-
tions. Replacement of the solvent-based asphalt with asphalt
emulsion for patchwork applications will cause no dislocation
in employment or worker productivity. Capital and training
cost investment is estimated at $20,000. No change in paving
costs are expected from the implementation of the RACT guide-
line.
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 eight industrial categories
studied is presented in Exhibit 1-4 through 1-11, 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 PAPER COATERS IN
THE STATE OF SOUTH CAROLINA
(NONATTAINMENT COUNTIES)
Current Situation
Number of potentially affected facilities
Discussion
Three plants in the state's non-attainment
areas 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.
Indication of relative importance of the
industrial sector to the state economy
Current industry technology trends
1977 VOC emissions (actual)
The 1977 value of shipments of these three
plants is estimated to be about $34 to
$45 million. They are estimated to employ
572 people.
Gravure coating replacing older systems.
Approximately 4,240 tons per year were
identified from three plants affected. Of
these 3,360 tons per year are applicable
under RACT.
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
Though low solvent use is increasing,
progress is slow. Add-on control systems
will probably be used.
Thermal incineration with primary heat
recovery and carbon adsorption.
Discussion
Estimated to be $5.1 million to $6.8 million
depending on retrofit situations. This is
likely to be more than 100 percent of normal
expenditures for the affected paper coaters.
Annualized cost $1.0 million to $1.3 million annually.
This represents 2.1 to 3.9 percent of the
value of shipments for the three firms
directly affected.
Price
Assuming a "direct cost pass-through"— 2.1
to 3.9 percent at the three affected firms.
-------
EXHIBIT 1-4 (2)
U.S. Environmental Protection Agency
Affected Areas in Meeting RACT
Energy
Productivity
Employment
Market structure
RACT timing requirements (1981)
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 8,000 equivalent barrels
of oil.
No major impact.
No major impact.
No major impact.
RACT guideline needs clear definition for
enforcement.
Equipment deliverables and installation of
incineration systems prior to 1981 are
expected to present problems. Development
of low solvent systems is likely to extend
beyond 1981.
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 1,520 tons/year (36 percent
of 1977 VOC emission level from three
affected plants).
$396 - $514 annualized cost/annual ton
of VOC reduction.
Source: Booz, Allen & Hamilton Inc.
-------
EXHIBIT 1-^ (1.
U.S. Environmental Protection Agenc;.
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS Of
IMPLEMENTING RACT FOR FABRIC COATERS IN
THE STATE OF SOUTH CAROLIN-
(NONATTAINMENT COUNTIES;
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
Annualized cost
Price
Energy
Productivity
Employment
Market structure
Discussion
Two plants in the state's non-attainment
areas are expected to be affected by these
regulations.
The 1977 value of shipments of these two
plants is estimated to be about $7.1 million.
They are estimated to employ 100 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
260 tons/year.
Direct fired incineration'
Direct fired incineration with primary
heat recovery.
Discussion
Estimated to be $0.8 million to $1.1 million
depending on retrofit situations.
$210,000 to S280,000 annually.
Assuming a "direct cost pass-through"--
3 to U percent.
Assuming 35 percent heat recovery, annual
energy requirements are expected to in-
crease by approximately 1,070 equivalent
barrels of oil.
No major impact.
No major impact.
No major impact.
-------
EXHIBIT 1-5 (2)
U.S. Environmental Protection Agencv
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR FABRIC COATERS IN
THE STATE OF SOUTH CAROLINA
(NONATTAINMENT COUNTIES)
Affected Areas in Meeting RACT
RACT timing requirements (1981)
Problem areas
VOC emissions after RACT control
Cost effectiveness of RACT control
Discussion
RACT guideline needs clear definition
prior to enforcement.
Nationwide, equipment deliverables and
installation of incineration systems
prior to 1981 are expected to present
problems. Development of low solvent
systems is likely to extend beyond 1981.
Retrofit situations and installation costs
are highly variable.
Type and cost of control depend on particu-
lar solvent systems used and reduction in
air flow.
Approximately 50 tons/year (19 percent of
1977 VOC emissions level from affected
plants.
$1,004 to $1,327 annualized cost/annual
ton of VOC reduction.
Source: Booz, Allen & Hamilton Inc.
-------
Current Situation
Number of potentially affected
facilities
Indication of relative importance
of industrial section to state
economy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of VOC control
meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment
Annualized cost
Price
Energy
Productivity
Employment
Market structure
RACT timing requirements (1981)
Problem areas
VOC emission after RACT control
Cost-effectiveness of RACT control
Source: Booz, Allen & Hamilton Inc
EXHIBIT 1-6
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR SOLVENT METAL DEGREASING
IN THE STATE OF SOUTH CAROLINA
(NONATTAINMENT COUNTIES)
Discussion
About 700 plants in the four urban non-attainment counties
Value of shipments of firms in SIC groups af-
fected for non-attainment counties is approximately
SO. 7 billion, about 20% of the county totals for thesa
SIC groups
Where technically feasible, firms are substituting exempt
solvents
1,320 tons/year
Substitution. Otherwise lowest cost option as specified
by EPA will be used.
Equipment modifications as specified by the
RACT guidelines
Discussion
$0.23 million
SO.03 million (less than 0.01 percent of the
value of shipments of the effected firms)
Metal cleaning is only a fraction of raanu-
facturirg costs; pries effect'expected to
be less than 0.01 percent assuming a "direct cost passthrough"
Approximately 35' equivalent barrels of oil
per /ear increase
5-10 percent decrease for manually operated
degreasers. Will not effect conveyorized
cleaners.
No effect except a possible slignt 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.
980 tons/year (74 percent of 1977 VOC emission
level—however, this does not include emission
controls for exempt solvents)
S87 annualized cost per ton of emissions reduced
-------
Exhibit 1-7
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR TANK TRUCK GASOLINE
LOADING TERMINALS IN SOUTH CAROLINA
(NONATTAINMENT COUNTIES)
Current Situation Discussion
Number of potentially affected
facilities
Indication of relative importance
of industrial section to state
economy
Current industry technology
trends
1977 VOC actual emissions
Industry preferred method of
VOC control to meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment
Annualized cost
Price
Energy
Productivity
Employment
Market structure
1977 sales were $114 million with
annual throughput of 270 million
gallons at the affected facilities
New terminals are being designed with
vapor recovery equipment
872 tons per year
Submerge or bottom fill and vapor
recovery
Discussion
$1.4 million
$0.1 million (approximately 0.09
percent of value of shipments)
No major impact
Assuming full recovery of gasoline—
net savings of 5,362 barrels annually
from terminal emissions
No major impact
No direct impact
No direct impact
Problem area
VOC emission after control
Cost effectiveness of control
Gasoline credit from vapors from bulk
gasoline plants and gasoline service
stations require uniform RACT require-
ments throughout the state
87 tons per year
$48 annualized cost/annual ton of
VOC reduction from terminals assuming
gasoline credit from vapors returned
from bulk gasoline plants and gasoline
service stations
Source: Booz, Allen & Hamilton Inc.
-------
Current Situation
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 1-8
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR AFFECTED BULK GASOLINE
PLANTS IN THE STATE OF SOUTH CAROLINA
(NONATTAINMENT COUNTIES)
Discussion
40
1977 industry sales from affected bulk plants
were $21.9 million. The estimated annual through-
put was 52 million gallons.
Only small percent of industry has new/modernized
plants
676 tons per year
Top submerge fill and vapor balancing
Discussion
$550,000
$148,000 (approximately 0.68 percent of value
of shipments)
Assuming a "direct cost passthrough"
. Industry-wide—$0.0028 per gallon increase
. Small operations—$0,005 per gallon increase
Assuming full recovery of gasoline—net savings
of 3,400 barrels annually
No major impact
No major impact; however, for plants closing, po-
tential average of 4 jobs lost per plant closed-
Regulation could further concentrate a declining
industry
Severe economic impact for some small bulk
plant operations. Recovery efficiency of
cost effective alternative has not been
effectively demonstrated
VOC emission after RACT control *"178 tons per year
Cost effectiveness of RACT control $297 annualized cost/annual ton of VOC reduction
Source: Booz, Allen & Hamilton Inc.
-------
EXHIBIT 1-9
U.S. Environmental Protection Acrencv
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR STORAGE OF PETROLEUM
LIQUID IN THE STATE OF SOUTH CAROLINA
(NONATTAINMENT COUNTIES)
Current Situation
Number of potentially affected 44
storage tanks
Indication of relative impor-
tance of industrial section
Current industry technology
trends
VOC emissions
Preferred method of VOC control
to meet RACT guidelines
Affected Areas in Meeting1 RACT
Capital investment
Annualized cost
The annual throughput was an esti-
mated 260 million gallons
Internal floating roof tanks utiliz-
ing a double seal have been proven
to be more cost effective
1,425 tons per year
Single seal and internal floating
roof
$1.02 million
$118,000
Price
Energy
Productivity
Employment
Market Structure
Problem area
VOC emission after RACT
control
Cost effectiveness of RACT
control
Assuming a "direct cost" passthrough-
less than 0.05 cents per gallon
of throughput
Assuming 90 percent reduction of
current VOC level, the net energy
savings represent an estimated
savings of 8,000 equivalent barrels
of oil annually
No major impact
No major impact
No major impact
Potential availability of equipment
to implement RACT standard
142 tons per year
$92 annualized cost/annual ton
of VOC reduction
Source: Booz, Allen & Hamilton Inc.
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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
Annualized cost
Price
Energy
Productivity
Employment
EXHIBIT 1-10(1)
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR
GASOLINE DISPENSING FACILITIES
IN THE STATE OF SOUTH CAROLINA
(NONATTAINMENT COUNTIES)
Discussion
700 in the four urban nonattainment counties
4-county industry sales are $0,183
million with a yearly throughput of
0.362 billion gallons. Approximately
90 percent of the throughput (0.324
billion gallons) would be affected at
the 700 facilities
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
1,396 tons per year from tank loading
operation. The VOC emissions at the
700 affected facilities is estimated
to be 1,250 tons per year.
Submerged fill and vapor balance
Submerged fill and vapor balance
Discussion
$1.1 million
$0,263 million
Assuming a "direct cost passthrough"—
less than $0.00 per gallon of gasoline
sold in the 4 counties
Assuming full recovery: 389,000 gallons/
year (8,040 barrels of oil equivalent)
saveda
No major impact
No major impact
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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EXHIBIT 1-10(2)
Affected Areas in Meeting RACT
Market structure
RACT timing requirements (1981)
Discussion
Compliance requirements may accelerate
the industry trend towards high through-
put stations (i.e., marginal operations
may opt to shut down)
Retrofitting service stations within
time constraints may be difficult in a
few instances
Pro1em area
VOC emission after RACT control
Cost effectiveness of RACT
control
Older stations face higher retrofit
costs—potential concerns are dislocations
during installations
210 tons per year from tank loading
operation. 62 tons per year at the
affected facilities
$222 annualized cost/annual ton of
VOC reduction
Source; Booz, Allen & Hamilton Inc.
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EXHIBIT 1-11(1)
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR USE OF
CUTBACK ASPHALT IN THE STATE OF SOUTH CAROLINA
(NONATTAINMENT COUNTIES)
Current Situation
Potentially affected use
Indication of relative importance
of industrial sector to statewide
economy
Current industry technology
trends
1977 VOC emissions (actual)
Discussion
In 1977, use of cutback asphalt was
approximately 3,200 tons in the non-
attainment counties
1977 sales of cutback asphalt were
estimated to be $0.3 million in the
nonattainment counties
Most of the use of cutback asphalt is
for penetrating prime coat applications,
which are exempt
665 tons annually; 120 of which are
non-exempted
Industry preferred method of VOC Replace with asphalt emulsions
control to meet RACT guidelines
Assumed method of control to Replace with asphalt emulsions
meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment
Annualized cost
Price
Energy
Productivity
Employment
Discussion
$0.02 million
No change in paving costs are expected
No change in paving costs are expected
0a
No major impact
No major impact
A saving of 1,160 barrels of oil equivalent accrues to manufacturer,
no user. The total energy associated with manufacturing, processing
and laying one gallon of cutback is approximately 50,200 BTUs/gallon.
For emulsified asphalts, it is 2,830 BTUs/gallon. One barrel of oil
equivalent is assumed to have 6.05 million BTUs, and one ton of cutback
asphalt is assumed to have 256 gallons.
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EXHIBIT 1-11(2)
Affected Areas in Meeting RACT
RACT timing requirements (1981)
Problem area
VOC emission after RACT control
Cost effectiveness of RACT control
Discussion
Long-range supply of asphalt emulsions
are expected to be available
Winter paving
Net VOC emission reduction is estimated
to be 120 tons annually
$176 annualized cost/annual ton of VOC
reduction in the first year. In subse-
quent years, the cost is $0.
Source: Booz, Allen & Hamilton Inc.
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INTRODUCTION AND OVERALL
STUDY APPROACH
-------
2.0 INTRODUCTION AND OVERALL
STUDY APPROACH
This chapter presents an overview of the study's pur-
pose, scope and methodology. It is divided into six sec-
tions :
Background
Summary of State Implementation Plan revisions
and state's need for assistance
Scope
Approach
Quality of estimates
Definition of terms used.
Each of these sections is discussed below.
The approach and quality of estimates is discussed in
detail in each of the respective chapters dealing with the
specific industrial categories affected by the volatile or-
ganic compounds control regulations.
2-1
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2.1 BACKGROUND
The Clean Air Act Amendments of 19 77 required the states
to revise their State Implementation Plans (SIPs) to provide
for the attainment and maintenance of national ambient air
quality standards in areas designated as nonattainment. The
Amendments require that each state submit the SIP revisions
to the U.S. Environmental Protection Agency (EPA) by Janu-
ary 1, 1979. These proposed regalations should contain an
oxidant plan submission for major urban areas to reflect the
application of Reasonably Available Control Technology (RACT)
to stationary sources for which the EPA has published guide-
lines. The Amendments also require that the states identify
and analyze the air quality, health, welfare, economic, energy
and social effects of the plan provisions.
Under the direction of Region IV, the EPA contracted
with Booz, Allen & Hamilton Inc. (Booz, Allen) to assist the
states of Alabama, Georgia, Kentucky, North Carolina, South
Carolina and Tennessee in analyzing the economic, energy and
social impacts of the SIP revisions proposed by these states.
The assignment was initiated on September 28, 1978, and, as
a first step, the proposed SIP revisions and the type of as-
sistance desired by each state were reviewed.
After a review with each of the states and EPA Region
IV representatives, a work scope was defined that would in-
clude in the study an analysis of the direct economic and
energy impacts for those industrial segments most likely to
have a significant impact at the statewide level. For the
most part this included industrial categories that had more
than a few facilities potentially affected. The next section
discusses those specific industrial categories included in
this work scope.
2-2
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2.2 SUMMARY OF PROPOSED SIP REVISIONS IN SOUTH CAROLINA
AND THE STATE'S NEED FOR CONTRACTOR SUPPORT
South Carolina has proposed statewide regulations to
reduce volatile organic compound (VOC) emissions by imple-
menting the Reasonably Available Control Technology (RACT)
guidelines developed by the EPA for existing stationary
sources. The state has also proposed regulations to control
particulates emissions.
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 eight of the fifteen industrial categories for
which the EPA has published RACT guidelines. These eight
RACT industrial categories are described in the next section.
The other seven industrial categories (surface coating of
cans, coils, automobiles, metal furniture, magnet wire
and large appliances and miscellaneous refinery sources)
were excluded from this study because 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.
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 SIC re-
visions for six states in EPA, Region IV. The study will em-
phasize the analysis of direct economic costs and benefits
of the proposed SIP revisions. Secondary (social and energy)
impacts will also be addressed but are not the major study
emphasis.
In South Carolina, the economic impact will be analyzed
for the implementation of RACT guidelines to reduce VOC
from the following eight industry categories:
Surface coating of paper
Surface coating of fabrics
Solvent metal cleaning
Bulk gasoline terminals
Bulk gasoline plants
Storage of petroleum liquids in fixed-roof tanks
Service stations—Stage I
Use of cutback asphalt.
The major study guidelines in the determination of the
economic impact of the RACT guidelines are discussed below.
The emission limitations for each industrial
category will be studied at the control level
established by the RACT guidelines. These are
presented in Exhibit 2-1, on the following page.
All costs and emission data were presented for
1977.
Emissions sources included were the use of cutback
asphalt statewide and existing stationary point
sources in the applicable industrial categories
in the non-attainment areas for ozone with the
following potential VOC emission rates:
10 tons or more in the four urban non-
attainment counties (Richland, Lexington,
Berkeley, and Charleston)
- 100 tons or more in York county
2-4
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r-xhibit 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 SPECIFIC INDUSTRY CATEGORIES
Category
RACT Guideline Emission Limitations
Surface Coating Categories Based on
Low Organic Solvents (lbs. solvent)
per gallon of coating, minus water)
Surface coating of:
Paper
Fabrics and vinyl coating
Fabric
Vinyl
Solvent metal cleaning
Cold cleaning
'Conveyorized degreaser
Open top degreaser
Bulk gasoline terminals
Bulk Gasoline Plants
2.9
2.9
3.8
Provide cleaners with: cover,
facility to drain clean parts;
additional freeboard; chiller or
carbon absorber. Follow suggested
procedures to minimize carryouts.
Provide cleaners with: refrigerated
chillers; or carbon adsorption system;
drying tunnel or rotating basket;
safety switches; covers. Follow
suggested procedures to minimize
carryout.
Provide cleaner with: safety
switches; powered cover; chiller;
carbon absorber. Follow suggested
procedures to minimize carryout.
Equipment such as vapor control
system to prevent mass emissions of
VOC from control equipment to ex-
ceed 80 milligrams per liter
(4.7 grams per gallon) of gasoline
loaded.
Provide submerged filling and vapor bal-
ancing or equivalent control to reduce
VOC emissions. Follow suggested procedures
to minimize vapor losses.
-------
Exhibit 2-1(2)
Category
RACT Guideline Emission Limitations'
Storage of petroleum liquids
in fixed roof tanks
Provide single seal and internal
floating rcof to all fixed roof
storage vessels with capacities
greater than 150,000 liters (39,000
gal.) containing volatile petroleum
liquids for which true vapor pres-
sure is greater than 10.5 kilo
pascals (1.51: psia)
Service stations (Stage I)
Provide submerged fill and vapor
balance for any stationary storage
tank located at a gasoline dis-
pensing facility.
Use of cutback asphalt The manufacture, mixing, storage,
use or application may be approved
where: long-life stockpile storage
is necessary; the use or application
at an ambient temperature less than
10°C (50 F) is necessary; or it' is
to be used solely as a penetrating
prime coat
Annotated description of RACT guidelines.
Source: Regulatory Guidance for Control of Volatile Organic Compound
Emissions from 15 Categories of Stationary Sources, U.S.
Environmental Protection Agency, EPA-90512-78-001, April 1978.
-------
The following volatile organic compounds were
exempted:
Methane
Ethane
Trichlorotrifluorethane (Freon 113)
1,1,1-trichloroethane (methyl chloroform) .
The timing requirement for implementation of con-
trols to meet RACT emission limitations was
May 1, 19 81.
Additional study guidelines for specific industry
categories include the following:
Bulk gasoline plants will be studied for the
four urban counties only since emissions from
bulk plants do not exceed 100 tons per year
Bulk terminals will be studied for the four
urban counties only since no bulk terminals
have been identified in York county
Service stations will be studied for the four
urban counties only because their emissions
do not exceed 100 tons per year. Service
stations with less than 2,000 gallon tank
capacity will be exempt from the regulation
Solvent metal cleaning will be studied for the
four urban counties only assuming that no solvent
metal cleaners with over 10 0 tons VOC emissions
exist in York County
The use of cutback asphalt will be studied
statewide.
2-5
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2.4 APPROACH
This section describes the overall approach and method-
ology applied in this assignment. In general, the approach
varied for each state and also for each industrial category-
studied. This section specifically describes the overall
approach that was applied for the State of South Carolina.
The methodology applied to determine the economic impact for
each industrial category in South Carolina is described in
further detail in the first section of each chapter dealing
with the specific industry category.
There are five parts to this section to describe the
approach for determining estimates of:
Industry statistics
VOC emissions
Process descriptions
Cost of controlling VOC emissions
Comparison of direct costs with selected direct
economic indicators
2.4.1 Industry Statistics
The assembly of economic and statistical data for each
industrial category was an important element in establishing
the data base that was used for projection and evaluation
of the emissions impact. Some of the major variables for
each industrial category were:
Number of manufacturers
Number of employees
Value of shipments
Number of units manufactured
Capital expenditures
Energy consumption
Productivity indices
2-6
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Current economics (financial) status
Industry concentration
Business patterns (small vs. large; downstream
integration)
Age distribution of facilities
Future trends and developments.
Some of the industrial categories studied cover a large
number of potentially affected facilities. For these cate-
gories, industry statistical data were collected by applying
a categorical approach rather than by attempting to identify
all the individual firms likely to be affected. The indus-
trial categories studied by this approach included:
Solvent metal cleaning
Gasoline service stations
Use of cutback asphalt.
For these industrial categories, secondary data sources
and nonconfidential Booz, Allen files served as the primary
resources for the data base. Industry and association in-
terviews were then conducted to complete, refine and validate
the industry statistical data base.
For the remaining industrial categories studied, a more
deliberate approach was applied:
For the surface coating categories, a list of
the facilities potentially affected by the RACT
guidelines was provided by the South Carolina
Department of Health and Environmental Control.
This list was refined by a review of secondary
data sources and telephone interviews performed
by the Booz, Allen study team.
For bulk gasoline plants and terminals and fixed-
roof tanks, the list of potentially affected
facilities was compiled by the South Carolina
Department of Health and Environmental Control.
Industry category statistical data were compiled
using secondary sources such as:
2-7
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Department of Commerce
Census of Manufacturers
Trade associations
Bureau of Labor Statistics
National Technical Information Services.
The industry statistical data were refined by two
mechanisms:
Assessing the statistical data for reason-
ableness in comparison to the list of poten-
tially affected facilities
Using industry and association interviews
for completion and validation.
2.4.2 VOC Emissions
Emissions data were provided by the state and were
refined by the Booz, Allen study team using different
approaches depending upon the availability and completeness
of data on the potentially affected facilities.
For bulk gasoline plants and terminals and fixed-
roof tanks, emissions were estimated by using
facility characteristics data provided by the
state and emission factors developed by U.S. EPA.
For the surface coating industry categories, emis-
sions were estimated by using data provided by the
South Carolina Department of Health and Environ-
mental Control and data obtained through telephone
interviews with affected industries.
For the other categories to be studied, the emis-
sions were estimated by applying relevant factors
(VOC emissions per facility, throughput, etc.)
that had been developed by EPA studies. Although
this categorical approach cannot be validated to the
degree of a point source by point source approach,
the emissions can be reasonably estimated for the
five nonattainment counties because of the large
number of sources in each RACT industrial category.
Emissions were estimated by this approach for the
following RACT industrial categories:
Solvent metal cleaning
Service stations
Cutback asphalt.
2-8
-------
The emission estimates for each of the eight RACT indus-
trial categories studied were refined during industry in-
terviews .
2.4.3 Process Descriptions
For' each of the industrial categories, the basic tech-
nology and emission data were reviewed and summarized con-
cisely for subsequent evaluation of engineering alternatives.
In this task, the RACT documents that had been prepared for
each industrial category and other air pollution control
engineering studies served as the basis for defining tech-
nological practice. Additional alternatives of control that
met the requirements of the RACT guidelines were identified
from literature search. The most likely control alternatives
were assessed and evaluated by:
Technical staff at Booz, Allen
Interviews with industry representatives
Interviews with EPA representatives
Interviews with equipment manufacturers.
2.4.4 Cost of Controlling VOC Emissions
The cost of control to meet the requirements of the
RACT guidelines had been presented in the RACT documents,
other technical EPA studies and trade journal technical
documents and by industry representatives. The approach
applied in developing capital and annualized cost estimates
was to:
Utilize available secondary source information as
the primary data source
Validate the control alternatives industry is
likely to apply
Calibrate these cost estimates provided in tech-
nical documents.
It was not within the purpose or the scope of this
project to provide detailed engineering costs to estimate
the cost of compliance.
Cost data presented within the body of the report were
standardized in the following manner:
2-9
-------
All cost figures are presented for a base year,
1977.
Capital cost figures represent installed equipment
cost including:
- Engineering
Design
Materials
Equipment
Construction.
The capital cost estimates do not account for
costs such as:
Clean-up of equipment
Lost sales during equipment downtime
Equipment start-up and testing
Initial provisions (spare parts).
Capital related annual costs are estimated at 25
percent of the total capital cost per year (unless
explicitly stated otherwise). The estimated pro-
cedure applied was built up from the following
factors:
Depreciation—assuming straight-line over
a ten-year life
Interest—10 percent
Taxes and insurance—4 percent
Maintenance—5 percent
The capital-related annual costs do not account
for investment costs in terms of return or invest-
ment parameters (i.e., the "opportunity cost" of
money is not included).
Annualized costs of compliance with RACT guide-
lines were estimated for each of the control
alternatives studied. The annual operating costs
included were:
- Direct labor
Raw material costs (or savings)
- Energy
Product recovery cost (or savings)
Maintenance.
2-10
-------
Other types of costs, not included in this analy-
sis, involve compliance costs, such as:
Demonstration of control equipment efficiency
Supervisory or management time
Cost of labor or downtime during installation
and startup.
The annualized cost is the total of direct oper-
ating costs (including product or raw material
recovery) and the capital related annual costs.
2.4.5 Comparison of Direct Cost with Selected Direct
Economic Indicators"
In each of the industrial categories studied, after the
costs (or savings) of compliance had been determined, these
costs were compared with selected economic indicators. This
comparison was performed to gain a perspective on the com-
pliance costs rather than to estimate price changes or other
secondary effects of the regulation. Presented below are
typical comparisons of direct costs with indicators that are
presented in this study.
Annualized cost in relation to current price—To
gain a perspective on the compliance cost in re-
lation to current prices of the manufactured items
at the potentially affected facilities, the annu-
alized cost is presented in terms of a price in-
crease assuming a direct pass-through of costs to
the marketplace.
This analysis was based on the average cost
change (including those facilities that may
have little or no economic impact associated
with meeting the proposed standards) divided
by the average unit price of goods manufac-
tured.
For this reason as well as many others (that
might be addressed in a rigorous input-output
study to estimate eventual price increase),
this analysis should not be interpreted as
forecast of price changes due to the proposed
standards.
2-11
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Annualized costs as a percent of current value of
shipment—The annualized costs applied are for all
those facilities potentially affected divided by
the estimated value of shipments for the statewide
industrial category (i.e., including those facil-
ities which currently may meet the proposed stand-
ard) . This approach tends to understate the effect
to those specific firms requiring additional ex-
penses to meet the proposed standard. Therefore,
when available, the compliance cost is also pre-
sented as a percent of the value of shipments for
only those firms not currently meeting the pro-
posed regulation.
Capital investment as a percent of current annual
capital appropriations—Estimated capital invest-
ment for the potentially affected facilities in
the five nonattainment counties divided by the
estimated capital appropriations for the industry
affected as a whole in the state (including those
facilities that may not require any capital in-
vestment to meet the proposed standard).
2-12
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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 addi-
tion, the study team has categorically ranked the overall
data quality of the major sources and, therefore, of the
outcomes. These data quality estimates were ranked into
three categories:
High quality ("hard data")—study inputs with
variation of not more than + 25 percent
Medium quality ("extrapolated data")—study inputs
with variation of + 25 to 75 percent
Low quality ("rough data")—study inputs with
variation of + 50 to 150 percent.
Each of these data quality estimates is presented in
the individual chapters. The overall quality ranking of the
study inputs for each RACT industrial category was generally
in the medium quality range.
2-13
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2.6 DEFINITIONS OF TERMS
Listed below are definitions of terms that are used
in the body of the report:
Cap-cure system—the equipment (including
hoods, ducts, fans, etc.) used to contain,
capture, or transport a pollutant to a
control device.
Coating applicator—an apparatus used to
apply a surface coating.
Coating line—one or more apparatuses or
operations which include a coating appli-
cator, flash-off area and oven, wherein
a surface coating is applied, dried and/
or cured.
Control device—equipment (incinerator,
adsorber or the like) used to destroy
or remove air pollutant(s) prior to dis-
charge to the ambient air.
Continuous vapor control system—a vapor
control system that treats vapors displaced
from tanks during filling on a demand basis
without intermediate accumulation.
Direct cost pass-through—the relationship
of the direct annualized compliance cost
(increase or decrease) to meet the RACT
limitations in terms of units produced
(costs per unit value of manufactured goods.)
Emission—the release or discharge, whether
directly or indirectly, of any air pollutant
into the ambient air from any source.
Facility—any building, structure, installa-
tion, activity or combination thereof which
contains a stationary source of air contam-
inants .
Flashoff area—the space between the appli-
cation area and the oven.
Hydrocarbon--any organic compound of carbon
and hydrogen only.
2-14
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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 carbonate.
Oven—a chamber within which heat is used
to bake, cure, polymerize and/or dry a
surface coating.
Prime coat--the first film of coating
applied in a two-coat operation.
Reasonably available control technology
(RACT)—the lowest emission limit as defined
by EPA that a particular source is capable
of meeting by the application of control
technology that is reasonably available
considering technological and economic
feasibility. It may require technology
that has been applied to similar, but not
necessarily identical, source categories.
Reid vapor pressure—the absolute vapor
pressure of volatile crude oil and volatile
nonviscous petroleum liquids, except liqui-
fied petroleum gases, as de-termined by
American Society for Testing and Materials,
Part 17, 1973, D-323-72 (Reapproved 1977).
Shutdown—the cessation of operation of
a facility or emission control equipment.
2-15
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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,"
19 62*
Equivalent barrel of oil—energy demand is
converted into barrels of oil at the conver-
sion rate of 6,000,000 BTU per barrel of
oil.
Vapor collection system—a vapor transport
system which uses direct displacement by the
liquid loaded to force vapors from the tank
into a vapor control system.
Vapor control system—a system that prevents
release to the atmosphere of at least 90
percent by weight of organic compounds in
the vapors displaced from a tank during
the transfer of gasoline.
Volatile organic compound (VOC)—any compound
of carbon that has a vapor pressure greater
than 0.1 millimeters of mercury at standard
conditions excluding carbon monoxide, carbon
dioxide, carbonic acid, metallic carbides
or carbonates and ammonium carbonate.
2-16
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5.0 THE ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR PLANTS SURFACE COATING PAPER
IN THE NONATTAINMENT AREAS FOR OZONE
IN SOUTH CAROLINA
-------
5.0 THE ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR PLANTS SURFACE COATING PAPER
IN THE NONATTAINMENT AREAS FOR OZONE
IN SOUTH CAROLINA
This chapter presents a detailed analysis of the
impact of implementing RACT for plants in five nonattain-
ment counties in South Carolina (Charleston, Berkeley,
York, Lexington, and Richland) which are engaged in the
surface coating of paper. This is meant to include protec-
tive 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.
This analysis includes those paper coaters in the non-
attainment area with potential emissions over 10 tons per
year.
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
estimates of:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Cost of controlling VOC emissions
Economic impacts
for plants engaged in the surface coating of paper. The
quality of these estimates is discussed in the last part
of this section.
5.1.1 Industry Statistics
Paper coating is practiced in a number of industries.
Among products that are coated using organic solvents
are: adhesive tapes; adhesive labels; decorated, coated
and glazed paper; book covers; office copier paper;
carbon paper; typewriter ribbons; photographic film;
paper cartons; and paper drums. The firms coating paper
are classified in a number of groupings in the U.S.
Department of Commerce's Standard Industrial Classifi-
cation system. The major coaters may be found in the
following 16 SIC groups:
SIC Description
2611 Pulp mills
2621 Paper mills, except building paper mills
2631 Paperboard mills
2641 Paper coating and glazing
2643 Bags, except textile bags
2645 Diecut paper and paperboard and cardboard
2649 Paper converting, n.e.c.
2651 Folding paperboard boxes
3291 Abrasive products
3292 Asbestos products
3293 Gaskets, packing and sealing devices
3497 Metal foil and leaf
3679 Electronic components, n.e.c.
3842 Orthopedic, prosthetic and surgical
appliances and supplies
3861 Photographic equipment and supplies
3955 Carbon paper and inked ribbons
5-2
-------
This list does not include plants listed in the SIC
category 2700 (Printing, Publishing and Allied Industries),
where paper coating other than printing may also be a
part of the overall processing of the printed product.
Statistics concerning these industries were obtained
from a number of sources. All data where possible were
converted to the base year 1977 for the state using
scaling factors developed from U.S. Department of Commerce
data as presented in County Business Patterns. The
primary sources of economic data were the 1972 Census of
Manufactures and 1976 Annual Survey of Manufactures.
The South Carolina Industrial Directory (1978) and industry
oriented annuals such as Lockwoods' Directory ,Davidson's
Blue Book and the Thomas Register of American Manufacturers
were used to identify some of the individual companies
engaged in paper conversion (i.e., coating of paper in roll
form for sale to other manufacturers) and to identify other
paper coating firms in the state.
5.1.2 VOC Emissions
The actual firms expected to be affected by the
proposed regulations were identified from this tentative
list by crosschecking the firms with the South Carolina
Bureau of Air Quality Control source emissions inventories
and the state annual survey file.
The South Carolina survey files, which at the time
the data were gathered were more up to date than the
emissions inventories, were used as a basis for estimation
of the total VOC emissions to be expected in the five non-
attainment counties. This procedure is believed to account
for the majority of the emissions in the five nonattainment-
counties and for all of the large single sources.
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
5-3
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feasibility of applying the various control methods to
paper coating discussed in this document was reviewed
with coating firms, coating suppliers, coating equipment
manufacturers and industry associations. These methods
include both coating reformulation and the use of control
devices, such as incinerators and carbon adsorbers.
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 an interview
with one of the South Carolina coaters.
5.1.4 Cost of Control and Estimated Reduction of VOC
Emission!;
The overall costs of control of VOC emissions in
accord with the proposed regulations were determined
from:
Generalized cost formulas 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, Springborn Laboratories.
Additional cost data were supplied by equipment and
material suppliers and published literature sources.
Major coaters in South Carolina, 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 formulas.
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 produced.
The procedure is described below:
Relate incremental costs to the part of the
statewide production that is affected by the
regulation (firms not now meeting RACT) and
clearly define these terms.
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 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
South Carolina. A rating scheme is presented in this
section to indicate the quality of the data available
for use in this study. A rating of "A" indicates hard
data (data that are published for the base year), "B"
indicates data that were extrapolated from hard data and
"C" indicates data that were not available in secondary
literature and were estimated based on interviews, analysis
of previous studies and best engineering judgment. Exhibit
5-1, on the following page, rates each study output listed
and the overall quality of the data.
5-5
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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 South Carolina 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 affect upon individual
firms.
5.2.1 Size of the Industry
The 1978 South Carolina Industrial Directory and
Lockwoods' Directory report a total of 76 firms in 16 SIC
categories in South Carolina 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 $973 million, with a total of about 20,000
employees. New capital expenditures are estimated to be
about $98 million annually, based on the most recent
(1976) Annual Survey of Manufactures.
Of the total 76 firms, five have been identified as
actual paper coaters. (These are listed in Exhibit 5-5
in Section 5.3.5.) Of these, Bird & Son, Inc. is not
covered under the proposed standard because it uses an
exempt coating process and Bowater Carolina Corporation
meets the proposed standard because all coating materials
are water-based. The remaining three firms, which are
potential emitters under the proposed standard , are
expected to be impacted directly by the proposed standard.
(See discussion in Section 2.4). The total annual value
of shipments of these three firms is estimated at $34 million
to $45 million based on an average of $60,000 to $80,000
of shipments per employee which is characteristic of firms
in SIC 2641, paper coating.
For all five firms, the annual value of shipments is
estimated at $102 million to $136 million.
A potential emitter is a plant which would exceed state emission
limits if operated at rated capacity for 24 hours per day seven
days a week.
5-6
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EXHIBIT 5-2
U.S. Environmental Protection Aqency
1977 INDUSTRY STAT fSTTCS—SURFACE
COATING OF PAPER SIC GROUPS IN SOUTH CAROLINA
SIC Code
2611
2621
2631
2641
2643
2645
26.9
2651
3291
3292
3293
3497
3679
3842
3861
3955
Total
Description
Pulp mills
Paper mills, except building
paper mills
Paperboard mills
Paper coating and glazing
Bags, except textile bags
Diecut paper and paperboard
and cardboard
Paper converting, n.e.c.
Folding paperboard boxes
Abrasive products
Asbestos products
Gaskets, packing and scaling
devices
Metal foil and leaf^
Electronic components, n.e.c
Orthopedic, prosthetic and
surgical appliances and supplies
Photographic equipment and
supplies
Carbon paper and inked ribbons'*
Number
of
Plants
Tota I
Number of Total
Employees Payrol1
($i,oon,nnn)
22
13
76
893
54
3331
858
1909
56
271
229
II
184
1403
6846
3827
70
19942
16.1
.912
57.0
9.84
22.5
.688
3.30
3.06
.152
2.32
16.7
B5.5
43.8
1 23
263.102
Estimated Value
of Shipments
($1.000,000)
1.22
5.17
194
69. 7
132
3.97
15.9
13. 1
.663
11.3
53.8
298
16B
6.00
972.823
Estimated
New Expenditures
(<: 1, ooo, ooo)
23.0
.477
46.8
2.17
3 81
. 116
.325
.398
.0215
.241
1.97
12.7
5.95
.244
98.2225
a. Estimated by using ratios of (value of shipment/total employment) and (capital expenditures/
total employment) for each SIC group as published in 1976 Annual Survey of Manufacture where
value of shipments or expenditures are not tabulated for the state.
b. None listed.
Source: Booz, Allen & Hamilton Inc.: 1976 County Business Patterns, arid 1976 Annual Survey of
Mannfactures, U.S. Department of Commerce and the 1977
So lar a ] t_r )_i r ry^.
-------
5.2.2. Comparison of the Industry to the State Economy
A comparison of the value of shipments of the 65
plants in the 16 SIC categories listed in Section 5.1.1
with the total state manufacturing economy ($16.6 billion)
indicates that these plants represent about 5.9 percent
of the total value of manufacturing shipments in South
Carolina. These 65 firms employ about 5.4 percent of the
371,000 manufacturing employees in the state. The five
firms having paper coating operations represent 0.61 to
0.82 percent of the total value of manufacturing shipments
in South Carolina and employ about 0.46 percent of all
manufacturing employees.
The three directly impacted firms represent 0.20 to
0.27 percent of the total value of manufacturing shipments
in South Carolina and employ about 0.15 percent of all
manufacturing employees.
Because several of the firms manufacture other goods
in addition to coated paper, the. figures cited above prob-
ably represent an upper limit.
5.2.3 Historical and Future Patterns of the Industry
The nationwide value of shipments in the industries
expected to be affected by the proposed paper coating
regulations, in general, exceed the growth rate of the
economy. As summarized in Exhibit 5-3, the value of
shipments increased in every category between 1972 and
1976, with an average annual growth rate of about 12.1
percent over the period. Compared to an average infla-
tionary rate of 6 to 8 percent, this is equivalent to a
real growth rate of 4 to 6 percent. In some individual
categories, growth rates were even greater. Paper pro-
duction increased by an uncorrected average annual growth
rate of 16.5 percent; metal and foil by 16 percent; paper
coating and glazing by about 12 percent, only slightly
less than the average. It is expected that the growth
rate will continue at these rates for the near,future.
5-7
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SIC
2611
2621
2631
2641
2643
2645
2649
2651
3291
3292
3293
3499
3679
3842
3861
3955
Sour
EXHIBIT 5-3
U.S. Environmental Protection Agency
HISTORICAL TRENDS IN VALUE OF SHIPMENTS OF
U.S. PLANTS ENGAGED IN PAPER COATING ($ millions)
1972
1973
1974
1975
1976
710
849
1,525
1,630
2,055
6,385
7,514
9,942
9,650
11,768
4,153
4,862
6,516
6,055
6,724
1,954
2,284
2,645
2,626
3,074
1,886
2,183
2,867
2,980
3,379
676
747
923
943
1,027
631
833
1,079
1,090
1,288
1,487
1,644
1,890
1,952
2,223
888
1,067
1,235
1,222
1,433
763
823
963
900
988
665
723
835
843
1,020
702
753
973
1,065
1,267
3,060
3,430
3,210
3,450
4,120
1,450
1,620
1 ,800
2,090
2,240
5,624
6,435
7,490
7,627
8,844
237
268
309
285
294
31,271
36,035
42,400
44,408
51,744
Survey of Manufactures, U.S. Department of Commerce.
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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. 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.
* Control of Volatile Organic Emissions From Existing Stationary
Sources, Volume II, EPA-450/2-77-008
5-8
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Number
of coating
lines
2
5
8
2
10
20
3
3
1
EXHIBIT 5-4
U.S. Environmental Protection Agency
EMISSION DATA FROM TYPICAL PAPER COATING PLANTS
Solvent Solvent Control
Usage Emissions Efficiency (%) Control Device
(lb./day) (lb.day)
10,000 10,000 - None
15,000 15,000 - None
9,000 9,000 - None
1,200 1,200 - None
24,000 950 96 Carbon
adsorption
55,000 41,000 90 Carbon
adsorption
(not all lines
controlled)
5,000 1,500 90 Carbon
adsorption
21,000 840 96 Carbon
adsorption
10,500 500 96 Afterburner
a. Neglecting emissions that are not captured in the hooding system.
Source: Control of Volatile Organic Emissions Existing From Stationary Sources, Vol. II,
EPA-450/2-77-008.
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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 reguire 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.
5-9
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5.3.3 Current VOC Emissions
This section presents the estimated VOC emissions
from paper coating operations in South Carolina for the
year 1977. A summary of applicable emissions for the
paper coating RACT category is presented in Exhibit 5-5.
Plants listed are believed to represent the major single
sources of emissions in the five nonattainment counties
snd in total represent the major portion of paper coating
emissions.
Applicable current emissions from paper coating in
South Carolina are approximately 3,360 tons per year.
This figure is based on plant-by-plant data in State of
South Carolina files on companies expected to be affected
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.
In the following section are discussed several
methods of low solvent and solventless systems, which
have been demonstrated to be applicable to some paper
coating products, and the two principal add-on systems,
incineration and carbon adsorption, generally used for
emission control. This information has been extracted
principally from the previously cited EPA report, Control
of Volatile Organic Emissions from Existing 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.
5-10
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EXHIBIT 5-5
U.S. Environmental Protection Agency
COMPANY ESTIMATES OF PAPER COATING EMISSIONS
AS REPORTED TO BOOZ, ALLEN & HAMILTON
Company Name
Location
Amstar Cor|>oration
Charleston (Charleston)
Anchor Continental Co.
Columbia (Richland)
2641
3842
Employees
102
Applicable
Paper Coating Emissions
Without Control
(tons per year)
Current
Control
Method*5
Cart>on adsorption
Applicable
Paper Coating Emissions
With Cunont Controls
(tonii per year I
207
4047f
Bird £ Son, Inc.
Charleston (Charleston)
Dowater Carolina Corp.
Catawba (York)
2641
U78
Carolina Gravure
Lexington (Lexington)
3861
Totals
a Not reported,
b
This firm uses an exempt coating process.
c
This firm uses water-based coating materials exlusively.
d
The three firms directly impacted by the proposed regulation employ 572 people.
e
The three firms directly impacted by the regulation emit 3,357 tons per year.
Applicable emissions under RACT guidelines are 3,120 tons per year.
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5.3.5
Low Solvent and Solventless Coatings
In Exhibit 5-6, on the following page, are listed
several types of coating materials which have found
utility in paper coating, and an estimate of expected
solvent reduction.
5.3.5.1 Waterborne Coatings
Waterborne coatings have long been used in coating
paper to improve printability and gloss. However, newer
coatings have been developed in which a synthetic insoluble
polymer is carried in water as a colloidal dispersion or
an emulsion. This is a two-phase system in which water
is the continuous phase and the polymer resin is the
dispersed phase. When the water is evaporated and the
coating cured, the polymer forms a film that has proper-
ties similar to those obtained from organic-solvent-based
coatings.
5.3.5.2 Plastisols and Organisols
Plastisols are a colloidal dispersion of synthetic
resin in a plasticizer. When the plasticizer is heated,
the resin particles are solvated by the plasticizer so
that they fuse together to form a continuous film.
Plastisols usually contain little or no solvent, but
sometimes the addition of a filler or pigment will change
the viscosity so that organic solvents must be added to
obtain desirable flow characteristics. When the volatile
content of a plastisol exceeds 5 percent of the total
weight, it is referred to as an organisol.
Although organic solvents are not evaporated from
plastisols, some of the plasticizer may volatilize in the
oven. This plasticizer will condense when emitted from
the exhaust stack to form a visible emission.
5.3.5.3 Hot Melt Coatings
Hot melt coatings contain no solvent; the polymer
resins are applied in a molten state to the paper surfaces.
All the materials deposited on the paper remain as part
of the coating. Because the hot melt cools to a solid
coating soon after it is applied, a drying oven is not
needed to evaporate solvent or to cure the coating.
Energy that would have been used to heat an oven and to
heat makeup air to replace oven exhaust is therefore
saved.
5-11
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EXHIBIT 5-6
U.S. Environmental Protection Agency
ACHIEVABLE SOLVENT REDUCTIONS USING LOW
SOLVENT COATINGS IN PAPER COATING INDUSTRY
Type of Low Solvent-Coating
Waterborne coatings
Plastisols
Hot melts
Extrusion coatings
Pressure-sensitive adhesives
Waterborne
Hot melts
Prepolymer
Silicone release agents
100 percent nonvolatile coatings
Waterborne emulsions
Reduction Achievable (%)a
80-99
95-99
99+
99+
80-99
99
99
99+
80-99
Based on comparison with a conventional coating containing
35 percent solids by volume and 65 percent organic solvent
by volume.
Source: Control of Volatile Organic Emissions From Existing
Stationary Sources, Volume II, EPA-450/2-77-008.
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One disadvantage with hot melt coatings is that
materials that char or burn when heated cannot be applied
by hot melt. Other materials will slowly degrade when
they are held at the necessary elevated temperatures.
5.3.5.4 "Extrusion Coatings
A type of hot melt coating, plastic extrusion
coating is a solventless system in which a molten thermo
plastic sheet is discharged from a slotted die onto a
substrate of paper, paperboard or synthetic material.
The moving substrate and molten plastic are combined in
a nip between a rubber roll and a chill roll. A screw-
type extruder extrudes the coating at a temperature
sometimes as high as 600°F. Low and medium density
polyethylene are used for extrusion coating more than
any other types of resins.
5.3.5.5 Pressure-Sensitive Adhesive Coatings
Waterborne adhesives have the advantage that they
can be applied with conventional coating equipment.
Waterborne emulsions, which can be applied less expensively
than can 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.
5.3.5.6 Silicone Release Coatings
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.
5-12
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Some silicone coating materials which are under
development use single solvent systems that can be
readily recovered by carbon adsorption. Current coatings
are troublesome since some silicone is carried into the
adsorber where it clogs the carbon pores to reduce
adsorption efficiency.
5.3.6 Incineration
Catalytic and direct thermal incineration processes
convert hydrocarbons to carbon dioxide and water at high
temperatures. Incineration is widely accepted as a
reliable means of reducing hydrocarbon emissions by 90
percent or more.
Generally, the major disadvantage of this approach
is the increased energy required to raise the exhaust
gas temperatures above 1,200°F for direct incineration
and 700°F for catalytic incineration. Another problem
is the generation of nitrogen oxides in direct fired
incinerators because of the exposure of air to high-
temperature flames.
The increased energy consumption can, in some
cases, be reduced or eliminated by heat exchange of the
exhaust gases with fresh emissions (primary heat recovery)
or by use of the hot incinerator exhaust gases in process
applications (secondary heat recovery). Typical use of
secondary heat recovery is for oven heat in drying or
baking ovens. In fact, with efficient primary exchange
and secondary heat recovery, total fuel consumption of
an incinerator-oven system can be less than that for the
oven before the incinerator is added. The heat required
to sustain the system comes from the combustion of the
volatile organic compounds in the exhausts.
Paper coaters who use coating machinery for a
multiplicity of processes have commented that catalytic
incineration would probably not be used because of the
possibility of catalyst poisoning. Direct incineration
would be used.
5.3.7 Carbon Adsorption
Carbon adsorption has been used since the 1930s for
collecting solvents emitted from paper coating operations.
Most operational systems on paper coating lines were in-
stalled because they were profitable. Pollution control
has usually been a minor concern.
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.
5-14
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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 based on the emissions as
discussed in Section 5.3.3 of this report. Where possible,
the validity 'of the costs were confirmed with coating
firms and equipment manufacturers.
When possible, coaters in South Carolina have already
switched to water-based or low solvent systems. One, Bowater
Carolina Corporation is using water-based coating materials
exclusively. Another firm which is preparing for a major
expansion, will only add coating systems which meet the pro-
posed requirements. Of the three firms using the current
high solvent systems Anchor Continental will probably use
carbon adsorption controls and Carolina Gravure and Amstar
will probably use incineration with primary heat recovery.
These estimates are based, in part, on interviews with
the firms.
5.4.1 Costs of Alternative Control Systems
Carbon adsorption and incineration system costs were
taken directly from EPA-450/2-76-028. The cost estimates for
both systems are based on the assumption that exhaust air
flow rates can be reduced sufficiently to attain low explosion
limit (LEL) levels of 25 percent. This is possible with
well-designed ovens where excess air can be reduced or
where product characteristics allow. Lower LEL levels
require higher air flow and thus result in higher control
costs.
Several paper coaters indicate that 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 temperatures or
drying times must be increased. Because of tie heat sen-
sitivity of some coatings, temperature increases may not
be possible. Increase in drying time will necessitate
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
5-15
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decrease air flow rates sufficiently to increase VOC con-
centrations 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.
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. 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 were made on the assumption of a moderately
difficult retrofitted system. In specific situations, some
coaters have found actual installed costs to be three to
five times those presented in the EPA document referred to
earlier.
5.4.2 Estimated Statewide Costs
The total emissions considered to be applicable
under RACT, as discussed in Section 5.3.4 of this report,
are about 3,360 tons per year for the three directly impacted
firms. These firms have evaluated alternative control
methods and would probably select an incineration system
or carbon adsorption system.
Total costs of compliance are based on 3,12 0 ton?
per year of emissions being reduced by incineration and
240 tons per year of emissions being reduced by carbon
adsorption. It is reported that one major manufacturer
already has plans to control a higher portion of its
emissions and may be able to meet the RACT limitations.
Therefore, the costs of compliance included in this section
would be overstated if no controls beyond those planned
are required at this facility.
The air flow rates for each of the affected firms were-
determined on the assumption of a 25 percent approach to LEL,
other assumptions summarized in Exhibit 5-7 and each 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, the
capital costs for add-on incineration were estimated to
be $1.98 million, with annualized costs of $852,000. Both
are adjusted for inflationary increases from mid-1975
(base period for EPA-450/2-76-028 data) to mid-1977.
5-16
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EXHIBIT 5-7
U.S Environmental Protection Agency
SUMMARY OF ASSUMPTIONS USED IN COST ESTIMATE
Assumptions
240 tons of emissions are controlled by incineration with
primary and secondary heat recovery; 3,120 tons by carbon
adsorption with recovered solvent credited at fuel prices.
25 percent LEL is equal to 4,250 ppm of methyl ethyl ketone by volume.
Air flow can be reduced to reach 25 percent LEL
The price of a 15,000 SCFM carbon adsorption system was
used as an average. No costs are added for distillation or
additional waste disposal. Incineration system costs were
taken directly from EPA-450/2-76-028.
3,360 tons of emissions are treated per year over an operating
period of 2,080 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.
-------
However, discussions with equipment manufacturers
and coaters and review of published information indicated
that these capital costs 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 could be 1.5 to 3
times higher because of various retrofit difficulties.
Therefore, assuming a 3 to 4 multiplier for capital
costs which includes an adjustment for inflationary increases
from mid-1975 to mid-1977, it is estimated that actual
capital costs in the five nonattainment counties are more
likely to range from $5.12 million to $6.82 million with
corresponding annualized costs of $.964 million to $1.33
million.
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 2,722
tons per year. This is based on a 90 percent capture and
90 percent destruction of emissions in an incinerator
(an overall reduction in emissions of 81 percent).
5-17
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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), state economic variables and capital investment.
5.5.1 RACT Timing
Current proposed guidelines for paper coating suggest
several compliance deadlines for alternative methods of
compliance. 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.
5-18
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5.5.2 Technical Feasibility Issues
Though low solvent or solventless materials are used
in many paper coating operations at present, many types
of solvent-based systems 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.
As discussed above, both incineration and carbon
adsorption are not completely satisfactory add-on control
systems. Incineration requires large volumes of additional
fuel if good heat recovery is not accomplished; carbon
adsorption is not usable on many coating systems because
of the multiplicity of compounds used in solvent mixtures.
5.5.3 Comparison of Direct Cost with Selected Direct
Economic Indicators
The net increase in annualized costs to coaters was
estimated at $.964 million to $1.33 million. These additional
costs are projected to represent 0.7 to 1.3 percent of
the total annual value of shipments of the five firms
coating paper in South Carolina and 2.1 to 3.9 percent of
the shipments of the three firms directly impacted by
the proposed regulations. Assuming a "direct passthrough"
of these costs, prices at the three firms can be expected to
increase by 2.1 to 3.9 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.
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
5-19
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annualized costs. For most companies, these costs
would exceed their current level of capital expenditures
for plant improvement and expansion. A large pressure-
sensitive paper coater in another state, for instance,
has estimated that a capital investment of about $2 million
would be needed to meet proposed guidelines. His current
annual capital expenditure program is normally in the range
of SI.5 million.
Another typical case is an out-of-state firm which
manufactures various types of recording paper. Although
with additional development, some of its coating solutions
could be replaced with low solvent or waterborne ones,
incineration or carbon adsorption would be the only method
of complying with the regulation as now proposed. Based
on projected costs for either of these add-on control
systems, the firm is seriously considering terminating or
moving operations. Similar financial difficulties are
foreseen for marginally profitable firms which have limited
capital access or for which the added annual costs of
compliance are prohibitive.
5.5.4 Selected Secondary Economic Impacts
This section discusses the secondary impact of
implementing RACT on employment, market structure and
productivity.
Employment is not expected to be affected. Employment
would be reduced if marginally profitable facilities closed,
but the present indication from the industry is that plant
closures will not occur.
No significant effect on overall productivity is
foreseen, except for a small change resulting from the
need for add-on control system operating and maintenance
personnel. 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 240 tons of affected
emissions would be controlled by installation of direct
fire incinerators with primary heat recovery (at 35 percent
effeciency) and 3,120 tons by carbon adsorption, energy con
5-20
-------
sumption is expected to increase by an amount equal to
approximately 8,000 barrels of oil annually. This is
equivalent to approximately 64 million cubic feet of natural
gas annually. The estimate is based further on the assumption
that oven exhausts are about 300°F, that about 8 pounds of
steam are used per pound of solvent recovered and that a barrel
of oil is equivalent to 6.0 x 10 BTUs. This increased
requirement is considered to be negligible compared to current
state consumption.
* "k "k A
Exhibit 5-8 summarizes the conclusions reached in
this study and the implications of the estimated costs of
compliance for paper coaters.
5-21
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EXHBIT 5-8(1)
U.S. Environmental Protection Agencv
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR PAPER COATERS IN
THE STATE OF SOUTH CAROLINA
(NONATTAINMENT COUNTIES)
Current Situation
Number of potentially affected facilities
Discussion
Three plants in the state's non-attainment
areas 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.
Indication of relative importance of the
industrial sector to the state economy
Current industry technology trends
1977 VOC emissions (actual)
The 1977 value of shipments of these three
plants is estimated to be about $34 to
$45 million. They are estimated to employ
572 people.
Gravure coating replacing older systems.
Approximately 4,240 tons per year were
identified from three plants affected. Of
these 3,360 tons per year are applicable
under RACT.
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
Though low solvent use is increasing,
progress is slow. Add-on control systems
will probably be used.
Thermal incineration with primary heat
recovery and carbon adsorption.
Discussion
Estimated to be $5.1 million to $6.8 million
depending on retrofit situations. This is
likely to be more than 100 percent of normal
expenditures for the affected paper coaters.
$1.0 million to $1.3 million annually.
This represents 2.1 to 3.9 percent of the
value of shipments for the three firms
directly affected.
Assuming a "direct cost pass-through"— 2.1
to 3.9 percent at the three affected firms.
-------
Affected Areas in Meeting RACT
Energy
Productivity
Employment
Market structure
RACT timing requirements (1981)
Problem areas
VOC emissions after control
Cost effectiveness of control
EXHIBIT 5-8(2)
U.S. Environmental Protection Agency
Discussion
Assuming 35 percent heat recovery from
the incineration system, annual energy
requirements are expected to increase by
approximately 8,000 equivalent barrels
of oil.
No major impact.
No major impact.
No major impact.
RACT guideline needs clear definition for
enforcement.
Equipment deliverables and installation of
incineration systems prior to 1981 are
expected to present problems. Development
of low solvent systems is likely to extend
beyond 1981.
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 1,520 tons/year (36 percent
of 1977 VOC emission level from three
affected plants).
$396 - $514 annualized cost/annual ton
of VOC reduction.
Source: Booz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
T. W. , Hughes, et al., Source Assessment: Prioritization
of Air Pollution from Industrial Surface Coating Operations,
Monsanto Research Corporation, Dayton, Ohio. Prepared for
U.S. Environmental Protection Agency, Research Triangle Park,
N.C., under Contract No. 68-02-1320 (Tech. 14) Publication
No. 650/2-75-019a.
T. A. Kittleman and A. B. Akell, "The Cost of Controlling
Organic Emissions," Chemical Engineering Progress, April 197 8.
Springborn Laboratories, Air Pollution Control Engineering and
Cost Study of General Surface Coating Industry, Second Interim
Report. EPA Contract No. 68-0202075, August 23, 1977.
Davidson's Textile Blue Book, 1977.
Lockwoods' Directory of the Paper Industry, 1977.
Thomas Register of American Manufacturers, 1978.
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Existing Stationary Sources, Volume I.
EPA-450/2/76-028, May 1977.
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Existing Stationary Sources, Volume II.
EPA-450/2-77-008, May 1977.
U.S. Environmental Protection Agency, Regulatory Guidance for
Control of Volatile Organic Compounds Emissions from 15 Categories
of Stationary Sources, EPA-950/2-78-001, April 1978.
U.S. Department of Commerce, Annual Survey of Manufactures, 1976.
U.S. Department of Commerce, County Business Patterns, 19 76.
U.S. Department of Commerce, Census of Manufactures, 1972.
Private conversations with:
A. R. Moore and Dr. Sereal of Anchor Continental
George Dusty of Bird & Son, Inc.
Robert Gregory of Bowater Carolina Corporation
Robert Van Amberg of Davol
Mr. Baldwin of Westvaco
-------
6.0 THE ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR PLANTS SURFACE COATING
FABRICS IN THE NONATTAINMENT AREAS
FOR OZONE IN THE STATE OF SOUTH
CAROLINA
-------
6.0 THE ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR PLANTS SURFACE COATING
FABRICS IN THE NONATTAINMENT AREAS
FOR OZONE IN THE STATE OF SOUTH
CAROLINA
This chapter presents a detailed analysis of the
impact of implementing RACT for plants in the non-
attainment areas of the State of South Carolina which are
engaged in the surface coating of fabrics and vinyls.
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 pro-
perties), 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.
6-1
-------
6.1
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 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
South Carolina Directory of Manufacturers
Membership list of the Canvas Products Association.
A list of establishments expected to be affected by
the proposed fabric coating RACT regulations in the state
was prepared and cross checked with a list of potentially
affected firms supplied by the State Bureau of Air Quality
Control. Approximately fifteen firms were interviewed by
telephone and three firms were identified which have
fabric coating operations. These firms were further
interviewed by telephone by the study team to verify
their emissions and type of coating operations. Only two
firms which are identified in Section 6.2 were found to
be affected by the proposed regulations. The other firm,
Uniroyal, Inc., had potential emissions sufficiently low
not to be affected.
6.1.2 VOC Emissions
The South Carolina Bureau of Air Quality Control's
emission inventory 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. These are believed to represent
90 percent or more of the emissions in this RACT category.
Emissions from fabric coating plants not identifed in the
non-attainment areas, if they exist, are expected to be small
and negligible.
6-3
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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.
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, Sprmgborn Laboratories.
Additional cost data were supplied by equipment and material
suppliers and published literature sources. Major coaters in
6-4
-------
South Carolina, 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.
6.1.6 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
Study Outputs
Industry statistics
Emissions3
Cost of emissions control
Economic impact
Overall quality of data
A
Hard Data
X
X
X
X
X
B C
Extrapolated Estimated
Data Data
Emission data obtained from South Carolina state emission
inventory and from data supplied by the potentially affected
manufacturers.
Source: Booz, Allen & Hamilton Inc.
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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 38 plants in SIC categories in
which plants coating fabrics in the non-attainment counties
in South Carolina 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 a review of industrial directories and other
published information, only three plants were found in
which fabric coating, as defined in the proposed "fabric
coating" regulation, is being used. Two of these are
likely to be affected by the proposed regulations and are
listed in Exhibit 6-3, following Exhibit 6-2.*
As shown, these two affected firms are estimated to
employ a total of about 100 people in the fabric coating
operations. The total annual value of shipments of the
two firms is estimated at $7.1 million based on an average
of $71,000 per employee, which is characteristic of firms
in SIC 2295, fabric coating.
6.2.2 Comparison of the Industry to the State Economy
A comparison of the value of shipments of these
plants with the state economy indicates that these plants
represent a small percentage of the total value of shipments
by manufacturing plants and employ about 0.2 percent of
the manufacturing workers in the non-attainment counties.
6.2.3 Historical and Future Patterns of the Industry
The fabric coating industry in the U.S., except for
the general economic slump in 1975, has shown a gradual
but steady growth in sales and shipments over the last
The third firm has a very small fabric coating operation
that employs only two persons.
6-6
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EXHIBIT 6-2
U.S. Environmental Protection Agency
INDUSTRY STATISTICS FOR PLANTS IN SIC CATEGORIES
WHERE FABRIC COATING MAY BE USED IN SOUTH CAROLINA
SIC Name
2211 Broad woven fabrics mills, cotton
2221 Broad woven fabric mills, man-made and silk
2241 Narrow fabrics and other, small wares mills
2258 Warp knit fabric mills
2261 Finishers of broad woven fabrics of cotton
2262 Finishers of broad woven fabrics of man-
made fiber and silk
2269 Finishers of textiles, n.e.c.
2295 Coated fabrics, not rubberized
2297 Nonwoven fabrics
3069 Fabricated rubber products, n.e.c.
3079 M iscellaneous plastics products
3291 Abrasive products
3293 Gaskets, packing, sealing devices
Number
of
F i rms
11
8
6
4
1
1
1
4
10
38
Number
of
Employees
4,555
2,477
702
1,619
1,500
25
375
610
747
425
13,035
Estimated
Value of Shipments
($ M i11ion)
160
93
23
54
90
2
23
26
31
16
515
Estimated
New Expendi tures
($Mi.l 1 i on)
5.3
3.9
0.4
1.6
3.4
0.04
1.4
1
1.8
0.6
19.5
Several firms listed under more than one SIC code.
Source: 1976 Annual Survey of Manufactures, U.S. Department of Commerce.
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Firm Location
Raybestos Manhattan, Inc. Charleston
Rock Hill Printing and Finishing Rock Hill
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 THE
NONATTAINMENT COUNTIES IN SOUTH
CAROLINA
Total Employees in
Employees Fabric Coating
850 65
3,000 35
Activi ty
Rubber Products,
Rubber Coating
Various Coated Fabrics,
Cotton and Synthetics
Finishing
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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
which increased by $215.5 million in shipments from 1972
to 1976, compared with an increase of $301 million for
all coated fabrics. Pyroxylin (cellulose nitrate) coatings,
because of their low cost and ease of application, still
continue to occupy a steady though proportionately smaller
share of the market. Natural and artificial rubber coated
fabrics, because of unique properties not obtainable with
plastic materials, also maintain a substantial (about 10
percent) share of the coated fabric market. Vinyl and
urethane coatings, however, are replacing a larger share
of both markets.
6-7
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EXHIBIT 6-4
U.S. Environmental Protection Agency
U.S. ANNUAL VALUE OF SHIPMENTS OF COATED FABRICS
($ 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
(13. 6jia
83.5
681.5
28 .0
681. 5
202.7
<1.4£a
72.0
817 .4
32 . 5
817.4
213.8
(33 . 8ji
80.0
TOTAL
876.5
1,011.9
1,156.5
985.6
1,177.5
Notes:
a.Values obtained by difference from gross shipments of all coted 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*3
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
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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
two 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
Estimated
Potential Emissions
(8736 hrs/yr)
700 tpy
435 tpy
Source: Booz, Allen & Hamilton Inc.
Estimated
Actual Emissions
Firm Location (2000 hrs/yr)
Raybestos-Manhattan, Inc. Charleston 160 tpy
Rock Hill Printing and Finishing Rock Hill 100 tpy
-------
The total estimated VOC emissions from fabric coating
lines in these plants were 260 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.
6.4.2 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.
6-10
-------
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.
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.
6-11
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6.4.3 Carbon Adsorption
Carbon adsorption has been used since the 1930s for
collecting solvents emitted from 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
technigues. 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 South Carolina 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. Lowe;r
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 two
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 the
assumption of an easily retrofitted system. In specific
situations, some coaters have found actual installed
costs to be three to five times those summarized in
Exhibit 6-7.
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 260 tons per year for the two potentially
affected firms. The firms are likely to select an incinera
tion method of compliance with the proposed regulations.
6-13
-------
EXHIBIT 6-7
U.S. Environmental Protection Agency
INCINERATION COSTS FOR A TYPICAL FABRIC
COATING LINE3
Incineration Device
Installed Cost
($)
Annualized Cost
($/yr.)
Control Cos
tb'(
($/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 South Carolina plants are expected to require installation of incinerators
for air flows from 2,300 to 4,000 SCFM. Use of smaller sized incinerators
results in a higher $/ton control costs.
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
260 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 one firm was obtained by
interviewing plant personnel and was adjusted to reflect
25 percent of LEL. The air flow rate for the other
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 $274,000 with
annualized costs of $75,000, of which $68,000 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 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 could be 1.5 to 3
times higher because of various retrofit difficulties.
Therefore, using multipliers of three and four it is
estimated that actual capital costs in the non-attainment
areas are more likely to range from $0.8 million to $1.1 million
with corresponding annualized costs of $210,000 to $280,000.
The capital costs for each of the two affected firms
would be approximately equal, and are estimated to vary from
$400,000 for a multiplier of 3 to $500,000 for a multiplier
of 4. The corresponding annualized costs would vary from
$105,000 for a multiplier of 3 to $140,000 for a multiplier
of 4. These costs are higher than those shown in Exhibit
6-7 because the affected plants have higher flow rates
than that of the typical plant in Exhibit 6-7.
6-14
-------
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 210
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 two directly impacted firms).
6-15
-------
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
South Carolina suggest three sets of compliance deadlines
for alternative methods of compliance. For add-on
systems, they call for installation of equipment and
demonstration by May 1, 1981; for low solvent systems, by
June 1, 1981 or December 1, 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. A major paper 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
As discussed above, low solvent or solventless
materials are used in many coating operations. At present,
however, many types of solvent-based systems have no
satisfactory replacement. The alternative materials do
not meet the product quality standards demanded by the
coaters. Additional development is needed and will
require the combined efforts of both the coaters (who
must maintain product quality) and the coating material
suppliers. Ideally, the new coating materials should be
adaptable to existing coating equipment to minimize
additional capital investment.
As discussed above, 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 was estimated at $210,000 to $280,000. These
additional costs are projected to represent 2.9 percent
to 3.9 percent of the total annual value of shipments of
the two firms affected by the proposed regulations.
Assuming a "direct passthrough" of these costs, prices
can be expected to increase by about the same fraction.
Such price increases would likely make these firms less
competitive with firms not affected by similar regulations
elsewhere.
The major economic impact in terms of cost to individual
companies will probably be capital related rather than
due to increased annual operating costs. Although the
capital expenditure of $400,000 to $500,000 is significant,
neither of the two potentially affected firms indicated
it would consider closing that portion of its operations.
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 nonattainment counties is not
expected to be significantly affected since only about 100
workers are employed in coating operations in the two 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 1,070 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 BTUs. 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
-------
EXHI3IT 6-9(1)
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR FABRIC GOATERS IN
THE STATE OF SOUTH CAROLINA
(NONATTAINMENT COUNTIES)
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
Annualized cost
Price
Energy
Productivity
Employment
Market structure
Discussion
Two plants in the state's non-attainment
areas are expected to be affected by these
regulations.
The 1977 value of shipments of these two
plants is estimated to be about $7.1 million.
They are estimated to employ 100 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
260 tons/year.
Direct fired incineration
Direct fired incineration with primary
heat recovery.
Discussion
Estimated to be $0.8 million to $1.1 million
depending on retrofit situations.
$210,000 to $280, 000 annually.
Assuming a "direct cost pass-through"—
3 to A percent.
Assuming 35 percent heat recovery, annual
energy requirements are expected to in-
crease by approximately 1,070 equivalent
barrels of oil.
No major impact.
No major impact.
No major impact.
-------
EXHIBIT b-yU)
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR FABRIC COATERS IN
THE STATE OF SOUTH CAROLINA
(NONATTAINMENT COUNTIES)
Affected Areas in Meeting RACT
RACT timing requirements (1981)
Problem areas
VOC emissions after RACT control
Cost effectiveness of RACT control
Discussion
RACT guideline needs clear definition
prior to enforcement.
Nationwide, equipment deliverables and
installation of incineration systems
prior to 1981 are expected to present
problems. Development of low solvent
systems is likely to extend beyond 1981.
Retrofit situations and installation costs
are highly variable.
Type and cost of control depend on particu-
lar solvent systems used and reduction in
air flow.
Approximately 50 tons/year (19 percent of
1977 VOC emissions level from affected
plants.
$1,004 to $1,327 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, South Carolina State
Development Board, Planning and Research Division, Industrial
Directory of South Carolina, 1978.
Thomas Register of American Manufacturers, 1978.
U.S. Department of Commerce, County Business Patterns.
U.S. Department of Commerce, Annual Survey of Manufactures,
1976, Industry Profiles, M76(AS)-7.
U.S. Department of Commerce, Annual Survey of Manufactures,
1976, Value of Product Shipments, M76(AS)-2.
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Existing Stationary Sources, Volume I,
EPA-450/2-77-009, May 1977.
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Existing Stationary Sources, Volume II,
EPA-450/2-77-008, May 1977.
U.S. Environmental Protection Agency, Regulatory Guidance for
Control of Volatile Organic Compounds Emissions from 15
Categories of Stationary Sources, EPA-950/2-78-001, April 1978.
Raybeston-Manhattan, Inc., Charleston, S.C.
Rock Hill Printing and Finishing, Rock Hill, S.C.
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11.0 THE ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR SOLVENT METAL DEGKEASING IN THE NON-
ATTAINMENT AREAS FOR OZONE IN THE STATE
OF SOUTH CAROLINA
-------
11.0 THE ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR SOLVENT METAL DEGREASING IN THE NON-
ATTAINMENT AREAS FOR OZONE IN THE STATE
OF SOUTH CAROLINA!
This chapter summarizes the estimated economic impact
of the implementation of reasonably available control
technology for volatile organic compound emissions from
solvent metal degreasers in urban areas that are designated as
non-attainment in South Carolina. Solvent metal degreasing
is the process of cleaning the surfaces of articles to
remove oil, dirt, grease and other foreign material by
immersing the article in a vaporized or liquid organic
solvent. The chapter is divided into five sections:
Specific methodology
Industry statistics
Estimated costs of RACT implementation
Direct economic impacts
Selected secondary economic impacts.
Each section presents detailed data and findings
based on analysis of the RACT guidelines; previous studies
of metal degreasing; interviews with degreaser users and
equipment and material suppliers; and a review of pertinent
published literature.
The economic impact of RACT guidelines in the State of South
'ja.:iina is examined for urban non-attainment counties only,
•'•'men include Charleston, Lexington, Richland and Berkley.
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
Subsequent estimation of the economic impact of imple-
menting the proposed RACT for solvent metal cleaning is
based upon a determination of the number of solvent metal
cleaners in the state. This determination was made on the
basis of a detailed industrywide study of metal degreasing
in the U.S., conducted by the Dow Chemical Company under
contract to the EPA. The results of the study are reported
in: Study to Support New Source Performance Standards for
Solvent Metal Cleaning Operations, Contract No. 68-02-1329,
June 30, 1976.
11-4
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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 four urban non-attainment areas,
first the number of plants with more than 19 employees in
each of the eight SIC groups was determined. The average
number of plants using solvent metal degreasing and the
average number and type of cleaners used per plant were
then obtained by using the factors presented in the Dow
report. The results of these calculations and the factors
used are tabulated in Exhibit 11-1, in section 11.2. The
total number of open top degreasers was then estimated by
multiplying the number expected to be used in the eight
metal working SIC groups by the ratio of 22,200/15,200 (the
ratio of total open top units in the U.S. to those used in
the eight SIC groups in the U.S.).
Because of their expense and function, conveyorized
vapor degreasing units are most likely to be used in
Interviews with Parker Johnson, Vice President, Sales, Baron-
Blakeslee Corp., Cicero, Illinois and with Richard Clement,
Sales Manager, Detrex Chemical, Detroit, Michigan, July 1978.
11-5
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manufacturing only. Therefore, the total number of these
units in the four urban non-attainment 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 multi-
plying the number of vapor conveyorized cleaners by 100/85,
the EPAl estimated ratio of total conveyorized cleaners
to vapor conveyorized cleaners in the U.S.
The number of cold cleaners in the four urban non-
attainment 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 manu-
facturing use and 910,000 in maintenance or service use.2
Then:
The EPA estimates of all cold cleaners in manu-
facturing use in the U.S. were multiplied by
the ratio of the number of plants in the metal
working industries (SICs 25 and 33-39) in the
non-attainment counties to the number in the U.S.
The EPA estimates of all cold cleaners in main-
tenance and service use in the U.S. were multi-
plied by the ratio of the number of plants in
the metal working industries plus selected ser-
vice industries (SIC codes 551, 554, 557, 7538,
7539, 7964) for the affected areas to the number
in the U.S. These service industries are expected
to have at least one or more cold cleaners.
SIC 551 applies to industries categorized
as new or used car dealers.
SIC 554 applies to industries categorized
as gasoline service stations.
SIC 557 applies to industries categorized
as motorcycle dealers.
Control of Volatile Organic Emissions from Solvent Metal Cleaning,
EPA-450/2-77-022, November 1977.
Cold cleaners in manufacturing use are meant to include only
those cleaners employed in the manufacturing process; cold
cleaners in maintenance and service use are those employed for
this purpose by either manufacturing or service establishments.
11-6
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SIC 7538 applies to industries categorized
as general automotive repair shops.
SIC 7539 applies to industries categorized
as automotive repair shops, n.e.c.
SIC 7964 applies to industries categorized
as armature rewinding shops.
The estimates of the total number of cold cleaners in
the affected state obtained by these calculations are tabu-
lated in Exhibit 11-2, following Exhibit 11-1.
11.1.3 Method of Estimation of Affected Deqreasers
The RACT guidelines propose several exemptions for de-
greasers based on size, type of solvent used or emission
rate.
The RACT guidelines apply to cleaners with
emissions over 15 pounds in any one day or 3
pounds in any one hour whichever is greater. It
has been estimated1 that about 70 percent of
cold cleaners would have VOC emissions less than
this and would not be affected.
Cleaners used exclusively for chemical or physical
analysis or determination of product quality and
acceptance are to be exempt. Since few such
cleaners exist, no correction was made to the
estimated number of cleaners used in determining
the estimated compliance costs.
Those cleaners using 1,1,1 trichloroethane and tri-
chlorotrifluoroethane are to be exempt. Estimates
of the number of open top degreasers which use
either of these solvents range from 35 percent
to 60 percent.2 For the purpose of calculating
Interview with Safety-Kleen Co., Gray-Mills Co. and Kleer-Flo Co.
personnel; these firms are manufacturers of cold solvent metal
degreasing equipment.
Based on information in EPA 450/2-77-022, op. cit., and inter-
views with Baron-Blakeslee and Detrex Chemical personnel.
11-7
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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 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.
11-8
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The resulting estimate of the total number of degreasers
in the state and those exempt from the proposed regulations
by size and solvent composition are summarized in Exhibit
11-3, in section 11.2.
11.1.4 Method of Estimation of Number and Type of Retro-
fitted Controls Needed
The proposed regulations specify certain controls which
can be retrofitted to existing solvent metal cleaners.
These are discussed in detail in a later section of this
chapter. Briefly they are:
For affected cold cleaners
A cover must be installed when the solvent
used has a volatility greater than 15 milli-
meters of mercury at 38°C, or is agitated,
or the solvent is heated; and
An internal drainage facility (or, where
that is not possible, an external closed
drainage facility) must be installed, such
that the cleaned parts drain while covered
when the solvent used has a volatility greater
than 32 millimeters of mercury at 38°C; and
Where the solvent has a volatility greater
than 32 millimeters of mercury at 38°C, a
freeboard must be installed that gives a
freeboard ratio (i.e., distance from cleaner
top to solvent surface divided by cleaner
width) greater than or equal to 0.7; or a
water cover where the solvent is heavier and
immiscible or unreactive with water; or some
other system of equivalent control.
For affected open top vapor degreasers—
The vapor degreaser must be equipped with
a cover; and
A spray safety switch must be installed
which shuts off the spray pump when the
vapor level drops more than 4 inches; and
11-9
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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.
11-10
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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 MetaT~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:
Capital costs for safety switches, minimizing
conveyorized cleaner openings, and downtime cover
capital costs were estimated on the basis of
discussions with equipment 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.
1 EPA-450/2-77-022
11-11
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Annual capital charges were estimated as 25 percent
of capital costs, to include depreciation, interest,
maintenance, insurance and administrative costs.
Labor costs for mounting downtime covers on con-
veyorized cleaners at shift end were estimated at
$1,500 per year per cleaner.
Additional costs which might result from decreased
productivity, labeling and other requirements of
the proposed regulations were assumed to be small
and negligible.
11-12
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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 the four urban non-attainment counties
in South Carolina. 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 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 judgment. Exhibit 11-1A,
on the following page, rates each study output and overall
quality of the data.
11-13
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EXHIBIT 11-1A
U.S. Environmental Protection Agency
DATA QUALITY
ABC
"Hard "Extrapolated "Estimated
Study Outputs Data" Data" Data"
Industry statistics X
Emissions X
Cost of emissions X X
control
Statewide costs of
emissions
Overall quality of X
data
Source: Booz, Allen & Hamilton Inc.
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11.2 INDUSTRY STATISTICS
This section summarizes an estimation of the total
number of solvent metal cleaners affected in the state
determined by the methods discussed in section 11.1.2 of
this report. These estimates include only the four urban
non-attainment areas of South Carolina. As shown in
Exhibits 11-1 and 11-2, on the following pages, a total
of 25 open top vapor degreasers, 5 conveyorized degreasers
and 2,723 cold cleaners are estimated to be in use in the urban
non-attainment areas in manufacturing, maintenance or service.
As discussed earlier, not all of these will be sucject
to RACT regulations because of size or solvent exemptions.
About 30 percent of open top vapor degreasers, 5 percent
of conveyorized degreasers and 70 percent of cold cleaners
are expected to be exempt on the basis of size. About
35 percent of open top vapor degreasers, 10 percent of
conveyorized degreasers and 20 percent of cold cleaners
are expected to be exempt because they use exempt solvents
1,1,1-Trichloroethane or Freon 113. Applying these factors
results in the total of affected cleaners shown in Exhibit 11-3,
following Exhibit 11-2.
It is difficult to estimate the number of 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 industries as
automotive, electronics, 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.
11-14
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25 33 34
Metal Primary Fabricated
Item Furni ture Metals Products
Number of South
Carolina plants
with more than
19 employees3 3 5 23
Percent of U.S.
plants using sol-
vent degreasingb 46 40 42
Percent of South
Carolina plants
using solvent
degreasing 44 38 40
Number of South
Carolina plants
using solvent
degreasing 12 9
Percent of U.S.
plants using vapor
degreasing 48 42 41
Percent of South
Carolina plants
using vapor
degreasing 40 35 34
Number of South
Carolina plants
using vapor
degreasing 0 13
Average number of
vapor degreasers
per U.S.
plant 1.98 2.21 1.62
Average number of
vapor degreasers
per South Carolina
plant 1.76 1.96 1.44
Number of vapor de-
greasers in South
Carolina 0 2 4
Percent in U.S. as
open top de-
greasers 73 79 79
EXHIBIT 11-1 (1)
U.S. Environmental Protection Agency
ESTIMATED NUMBER OF VAPOR DEGREASERS
IN SOUTH CA ROf, I N A°
(Four Urban Non-Attainment Counties)
SIC GROUP
35 36 37 38 39
Nonelectri- Electrical Transptn. Instruments Misc.
cal Machinery Equipment Equipment and Clocks Industry Total
16
13
70
52
55
50
65
39
50
53
48
62
37
31
33
67
43
62
56
27 55 36 51 46
1 1
1.61 2.03 3.25 2.27 1.02
1.43 1.80 2.88 2.01 0.90
21
31
87
87
94
-------
EXHIBIT 1l-l (2)
U.S. Environmental Protection Agency
(South Carolina)
SIC GROUP
I tem
Percent in South
Carolina as open
top degreasers
25
Meta 1
Furni ture
67
33
Primary
Metals
34
Fabricated
P roducts
72
35 36 37
Monelectri- Electrical Transptn.
cal Machinery Equipment Equipment
80
38 39
Instruments Misc.
and Clocks Industry
86
82
Tota 1
Number of open top
vapor degreasers
in South Carolina
0
17°
Number of conveyor-
ized vapor degreasers
in South Carolina 0
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EXHIBIT 11-2
U.S. Environmental Protection Agency
ESTIMATED NUMBER OF COLD
CLEANERS IN SOUTH CAROLINA
(Four Urban Non-Attainment Counties)
U.S. South Carolina
Total number of plants in SIC Groups
25,33,34,35,36,37,38,39a 125,271 165
Estimated number of cold cleaners in
manufacturing13 390,000 514
Total number of plants in service
industries SIC 551,554,557,7538,7539,7964a 227,350 691
Estimated number of cold cleaners
in maintenance and service useb-c 910,000 2,209
Estimated total number of cold cleaners3 1,300,000 2,723
Notes:
a. Source: 1976 County Business Patterns, U.S. Department of Commerce, 1976.
b. Source: Control of Volatile Organic Emissions From Solvent Metal Cleaning, EPA-450/2-77-022,
November 1977.
c. This includes cold cleaners in maintenance and service applications in both manufacturing
and repair firms.
Source: Booz, Allen & Hamilton Inc.
-------
Exemption Cold
Total number of 2,723
cleaners
Number exempt by 1,9 06
size
Number affected 817
by size
Number further 16 3
exempted by type
of solvent used
Total- number of 6 54
affected cleaners
EXHIBIT 11-3
U.S. Environmental Protection Agency
ESTIMATE OF AFFECTED SOLVENT METAL
CLEANERS IN SOUTH CAROLINA
(Four Urban Non-Attainment Counties)
Number of Cleaners by Tvpe
Open Top Vapor
25
8
17
6
11
Conveyorized
5
Source: Booz, Allen & Hamilton Inc.
-------
As shown in Exhibit 11-1, 31 establishments in the
SIC codes 25 and 33-39, with more than 19 employees, are
estimated to use solvent metal degreasing. However, as
shown in Exhibit 11-2, following Exhibit 11-1, there are
a total of 165 plants in SIC groups 25 and 33-39 and an
additional 691 plants in service industries; all of these
are expected to have some type of solvent degreasers and
could be potentially affected.
11-15
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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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SXHI3I7 11-4
U.S. Environmental Protection Agency
CONTROL SYSTEMS FOR COLD CLEANING*
Control Svstsn A
Control Equipment:
1. Cover
2. Facility for drair.mg cleaned parrs
3. remanent, conspicuous lacel, summarizing tne operating requirements
Operatma Requirwnents;
1. Do not dispose of waste solvent or transfer it to ar.otner party, sucn as that greater tnan 20 percent
of tne waste (by weight) can evaporate ir.to tne atmcspnere.* Store waste solvent only ir. covered containers.
2. Close degreaser cover wnenever not handling parts m the cleaner.
3. Dram cleaned parts for at least 15 seconds or until dripping ceases.
Control System 3
Control Equipment:
1. Cover: Same as ir. System A, except if (a) solvent volatility is greater than 2 Kpa [lb mm Hg or 0.3 psi)
measured at 38®C (100*F),*# (b) solvent is agitated, or (c) solvent is neated, then tne cover must be designed so
that it can be easily operated witn one nand. (Covers for larger degreasers may require mecr.anical assistance, cy
spring loading, counterveighting or powered systems.)
2. Drainage facility: Same as in System A, except zr.at if solvent volatility is greater than about 4.3 Kpa
(32 ma Hg or 0.6 psi) measured at 38®C (100®r), then the drainage facility ziust be internal, sc that parts are
enclosed under the cover wrule draining. The drainage facility nay be external for applications wnere an internal
type cannot fit into the cleaning system.
3. label: Same as in System A
4. If used, the solvent spray must oe solid, fluid stream (net a fir.e, atomized or snower type spray;
and at a pressure wnich does not cause excessive splasr.mg.
5. Ma^or control device for highly volatile solvents.- If the solvent volatility is 4.3 Kpa (33 mm Hg or
0.6 psi) measured at 33 C (100 F) , or if solvent is neated about 50 C (120 7), then one of tne following control
devices must be used:
a. Freeboard that gives a freeboard ratio*** 0.7
b. Water cover (solvent must be insoluble in and neavier than water)
c. Other systems of equivalent control, such as refrigerated cniller or carbon absorption.
Operating Requirements:
Same as in System A
* Mater and solid waste regulations must also be complied with
** Generally solvents consisting primarily of mineral spirits (Stoddard) nave volatilities 2 Kpa.
*** Freeboard ratio is defined as the freeboard neignt divided by the width of the degreaser.
Source: 2PA-450/2-77-022, op. cit.
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EXHIBIT 11-5(1)
U.S. Environmental Protection Agency
EPA PROPOSED CONTROL SYSTEMS FOR OPEN TOP VAPOR DEGREASEUS
Control System A
Control Equipment:
1. Cover that can be opened and closed easily without disturbing the vapor zone.
Operating Requirements:
1. Keep cover closed at all times except when processing work loads through the degreaser,
2„ Minimize solvent catry-out by the following measures:
do Rack parts to allow full drainage..
b. Move parts in and out of the degreaser at less than 3 3 m/seu (11 ft/min) .
c„ Degiease 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 decjreaser' 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.
G. Never spray above the vapor level.
7. Repair solvent leaks immediately, or shut down the degreaser.
0. Do not dispose of waste solvent or tiansfer it lo another parly such that greater than 20 percent of the
waste (by weight) will evaporate into the atmosphere. Store wjsLe solvent only in closed containers.
-» 'j t
9„ Exhaust ventilation should not exceed 20 m /min per n»~ (65 cfin per ft ) of decjreaser open area, unless
necessary to moet Oi'MA requirements. Ventilation fans should not be near the degreaser opening.
10* Water should not be visually detect.able in solvent exiting the water separator..
Control System B
Control Equipment:
Jo Cover (saine as in system A) 0
2. Safety switches
Condenser flow switch and thermostat - (shuts off turnip heaL if condenser coolant is either nut circulating
or too warm).
I)„ Spray safety switch — shuts off spray pump if the vapor level drops excessively, about 10 cm (4 in).
-------
EXHIBIT ]1-5 (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 ml/inin 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 het ter than
any of the above.
4. Permanent, conspicuous label, summarizing operating piocedures #1 to OG.
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 DEGRRASERS
Control System A
Control Equipment: None
Operating Requirements:
1. Exhaust ventilation should not exceed 20 mVmin per m2 (65 cfm pur ft2) of degreaser opening,
unless necessary to meet OSIIA 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 verticlc conveyor speed at 3.3 m/niin (11 ft/min).
3. Do not dispose of waste solvent or transfer it to another party such that greater than 20 |»ercent
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 D
1. Major control devices? the degreaser must bo controlled by cither:
a. Refrigerated chiller,
b. Carbon adsorption system, with ventilation 15 m2/min per m2 (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 al>ove.
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 Lherntostat - (shuts off sump heat when vapor level rises Loo high).
4. Minimized openings: Entrances and exiLs should silhouette work loads so that the average clearance (between
parts and the edge of the degreaser opening) is either 10 cin (4 in.) or 10 percent of the width of the opening.
5. l>owu-Lime covers: Covers bhould be provided for closing off the entrance and f-xit during shutdown hours.
Derating Requirements:
1. to 5. Same a3 the System A
6. Down-time covet must be placed over entrances jnd exits of eonveyori zai degieasers iinmed-UiLnly after the
conveyoi and exhaust are shut down and reinoved ]usL before they are started up.
l)Oui <:c : EI'A-<1r>0/2-'/7-0^..>, op. clt.
-------
system A for an average cold cleaner because the additional
devices required in system B generally control only bath
evaporation, about 20 to 30 percent of the total emission
from an average cold cleaner. For cold cleaners with high
volatility solvents, bath evaporation may contribute about
50 percent of the total emission; EPA estimates that system
B could achieve 69 (± 20) percent control efficiency, whereas
system A might achieve only 55 (± 20) percent.
11.2.1.2 Open Top Vapor Degreasing Control Systems
The basic elements of a control system for open top
vapor degreasers are proper operating practices and use
of control equipment. There are about ten main operating
practices. The control equipment includes a cover, safety
switches and a major control device, either high freeboard,
refrigerated chiller, enclosed design or carbon adsorption
as outlined in Exhibit 11-5.
A vapor level thermostat is not included because it
is already required by OSHA on "open surface vapor de-
greasing tanks." Sump thermostats and solvent level controls
are used primarily to prevent solvent degradation and pro-
tect the equipment and thus are also not included here.
The emission reduction by these controls is a secondary
effect in any event. The two safety switches serve pri-
marily to reduce vapor solvent emissions.
EPA estimates that system A may reduce open top vapor
degreasing emissions by 45 (± 15) percent, and system B
by 60 (±15) percent. For an average-sized open top vapor
degreaser, systems A and B would reduce emissions from 9.5 m
tons/year down to about 5.0 and 3.8 m tons/year, respec-
tively. It is clear that system B is appreciably more effec-
tive than system A.
11.2.1.3 Conveyorized Degreasing Control Systems
Control devices tend to work most effectively on con-
veyorized degreasers, mainly because they are enclosed.
Since these control devices can usually result in solvent
savings, they often will net an annualized profit. Two
control systems for conveyorized degreasers as recommended
by EPA are in Exhibit 11-6. Control system A requires only
proper operating procedures which can be implemented, in
most cases, without large capital expenditures. Control
system B, on the other hand, requires a major control device.
11-17
-------
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
control efficiency, because collection systems are more
effective and inlet streams contain higher solvent concen-
trations 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
implementation of Type B method of controls on nonexempt
degreasers. 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,
emissions are expected to be reduced from about 1,330
short tons per year to a total of 980 short tons per year.
The major portion of these emissions, 770 tons, are from
solvent metal cleaners exempt from the proposed RACT
regulations either by size or by the nature of solvent
used. Implementation of the regulations is expected to reduce
emissions by 350 tons per year (1,330-980).
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 TYl^E B CONTROLS
/
Type of Degreaser Percent Emission
Reduction Expected
Cold cleaner, batch
Low volatility solvents
53
( +
20)
High volatility solvents
69
< +
20)
Open top vapor degreaser
60
( +
15)
Conveyorized degreaser
60
( +
15)
a. Does not include emissions from conveyorized-type cold cleaners
which represent about 15 percent of all conveyorized cleaners.
Source: EPA-450/2-77-022, op. cit.
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EXHIBIT 11-8
U.S. Environmental Protection Agency
ESTIMATED CURRENT AND REDUCED EMISSIONS FROM
SOLVENT Mr-'M'Ar, CI.EANTNG TN SOUTH f'AROr,TNA
(Four Urban Non-Attainment Counties)
Type of Cleaner
Open top vapor
Conveyorized
Cold
Total
Estimated
Current
Emissions
280
150
900
1, 330
Estimated
From Nonexempt
Cleaners After
RACT
50
50
110
210
Estimated
Emissions From
Exempt Cleaners
After RACTa
60
30
680
770
Estimated
Total
Emissions
After RACTa
110
80
790
980
a. Includes emissions from cleaners exempt by size or using 1,1,1-trichloroethane or Freon 113.
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 $0.23 million
in capital and about $0.03 million in net annualized costs.
The low net annualized costs result primarily from the
savings in solvent use which the regulations are expected to
provide.
In no case are the regulations expected to present a
severe financial burden to individual firms. The largest
single expenditure would be for retrofitting a monorail
conveyorized degreaser with chiller, switches, drying
tunnel, reduced openings and downtime covers. Total cost
for an average-sized degreaser of about 3.8 square meters
area (40.9 ft2) would be less than $12,500. A large unit,
14 square meters, would cost about $27,000 to $30,000.
Since these conveyorized systems would only be used in
large plants with large sales volumes, this implementation
cost is not expected to present a hardship to any par-
ticular firm.
11-19
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EXHIBIT 11-9
U.S. Environmental Protection Agency
CONTROL COSTS FOR COLD CLEANER
WITH 5.25 ft.2 AREA
Item
Low Volatility
Solvent^
High Volatility
Solvent^
Installed capital (?)
25.00
365.00
Direct operating costs ($/yr.)
1. 00
2.6
Capital related charges ($/yr.)
Solvent cost (credit) ($/yr.)
(4.80)
4. 30
(39.36)
91.25
Annualized cost (credit) ($/yr.)
0.50
54 .49
a. Coses 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.
-------
EXHI3IT 11-10
U.S. Environmental Protection Aoenc
CONTROL COSTS FOR AVERAGE-SIZED
OPEN TOP VAPOR AND COICVEYORI2ED CLZANE
1. CONTROL COSTS FOR TYPICAL SIZE OPEN TOP VAPOR DEGREASER
(Vapor to Air Area of 1.6 7 m2)
Manual Carbon Refrigerated Extended Freeboard
Control Technique Cover Adsorption3 Chiller & Powered Cover
Installed capital (S) 300 10,300 6,500 3,000
Direct operating 10 451 259 100
cost (?/yr.)
Capital related charoes
'(S/yr.) " 75 2 ,575 1,625 2,000
Solvent cost (credit) (860) (1,419) (1,290) (1,161)
(S/yr.)
Net annualized cost (775) 1,607 594 939
(credit) (S/yr.)
2. CONTROL COSTS FOR TYPICAL CONVEYORIZED DEGREASERS
(Vapor to Air Vapor Area of 3.8 m2)
Monorail Degreaser
Control Technique
Carbon^
Adsorber
Installed capital (4) 17,600
Direct operating 970
costs (S/yr.)
Capital related charges
(C/yr.)
Capital charges (S/yr.) 4,400
Solvent cost (credit) (5,633)
(S/yr.)
Annualized cost (credit) (263)
(S/yr.)
Rerrigeratec
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, 865
(2,258)
(59)
a. Not used in cost estimates since net annualized costs for carbon absorption
Jure the highest for any control method.
b. Capital changes 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 SOUTH CAROLINA
(Four Urban_Non-Attainment Counties)
1. CAPITAL COSTS
Number of Degreasers
Item Needing -Conversion Costs
Capital 445 $151,205
2. ANNUALIZED COSTS
Item Costs
Direct operating costs $ 1,104
Capital charges 37,301
Solvent cost (Savings) (16,374)
Net annualized costs $ 22,531
Source: Booz, Allen & Hamilton Inc.
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EXHIBIT 11-12
U.S. Environmental Protection Agency
ESTIMATED CONTROL COSTS FOR OPEN TOP
VAPOR DEC-LEASERS FOR THE STATE OF SOl'TF CAROLINA
(Four Urban Non-Attainment Counties)
1. CAPITAL COSTS
Item
Cost
Safety switches
$ 200
Powered covers
48 ,000
Manual covers
900
Total
$49,100
2. ANNUALIZED COSTS
Item Cost
Direct operating costs $ 630
Capital charges 12,175
Solvent cost (Savings) (9,546)
Net annualized costs $ 3,259
Source: Booz, Allen & Hamilton Inc.
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EXHIBIT 11-13
U.S. Environmental Protection Agency
ESTIMATED CONTROL COSTS FOR CONVEYORIZED
DEGREASERI-' FOR THE STATE OF SOUTF CAROLINA
(Four Urban Non-Attainment Counties)
1. CAPITAL COSTS
Item
Refrigerator chiller
Monorail degreasers
Crossrod degreasers
Safety switches
Drying tunnel
Reduce openings
Downtime covers
Total
Costs
$ 8,550
14,920
250
4 , 000
1,200
$ 28,920
2. ANNUALIZED COSTS
Item
Direct operating costs
Capital charges
Solvent cost (Savings)
Net annualized cost
Costs
$ 7,098
7, 230
(10,149)
$ 4,179
Source: Booz, Allen & Hamilton1 Inc.
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EXHIBIT 11-14
U.S. Environmental Protection Agency
ESTIMATED NUMBER OF COLD CLEANERS
NEEDING CONTROLS IN THE STATE
OF SOUTH CAROLINA
(Four Urban Non-Attainment Counties)
Type of Control
Drainage Facilitya
Freeboard and13
Drainage
Percent of
Cleaners Needing Control
5
63
Number of Cleaners0
Needing Control
33
412
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.
c. Numbers rounded to nearest 10 units.
Source: Booz, Allen & Hamilton Inc.
-------
IXHIBIT 11-15
U.S. Environmental Protection Agency
ESTIMATED NUMBER OF OPEN TOP VAPOR
DEGRZA3SRS NEEDING CONTROL IN THE
STATE OF SOUTH CAROLINA
(Four Urban Non-Attainment Counties)
Percent of Number of Cleaners
Type of Control Cleaners Needing Control
Needing Control
Manual covers
30
3
Safety switches
20
2
Powered cover
60
6
Source: Booz, Allen & Hamilton Inc.
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EXHIBIT 11-16
U.S. Environmental Protection Agency
ESTIMATED NUMBER OF CONVEYORIZED
DEGREASERS NEEDING CONTROLS
IN THE STATE OF SOUTH CAROLINA
(Four Urban Non-Attainment Counties)
Percent of Cleaners Number of Cleaners
Type of Control Needing Control Needing Control
Refrigerated chillers for
monorail and miscel-
laneous type cleaners3-
Refrigerated chillers for
crossrod type cleaners
Safety switches
Drying tunnel
Minimized openings
Downtime covers
36 1
54 2
20 1
10 0
90 4
90 4
a. Refrigerated chillers were estimated to be needed only on about
90 percent of all conveyorized vapor degreasers; thus, the percent
of units needed by monorail-miscellaneous and crossrod types add
only to 90 percent.
Source: Booz, Allen & Hamilton Inc.
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11.4 DIRECT ECONOMIC IMPLICATIONS
11.4.1 Time Required To Implement Proposed RACT Regulations
Because many degreasers are affected under the proposed
regulation (11 open top vapor degreasers, 4 conveyorized
degreasers and 614 cold cleaners in non-attainment areas alone)
and because each requires retrofitting of a control device,
some users may not be able to comply within proposed compli-
ance schedules because of equipment availability.
Discussions with personnel from the major manufacturers
of vapor and cold degreasers reveal that none are prepared
to provide the necessary controls in quantities to meet
a cumulative U.S.-wide demand. Some cleaners could be
converted to 1,1,1-trichloroethane and thus become exempt.
In fact, many metal solvent cleaners have been converted
to trichloroethane in the last few years in anticipation
of RACT regulations. However, not all existing machines
can be converted because of inadequate condensing sections
or improper materials of construction. Trichloroethane
can be extremely corrosive if stabilizers are insufficiently
replenished. In fact, stainless steel vapor degreasers
using 1,1,1-trichloroethane have been reported to fail
because of corrosion following the loss of stabilizer.
11.4.2 Effect of Compliance Upon Selected Economic Indicators
Implementation of the proposed regulations is expected
to have a negligible effect on South Carolina'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, South Carolina's estimated total capital
expenditures in non-attainment counties for SIC groups
25 and 33-39 exceed $33 million for 1976. Total capital
expenditures for retrofitting are estimated to be $0.23
million for all SIC groups in non-attainment counties,
less than one percent of total capital expenditures for
these counties.
Similarly implementation will have a negligible impact
on total shipments, prices and the state economy as a
whole. The total net annualized costs of the proposed
regulations ($0.03 million) are negligible compared to
the 1976 estimated total shipments of $3.5 billion in
SIC groups 25 and 33-39 for the non-attainment areas.
11-20
-------
Considering that these expenditures are spread over service
industries and other industries not included in SIC's 25
and 33-39, the overall economic impact is even less signif-
icant.
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 $0.04 million annually which
may result in a loss of employment for firms supplying metal
cleaning solvents.
11.4.3 Effect of Compliance Upon Energy Consumption
Carbon adsorbers, refrigerated chillers and distilla-
tion units are the principal energy consuming control de-
vices used for controlling degreasing emissions. The re-
frigerated chiller, which would probably be the preferred
method of control because of its low capital and operating
costs, will increase a degreaser's energy consumption by
about 5 percent. The EPA has estimated consumption of 0.2
kw to 2.2 kw by a chiller, used on a typical open top vapor
degreaser of 1.7m2 size.1 For a typical conveyorized de-
greaser of about 3.8m2 size, consumption is estimated, on
this basis, to be 0.5 kw to 5.0 kw. Only conveyorized de-
greasers are expected to use chillers to comply; and about
90 percent or 19 of these currently do not have chillers.
Assuming 2,250 hours per year operation, total additional
energy consumption annually would be about 21,300 kw-hours
to 213,000 kw-hours. This is equal to $852 to $8,520 per
year in additional power costs, at a cost of $0.04 per kw-
hour. Most of this cost is recovered by savings in solvent
use. A portion of the increase in energy consumption will
be offset by reduced production and consumption of solvents;
production because it takes energy to produce solvents and
consumption because there is embodied energy in feedstocks
such as petroleum distillates.
EPA-450/2-77-022, op. cit.
11-21
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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 affect on the current market structure of
the industries using solvent metal cleaning. Cleaners re-
quiring highest retrofitting costs (i.e., for conveyorized
cleaners) are generally owned by large firms. Smaller firms
would be expected to have only cold cleaners or open top
vapor degreasers. The highest capital costs would be for
an open top unit which would require an expenditure of
$8,000 or less to comply. This is not expected to be a
significant financial burden even to small-sized firms.
* * * *
Exhibit 11-17, on the following page, summarizes the
conclusions presented in this report.
11-22
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EXHIBIT 11-17
U.S. Environmental Protection Aoencv
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR SOLVENT METAL DEGREASING
IN THE STATE OF SOUTH CAROLINA
(Non-Attainment Counties)
Current Situation
Discussion
Number of potentially affected
facilities
Indication of relative importance
of industrial section to state
economy
Current industry technology
trends
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of VOC control
meet RACT guidelines
About 700 plants in the four urban non-
attainment counties
Value of shipments of firms in SIC groups
affected for non-attainment counties is
approximately SO.7 billion, about 20% of
the county totals for these SIC groups
Where technically feasible, firms are sub-
stituting exempt solvents
1,320 tons/year
Substitution. Otherwise lowest cost option
as specified by EPA will be used
Equipment modifications as specified by the
RACT guidelines
Affected Areas in Meeting Ract
Capital investment
Annualized cost
Price
Energy
Productivity
Employment
Market structure
RACT timing requirements (1981)
Problem areas
VOC emission after RACT control
Cost-effectiveness of RACT control
Discussion
$0.23 million
SO.03 million (less than 0.01 percent
of the value of shipments of the
effected firms)
Metal cleaning is only a fraction of
manufacturing costs; price effect
expected to be less than 0.01 percent
assuming a "direct cost passthrough"
Approximately 35 equivalent barrels
of oil per year increase
5-10 percent decrease for manually
operated degreasers. Will not effect
conveyorized cleaners
No effect except a possible slight
decrease in firms supplying metal
degreasing solvents
No change
Equipment availability—only a few
companies now supply the recommended
control modifications
No significant problem areas seen
980 tons/year (74 percent of 1977 VOC
emission level—however, this does not
include emission controls for exempt
solvents)
S87 annualized cost per ton of emissions
reduced
Source: 3ooz, Allen & Hamilton Inc.
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BIBLIOGRAPHY
U.S. Department: of Commerce, County 3usiness Patterns,1976.
U.S. Department of Commerce, Census of Manufactures, 1972
U.S. Environmental Protection Agency, Control of Volatile
Orcanic Emissions from Solvent Metal Cleaning EPA-450/2-77-002,
November 197 7.
U.S. Environmental Protection Agency, Regulatory Guidance
for Control of Volatile Organic Emissions from 15 Categories
of Stationary Sources. EPA-905/2-78-001, April 1978.
Dow Chemical Company, Study to Support New Source Performance
Standards for Solvent Metal Cleaning Operations. EPA Contract
68-02-1329, June 30, 1976.
Private conversations with the following:
Dextrex Chemical Company, Detroit, Michigan
Ethyl Corporation
DuPont
Dow Chemical Company
PPG
Allied Chemical Company
R.R. Street
Baron Blakeslee Corporation, Cicero, Illinois
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13.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
TANK TRUCK GASOLINE
LOADING TERMINALS IN
THE NONATTAINMENT AREAS
FOR OZONE IN THE STATE
OF SOUTH CAROLINA
-------
13 . 0 THE' ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
TANK TRUCK GASOLINE
LOADING TERMINALS IN
THE NONATTAINMENT AREAS
FOR OZONE IN THE STATE
OF SOUTH CAROLINA
This chapter presents a detailed analysis of the impact
of implementing RACT controls for tank truck gasoline loading
terminals in four non-attainment counties in the State of
South Carolina^. The chapter is divided into six sections
including:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Cost and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic implications
Selected secondary economic impacts.
Each section presents detailed data and findings based
on the RACT guidelines, previous studies of tank truck
gasoline loading terminals, interviews and analysis.
1. The four non-attainment counties are Berkeley, Charleston, Lexington
and Richmond. In York County, which is also designated as non-attain-
ment, no bulk terminals were identified.
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 affected
counties in the State of South Carolina.
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 methodologies:
The number of establishments for 1977 was pro-
vided by the South Carolina Department of Health
and Environmental Control.
The number of employees in 1977 was derived by
determining the number of employees per establish-
ment in 1972 from the 197 2 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 of gasoline sold from term-
inals in the affected counties was provided by
the South Carolina Department of Health and Envir-
onmental Control.
Sales, in dollars, of motor gasoline for 1977 were
estimated by multiplying the number of gallons of
gasoline sold from terminals in the affected counties
in 1977 by the national dealer tankwagon price in
1977 (42.5C/gallon), which was reported in the
National Petroleum News Factbook, 197 8.
13-2
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13.1.2 VOC Emissions
VOC emissions for tank truck gasoline loading terminals
in the affected counties in South Carolina were calculated
by multiplying U.S. EPA emission factors by terminal through-
put and tank capacity. The South Carolina Department of
Health and Environmental Control provided data on terminal
throughput and tank capacity. 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
emission control were also analyzed in detail, and inter-
views 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 the affected counties
in South Carolina. The specific studies analyzed were:
Demonstration of Reduced Hydrocarbon Emissions from Gasoline
Loading Terminals, PB-243 363; Systems and Costs to Control
Hydrocarbon Emissions from Stationary Sources, PB-23 6 921;
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. A model plant reflecting two likely control
alternatives was defined. Control alternatives likely to
be used were applied to the number of tank truck gasoline
loading terminals in the affected counties 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
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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 a model terminal based on throughput for
two likely control alternatives
Developing costs of the alternative control systems
for the model terminal including:
Installed capital cost
Direct operating costs
Annualized capital charges
Gasoline credit
Net annualized cost
Assigning model terminal costs to terminals in
the affected counties in South Carolina
Aggregating costs to the total affected industry
in South Carolina.
Costs were determined mainly from analyses of the
RACT guidelines and from interviews with petroleum marketers1
associations, terminal operators and vapor control equip-
ment manufacturers.
13.1.5 Economic Impact
The economic impacts were determined by analyzing the
lead time requirements needed to implement RACT; assessing
the feasibility of instituting RACT controls in terms of
capital availability and equipment availability; comparing
the direct costs of RACT control to various state economic
indicators; and assessing the secondary effects on market
structure, employment and productivity as a result of im-
plementing RACT controls in the four affected counties in
South Caroina.
13-4
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13.1.6 Quality of Estimates
Several st/urces of information were utilized in assessing
the emissions, cost and economic impact of implementing RACT
controls for terminals in the four affected counties in South
Carolina. 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 13-1, on the following
page, rates each study output listed and the overall quality
of the data.
13-5
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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.
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13.2 INDUSTRY STATISTICS
Industry characteristics, statistics and business trends
for tank truck gasoline loading terminals in the affected
counties in South Carolina are presented in this section.
The discussion includes a description of the number of facil-
ities and their characteristics, a comparison of the size
of the affected gasoline terminal industry to state economic
indicators, a historical characterization and description
of the industry and an assessment of future industry
patterns. Data in this section form the basis for assessing
the impact on this industry of implementing RACT on tank
truck gasoline loading terminals in the affected counties
in South Carolina.
13.2.1 Size of the Industry
There were five tank truck gasoline loading terminals,
as of 1977, in the four affected counties in South Carolina.
Industry sales were in the range of $114 million, with an
estimated yearly throughput of 270 million gallons of
gasoline. The estimated number of employees in 1977 was 55.
These data and the sources of information are summarized in
Exhibit 13-2, on the following page. Annual capital invest-
ments have not been estimated. In general, tank truck gaso-
line loading terminal investments are for plant and equip-
ment to replace worn-out facilities, modernize the establish-
ments or improve operating efficiencies.
13.2.2 Comparison of the Industry to the State Economy
A comparison of the affected tank truck gasoline loading
terminal industry to the economy of the State of South
Carolina is shown in this section by comparing industry
statistics to state economic indicators. Employees in the
affected tank truck gasoline loading terminal industry
represent a minimal percent of the total state civilian
labor force of South Carolina. The value of gasoline
sold from terminals represented less than 0.2 percent of the
total value of wholesale trade in South Carolina in 1977.
13.2.3 Characterization of the Industry
Tank truck gasoline loading terminals are the primary
distribution point in the petroleum product marketing
13-6
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Exhibit 13-2
U.S. Environmental Protection Agency
INDUSTRY STATISTICS FOR TANK TRUCK
GASOLINE LOADING TERMINALS IN SOUTH CAROLINA
Number of
Establishments
Number of
Employees
Sales
Gasoline Sold
($ Million, 1977) (Millions of Gallons)
5a
55
114c
270a
a. State of South Carolina, Department of Health and Environmental
Control.
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).
-------
Exhibit 12-3
U.S. Environmental ?ro~ec~ior. Agency
GASOLINE DISTRIBUTION NETWORK
REFINERY
TERMINAL
?
O
Typical delivery route of truck-trailer
Typical delivery route of account truck
Typical transaction with consumer coming to supplier
Final Product Usage
Source:
Economic Analysis of Vapor Recovery Svszems on S~all
Bulk Planus, EPA 240/1-77-013, Se?-=-ber 1976, p. 3-2.
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network as shown in Exhibit 13-3, following Exhibit 13-2.
Terminals receive gasoline from refineries by pipeline,
tanker or barge.
Most gasoline terminals load all of the petroleum
product they receive into truck transports at the terminals1
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 mar-
kets are being consolidated, sold or closed.
Gasoline terminals are generally located near refineries
pipelines and large metropolitan areas. The daily through-
put nationally ranges from 20,000 gallons per day to over
600,000 gallons per day.
Exhibit 13-4, on the following page, shows the dis-
tribution of gasoline terminals by throughput in the four
affected counties in South Carolina.
13-7
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Exhibit 13-4
U.S. Environmental Protection Agency
TANK TRUCK GASOLINE LOADING TERMINAL
THROUGHPUT IN THE FOUR AFFECTED
NONATTAINMENT COUNTIES IN SOUTH CAROLINA
Gasoline
Terminal Throughput
(gallons per day)
A 161,000
B 272,500
C 117,000
D 85,000
E 94,900
Source: State of South Carolina, Department of Health and
Environmental Control.
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13.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents information on tank truck gaso-
line loading terminal operations, estimated VOC emissions
from terminal operations in the four affected counties in
South Carolina, the extent of current control in use, the
requirements of vapor control required by RACT and the likely
RACT alternatives which may be used for controlling VOC emis-
sions from the affected gasoline terminals in South Carolina.
13.3.1 Tank Truck Gasoline Loading Terminal Operations
Tank truck gasoline loading terminals are the primary
distribution facilities which receive gasoline from pipe-
lines, tankers and barges; store it in above-ground storage
tanks; and subsequently dispense it via tank trucks to bulk
gasoline plants and service stations. Tank truck gasoline
loading terminals with an average daily gasoline throughput
of 20,000 gallons per day or more (as defined by EPA) require
vapor control equipment to reduce VOC emissions from gasoline
terminal operations. Facilities and operations at tank
truck gasoline loading terminals are described in detail
in Control of Hydrocarbons from Tank Truck Gasoline
Loading Terminals.
13.3.2 Emissions and Current Controls
This section presents the estimated VOC emissions from
tank truck'gasoline loading terminals in the four affected
counties in South Carolina in 1977 and the current level of
emission control already implemented.
Exhibit 13-5, on the following page, shows the total
estimated emissions in tons per year from the five affected
gasoline terminals in four nonattainment counties in South
Carolina. The emissions are estimated to be 872 tons per
year. Bottom filling or top submerge filling is reportedly
used at the five affected terminals in South Carolina and
no terminal is currently equipped with a vapor recovery
system.
13-8
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Exhibit 13-5
U.S. Environmental Protection Agency
"7QC EMISSIONS FROM AFFECTEL TANK TRUCK TERMINALS
IN FOUR NONATTAINMENT COUNTIES IN SOUTH CAROLINA
Estimated
Number of Facilities Annual Throughput Total Emissions
(Millions of gallons) (tons/year)
270c
872
a. Data supplied by the South Carolina Department of Health
and Environmental Control
Source: Booz, Allen & Hamilton Inc. and the State of South
Carolina, Department of Health and Environmental
Control.
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13.3.3 RACT Guidelines
The RACT guidelines for VOC emission control from tank
truck gasoline loading terminals require the following con-
trol systems:
Top submerged or bottom fill of gasoline storage
tanks and outgoing tank trucks
Vapor collection from trailer-transport truck
loading
Vapor recovery or thermal oxidation of collected
vapors
Proper operation and maintenance of equipment.
Exhibit 13-6, on the following page, summarizes the RACT
guidelines for VOC emissions control from tank truck gasoline
loading terminals.
13.3.4 Selection of the Most Likely RACT Alternatives
Control of VOC emissions from tank truck gasoline
loading terminals is achieved using submerged or bottom
filling of storage tanks and of tank trucks and vapor 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.
13-9
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Exhibit 13-6
U.S. Environmental Protection Agency
VOC EMISSION CONTROL TECHNOLOGY FOR
TANK TRUCK GASOLINE LOADING TERMINALS
Facilities Affected Sources of Emissions RACT Control Guideline
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 of
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
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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.
13.3.4.2 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 South Carolina.
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 estimated to be
more costly to build.
13.3.4.4 Thermal Oxidation (OX)
Vapor control by thermal oxidation is achieved by
incineration devices. Gasoline vapors are displaced to a
vapor holder. When the vapor holder reaches its capacity,
vapors are released to the oxidizer, after mixing with a
properly metered air stream, and combusted. Later models
of this type of thermal oxidizer do not require vapor holders;
vapors from the tank trucks during loading operations are
13-10
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vented directly to the thermal oxidizer. It is not expected
that this type of vapor control system will be used in
South Carolina-since there are fire hazards with a flame
and terminal operators are also reportedly reluctant to
burn valuable hydrocarbons.
13.3.5 Leak Prevention from Tank Trucks
For vapor control systems to operate optimally, it
is essential to maintain leakless tank trucks. This is
achieved by using proper operating procedures and periodic
maintenance of hatches, P-V valves and liquid and gaseous
connections.
13-11
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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. Factory costs for the four types of vapor
control systems described in Secton 13.3 are first presented
followed by costs for a model tank truck gasoline loading
terminal. The final section presents a projection of
model terminal control costs to the affected 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 the affected tank truck gasoline loading terminals
in South Carolina. It is estimated that three of the
systems will be adsorption/absorption and the other two 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
A model tank truck gasoline loading terminal and its
associated vapor 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 model
tank truck gasoline loading terminal characteristics and
associated control costs.
13-12
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Exhibit 13-7
U.S. Environmental Protection Agency
FACTORY COSTS OF ALTERNATIVE
VAPOR CONTROL SYSTEMS
Type of Control Svs~em
Factory Costa
•ror 250,000
gallon per
day system
($000, 1977)
Adsorption/Absorption 120°
Compression-Refrigeration- 128
Absorption
Refrigeration 120c
Thermal Oxidation 72
a. Costs are based on average of range of costs quoted by vendors
to the U.S. Environmental Protection Agency and reported in The
Economic Impact of Vapor Control on the Bulk Storage Industry,
draft report, July 1978.
b. Hydrotech Engineering reported a factory price of $92,000 for a
250,000 gallon per day unit.
c. Expect system priced competitively to adsorption/absorption system
due to market pressure.
Source: Hydrotech, U.S. Environmental Protection Agency, Exxon and
Booz, Allen & Hamilton Inc. estimates
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Tank Truck Gasoline Loading
Terminal Characteristics
Throughput
Loading racks
Storage tanks
Tank trucks
Compartments per account truck
Vapor control systems
Tank Truck Gasoline Loading
Terminals 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)
Exhibit 13-8
.S. Environmental Protection Agency
DESCRIPTION AND COST OF MODEL TANK
TRUCK GASOLINE LOADING TERMINALS
EQUIPPED WITH VAPOR CONTROL SYSTEMS
Model Terminal
250,000 gallons/day
1
3
6
4
Adsorption/Absorption
Refrigeration
AA RF
$258,000 $258,000
3,900 9,900
10,800 13,200
1,500 1,500
2,400 -
18,600 24,600
54,180 54,180
72,780 78,780
Source: Booz, Allen & Hamilton Inc.
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The costs for the model terminal are used in Section
13.4.3 to project costs of vapor control equipment to
the affected industry in four nonattainment counties in
South Carolina. The costs for the model terminal are:
Installed capital cost, which includes equipment
and modification costs, labor and costs to modify
trucks ($3,000 per truck)
Annualized costs which include electricity,
maintenance, operating labor and carbon
-eplacemenc cost~. Maintenace costs for
the adsorption/absorption system are sligntly
lower than those for refrigeration
Annualized capital charges, which include costs for
depreciation, interest, taxes and insurance and
are estimated to be 21 percent of the installed
capital cost
Net annualized costs, which are the sum of the
capital charges and direct operating costs. It
shculd be noted that gasoline credit has not
yet been accounted for. Gasoline credit Wj.il be
taken into account when the costs are projected
to the affected industry.
Another cost characterization that can be made is hydrocarbon
reduction versus cost. This finding will also be shown in
the affected industrywide analysis.
13.4.3 Projection to the Industry Affected In The Four
Nonattainment Counties
Exhibit 13-9, on the following page, shows the pro-
jection of vapor recovery costs to the affected industry in
South Carolina. The estimates are based on the following
assumptions:
In the four nonattainment counties in South
Carolina three of the tank truck gasoline
loading terminals are expected to implement
the adsorption/absorption vapor control system
to comply with RACT and the other two will
implement the refrigeration system to comply
with RACT.
RACT is implemented at bulk gasoline plants and
gasoline service stations in the four affected
counties in the state. Ninety percent of the
13-13
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Exhibit 13-9
U.S. Environmental Protection Agency
COSTS OF VAPOR CONTROL SYSTEM FOR THE
AFFECTED TANK TRUCK GASOLINE LOADING
TERMINALS IN THE FOUR NONATTAINMENT
COUNTIES IN SOUTH CAROLINA
Characteristic/Cost Item Daza
Number of terminals 5
Total annual throughput 270
(millions of gallons)
Uncontrolled emissions 872
(tons/year)
Emission reduction 785
(tons/year)
Installed capital cost 1.4
($ million, 1977)
Direct annualized cost D.105
(5 million, 1977)
Annual capital charges 0.271
($ million, 1977)
Annual gasoline credit3 0.275
($ million, 1977)
Net annualized cost 0.101
($ million, 1977)
Annualized cost per ton of 347
emissions reduced at
the terminal from terminal
emission only ($ per ton)
Annualized cost per ton of 48
emissions reduced at ter-
minals including service
stations and bulk plant
emissions covered
($ per ton)
Annualized cost per ton of 306
emissions reduced
from gasoline marketing13
Based on 2,097 tons of emissions recovered which includes
1,193 tons collected from gasoline service stations, 119
tons collected from bulk plants and 785 tons collected
at the terminal.
Calculated by dividing sum "of annualized cost for service
stations, bulk plants and terminals by the sum of emissions
reduced from service stations, bulk plants and terminals.
-------
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 previous assumptions, the total cost to
the affected industry for installing vapor recovery equipment
is estimated to be $1.4 million. The amount of gasoline
recovered is valued at $275,000. The annualized cost per ton
of emissions controlled from terminals operations only (not
including emissions brought back and recovered from service
stations or bulk gasoline plants) is estimated to be $347
per ton. Assuming that the reserved vapors from the control
of bulk gasoline plants and service stations is reserved at
the terminals, the cost per ton of emissions controlled is
estimated to be $4 8 per ton.
13.5 DIRECT ECONOMIC IMPLICATIONS
This section presents the direct economic implications
of implementing RACT controls to the affected industry in
the four nonattainment counties including availability of
equipment and capital, feasibility of the control technology,
and impact, on state economic indicators.
13.5.1 RACT Timing
RACT must be implemented statewide by May 1, 19 81.¦
This implies tuat tank true/, gasoline loading terminal
operators must have vapor control equipment installed and
operating within the next two years. The timing require-
ments of RACT impose several requirements on terminal opera-
tors 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
required timeframe.
13-14
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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 U.S. have successfully implemented vapor control
systems. State adoption of RACT regulations will generate
a new demand for vapor control systems. It is expected that
sufficient leadtime is available to meet the increased
demand, thus making the implementation of RACT technically
feasible.
In the area of economic feasibility, it has been
reported that terminal operators have access to capital to
purchase vapor control equipment, and it is expected that
no terminal will cease operations solely because of the cost
of implementing RACT.
13.5.3 Comparison of Direct Cost With Selected Direct
Economic Indicators
This section presents a comparison of the net annualized
cost of implementing RACT with the total vain® of aasoli^^
sold from affected terminals in the four nonattainment counties
and the value of wholesale trade in the state.
The net annualized cost to the tank truck gasoline
loading terminals resulting from RACT represents 0.09 per-
cent of the total gasoline sold from the affected terminals.
When compared to the statewide value of wholesale trade, the
annualized cost is small.
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 expected
solely because of RACT requirements. A slight
increase in operating and maintenance labor may
be required through implementation of RACT but
this is predicted to have minimal impact on any
employment increase.
Market Structure. No change in market structure
is expected from implementation of RACT.
Productivity. No change in worker productivity is
expected to' result from implementation of RACT.
*****
Exhibit 13-10 presents a summary of the findings of
this chapter.
13-16
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Current Situation
Exhibit 13-10
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMF LICATIOK3 OF
IMPLEMENTING RACT FOP. TANK TRUCK GASOLINE
LOADING TIRMINV.r IN SOUTH C-»OLINA
(NONATTAINMENT COUNTIES)
Discussion
Number of potentially affected
facilities
Indication of relative importance
of industrial section to state
economy
Current industry technology
trends
1977 VOC actual emissions
Industry preferred method of
VOC control to meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment
Annualized cost
Price
Energy
1977 sales were $114 million with
annual throughput of 270 million
gallons at the effected facilities
New terminals are being designed with
vapor recovery equipment
872 tons per year
Submerge or bottom fill and vapor
recovery
Discussion
$1.4 million
$0.1 million (approximately 0.09
percent- of value of shipments)
No major impact
Assuming full recovery of gasoline—
net savings of 5,362 barrels annually
from terminal emissions
Productivity
Employment
Market structure
Problem area
No major impact
No direct impact
No direct impact
Gasoline credit from vapors from bulk
gasoline plants and gasoline service
stations require uniform RACT require-
ments throuahout the state
VOC emission after PACT rontiol
Cost effectiveness of RACT control
87 tons per year
$48 annualized cost/annual ton of
VOC reduction from terminals assuming
gasoline credit from vapors returned
from bulk gasoline plants and gasoline
service stations
Source: Booz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
National Petroleum News Factbook, 1976, McGraw Hill, Mid-
May 19 76.
National
Petroleum
News
Factbook,
1977 ,
McGraw
Hill,
Mid-
May 197 7.
National
Petroleum
News
Factbook,
1978,
McGraw
Hill,
Mid-
June 1978.
Control of Hydrocarbons from Tank Truck Gasoline Loading
Terminals, EPA-450/2-77-026, U.S. Environmental Protection
Agency
The Economic Impact of Vapor Control on the Bulk Storage
Industry, prepared for U.S. Environmental Protection
Agency by Arthur D. Little, draft report, July 1978.
Regulatory Guidance for Control of Volatile Organic Compound
Emissions from 15 Categories of Stationary Sources,
EPA 905/2-78-001, April 1978.
Systems and Costs to Control Hydrocarbon Emissions from
Stationary Sources, PB-236 921, Environmental Protection
Agency, September 1974.
1972 Census of Wholesale Trade, Petroleum Bulk Stations and
Terminals, U.S. Bureau of Census.
Demonstration of Reduced Hydrocarbons Emissions from Gasoline
Loading Terminals, PB-234 363.
Private conversation with Mr. Clark Houghton, Mid-Missouri
Oil Company.-
Private conversation with Mr. Gordon Potter, Exxon, Houston,
Texas.
Private conversation with Mr. James McGill, Hydrotech,
Tulsa, Oklahoma.
Private conversation with Mr. Frederick Rainey, Shell Oil
Company, Houston, Texas.
Private conversation with Mr. William Deutsch, Illinois
Petroleum Marketers Association, Springfield, Illinois.
-------
Private conversation with Mr. Richard Pressler, Illinois
Environmental Protection Agency, Springfield, Illinois.
Private conversation with Mr. Moonihan, Exxon
Terminal, South Carolina
-------
14.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
BULK GASOLINE PLANTS IN
THE NONATTAINMENT AREAS
FOR OZONE IN THE STATE
OF SOUTH CAROLINA
-------
14.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
BULK GASOLINE PLANTS IN
THE NONATTAINMENT AREAS
FOR OZONE IN THE STATE
OF SOUTH CAROLINA
This chapter presents a detailed analysis of the impact
of implementing RACT controls for bulk gasoline plants in
four urban nonattainment counties in the State of South Carolina.
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 four urban nonattainment counties are: Berkeley, Charleston,
Lexington and Richland. In York County which is also designated
as nonattainment but subject to 100 tons per year potential ex-
emption, it is estimated that no bulk plants would be affected.
14-1
-------
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 South Carolina.
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 con-
verted to a base year, 1977, based on specific methodologies:
The number of bulk plants in the affected
counties for 1977 was from the South Carolina
Department of Health and Environmental Control.
The number of employees in 1977 was derived from
the 1972 Census of Wholesale Trade, Petroleum Bulk
Stations and Terminals by determining the number
of employees per establishment in 1972 and mul-
tiplying this factor by the number of affected
establishments reported for 1977.
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).
14.1.2 VOC Emissions
The South Carolina Department of Health and Environ-
mental Control calculated emissions from the affected bulk
gasoline plants using U.S. EPA emission factors reported
in Hydrocarbon Control Strategies for Gasoline Marketing
Operations.
14-2
-------
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
South Carolina. 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-236 921; and Study of Gasoline
Vapor Emission Controls at Small Bulk Plants, EPA PB-267-096.
The alternative types of vapor control equipment likely
to be applied to bulk gasoline plants were arrayed, and
percentage reductions from using each type of control were
determined. The methodology for the cost analysis based on
this scheme is described in the following paragraphs.
14.1.4 Cost of Vapor Control Systems
The 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 two model plants
14-3
-------
Developing costs of control systems for model
plants including
Installed capital cost
Direct operating costs
Annual capital charges
Gasoline credit
Net annualized cost
Assigning model plant costs to affected bulk plants in
the four urban nonattainment counties in South Carolina
Aggregating costs to the affected industry in the
four urban nonattainment counties in South Carolina.
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 .
A profile of bulk plants for the affected bulk gasoline
plants in South Carolina were determined from data supplied
by the South Carolina Department of Health and Environmental
Control.
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 South Carolina.
14-4
-------
14.1.6 Quality of Estimates
Several sources of information were utilized in
assessing the emissions, cost, and economic impact of
implementing RACT controls at bulk gasoline plants in
the four urban nonattainment counties in South Carolina.
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 Q
Emissions #
Cost of emissions #
control
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 the four urban
nonattainment counties in South Carolina 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 affected bulk gasoline plant
industry to state economic indicators, a historical char-
acterization 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 affected
counties in South Carolina.
14.2.1 Size of the Industry
There were an estimated 40 affected bulk gasoline
plants, as of 1977, in the four nonattainment counties in
South Carolina. Industry sales from affected bulk plants
were in the range of $21.9 million, with an estimated yearly
throughput of 52 million gallons of gasoline. The estimated
number of employees in 1977 was 220. 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 South Carolina
is shown in this section by comparing industry statistics
to state economic indicators. Employees in the bulk gaso-
line plant industry represent an insignificant percent of
the total state civilian labor force of South Carolina.
The value of gasoline sold from the affected bulk plants
represented approximately 0.3 percent of the total value
of wholesale trade in South Carolina in 1977.
14.2.3 Characterization of the Industry
Bulk plants are an intermediate distribution point
in the petroleum product marketing network as shown in
Exhibit 14-3, following Exhibit 14-2. Bulk gasoline plants
14-6
-------
Exhibit 14-2
U.S. Environmental Protection Agency
INDUSTRY STATISTICS FOR AFFECTED
BULK GASOLINE PLANTS IN THE FOUR
NONATTAINMENT COUNTIES IN SOUTH CAROLINA
Number of
Establishments
Number of
Employees
Sales
(S Million, 1977)
Gasoline Sold
(Millions of Gallons)
40a
220b
21. 9C
a. South Carolina Department of Health and Environmental Control.
b. Booz, Allen S 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 in 1977 multiplied
by the national dealer tankwagon price in 1977 (42.51C/gallon).
National Petroleum News Factbook, 1978.
d. South Carolina Department of Health and Environmental Control.
Source: Booz, Allen & Hamilton Inc.
-------
,5. Zrivironnennai ?rc~ec~icn Acer.cv
GASOLINE DISTRIBUTION NETWORK
O
O
o
->- Typical delivery route of truck-trailer
Typical delivery route of account truck
"*• Typical transaction with consumer coming to supplie;
Final Product Usage
Source: Economic Analysis of Vapor Recovery Systems on Small
Bulk Plants, EPA 340/1-77-013, September 1976, p. 3-2.
-------
compete with bulk gasoline tank terminals and large retail
gasoline outlets. Ownership and operation of bulk plants
are predominantly by independent jobbers and commissioned
agents but also include cooperatives and salaried employees.
The independent jobber owns the equipment and structures
at his bulk plant, the inventory, and rolling stock, and
he contracts directly with the 'oil company for gasoline.
A commissioned agent usually does not own the equipment and
facilities but operates the bulk plant for a major integrated
oil company.
Bulk gasoline plants are typically located near towns
and small cities, since their predominant market is agri-
cultural 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 distribution
of affected bulk gasoline plants by plant throughput in
the four affected counties in South Carolina.
It is estimated that the majority of the bulk gasoline
plants are up to 25 years old, with a few new modernized,
higher volume plants. Forty years ago, bulk gasoline plants
were a major link in the gasoline distribution network.
From that time, their importance has been declining in the
marketing sector of the petroleum industry, basically for
economic reasons. There is evidence that profitability
in bulk gasoline plants has been decreasing. The number
of bulk gasoline plants decreased by 11 percent nationally
from 1967 to 1972 and is predicted to continue declining
in the near term^. This decline is largely attributable to
major oil companies disposing of commission-agent-operated
bulk plants.
1 National Petroleum News Factbook, 1976.
14-7
-------
Gasoline
Throughput
(gallons per dav)
Less than 2,000
2,000 to 3,999
4,000 to 5,999
6,000 to 7,999
8,000 to 9,999
10,000 to 20,000
Exhibit 14-4
U.S. Environmental Protection Agency
DISTRIBUTION OF 3ULK GASOLINE PLANTS
BY AMOUNT OF THROUGHPUT FOR THE FOUR
NONATTAINMENT COUNTIES IN SOUTH CAROLINA
Estimated
Number
of Plants
10
14
13
4
2
3
Source: South Carolina Emission Inventory
-------
14.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents information on bulk gasoline
plant operations, estimated VOC emissions from affected
bulk gasoline plant operations in the four urban non-
attainment counties in South Carolina, the extent of
current control in use, the requirements of vapor control
required by RACT and the likely RACT alternatives which
may be used for controlling VOC emissions from affected
bulk gasoline plants in South Carolina.
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 40 affected bulk gasoline plants in the four urban
nonattainment counties in South Carolina in 1977 and the
current level of emission control already implemented in
the affected counties in the state. Exhibit 4-5, on the
following page, shows the total estimated emissions in
tons per year from the affected bulk gasoline plants in
the affected counties. The estimated 1977 VOC actual
emissions from the 40 bulk gasoline plants are 676 tons
per year.
14-8
-------
Exhibit 14-5
U.S. Environmental Protection Agency
VOC EMISSIONS FROM AFFECTED BULK
GASOLINE PLANTS IN THE FOUR URBAN
NONATTAINMENT COUNTIES IN SOUTH CAROLINA
Number of Estimated Annual
Facilities Throughput Total Emissions
(Millions of gallons) (tons/year)
40 52 676
Source: Booz, Allen & Hamilton Inc.
-------
14.3.3 RACT Guidelines
TheiRACT 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
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
14-9
-------
Exhibit 14-6
U.S. Environmental Protection Ageny
VOC EMISSION CONTROL TECHNOLOGY FOR
BULK GASOLINE PLANTS
Facilities
Affected
Bulk plants with
daily throughputs
of 76,000 liters
(20,000 gallons)
of gasoline or less
Sources of
Emissions
Vapor displacement
from filling ac-
count trucks, and
breathing losses
and working losses
from storage tanks
RACT Control
Guidelines
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 METHOD
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.
-------
Vapor balancing of gasoline storage tank and
outgoing account truck
Equipping account trucks with vapor balancing
connections.
It is estimated that all 40 bulk plants in the
affected counties in South Carolina would select Control
Alternative I to achieve vapor recovery to meet the state
RACT requirements based on data provided by the South
Carolina Department of Health and Environmental Control.
During interviews, the industry has questioned whether
vapor 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.
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
14-10
-------
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.
14-11
-------
14.4 COST AND HYDROCARBON REDUCTION BENEFIT EVALUATIONS
FOR THE MOST LIKELY RACT ALTERNATIVES
Costs for VOC emission control equipment are presented
in this section. The costs for the three alternative
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 bulk plants in the affected counties in South Carolina
since these bulk gasoline plants employ top filling. 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 $5 0,000 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 South Carolina that any
bulk gasoline plant 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
14-12
-------
Exhibit 14-8
U.S. Environmental Protection Agency
COSTS OF ALTERNATIVE VAPOR CONTROL SYSTEMS
Alternative
Alternative
Alternative
II
III
Cost Estimates
(Includes conversion
to bottom filling)
National Oil
Jobbers Council
estimate
1 truck (4 com-
partments)
1 loading rack
(3 arms)
Similar to costs
for alternative
I
1 truck (4 com-
partments )
1 loading rack
(3 arms)
3-inch system
Pre-set meters
Direct cost
(no labor)
$20,524 (with-
out air)
$22,754 (with
air)
3-inch system
Pre-set meters
Direct cost
(no labor)
$27,729
Pacific Environ-
mental Services
estimate of
Houston/Galveston
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
$ 1'8 , 416
-------
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 40 affected bulk gasoline plants in
the four urban nonattainment counties in South Carolina 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
Annualized direct costs, expected to be 3 per-
cent 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 costs, which are the sum of the
capital charges and annualized direct 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 pro-
jected 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 14-11, shows the pro-
jection of vapor recovery costs to the affected industry
in the four urban nonattainment counties in South Carolina.
The estimates are based on the following assumptions:
In the affected counties, the affected bulk
gasoline plants can be characterized by the
model plant
14-13
-------
Exhibit 14-9
U.S. Environmental Protection Agency
DESCRIPTION AND COST OF A MODEL BULK PLANT
EQUIPPED WITH VAPOR CONTROL
Bulk Plant
Characteristics
Throughput
Loading racks
Storage tanks
Account trucks
Compartment per account
truck
Model Bulk
Plant
4,000 gallons/day
1
3
2
Vapor control system
Alternative I
Bulk Plant
Costs
Installed capital costa $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 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 $150 to install submerged
fill pipe.
Source: Booz, Allen & Hamilton Inc.
-------
Exhibit 14-10
U.S. Environmental Protection Agency
INDUSTRY COSTS OF VAPOR CONTROL SYSTEMS
FOR AFFECTED BULK GASOLINE PLANTS
IN THE FOUR URBAN NONATTAINMENT COUNTIES
IN SOUTH CAROLINA
S
Characteristics/Cost Item Data
Number of facilities 40
Total annual throughput 52
(millions of gallons)
Uncontrolled emissions 676
(tons/year)
Emission reduction 498
(tons/year)
Emissions after RACT control 178
(tons/year)
Installed capital3 550,000
($, 1977)
Direct annual operating cost 16,000'
($, 1977)
Annualized capital charges 138,000
($, 1977)
b
Annual gasoline credit 6,000
($, 1977)
Net annualized cost 148,000
($, 1977)
Annualized cost per ton of 297
emissions reduced
($ per ton)
a. Includes equipping 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.
-------
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 pending 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 $550,000. Ten percent of total emissions
can be credited to the bulk plant since installation of
vapor control equipment may reduce emissions by an estimated
10 percent. The annualized cost per ton of emissions con-
trolled is estimated to be $297 per ton.
14-14
-------
14.5 DIRECT ECONOMIC IMPLICATIONS
This section presents the direct economic implications
of implementing RACT controls to the industry in the four
affected counties in South Carolina 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.D.1 RACT Timing
RACT must be implemented in the four affected counties
by May 1, 1981. This implies that bulk gasoline plant
operators must have vapor control equipment installed and
operating within the next two years. The timing require-
ments 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 annualized:3tin~
costs incurred with vapor control
Acquiring the necessary vapor control equipment
Installing and testing vapor control equipment to
insure that the system complies with RACT.
The sections which follow discuss the feasibility and the
economic implications of implementing RACT within the
required timeframe.
14.5.2 Feasibility Issues
Technical and economic^feasibility issues of implement-
ing RACT controls are discussed in this section.
Several bulk plants in the U.S. have attempted to imple-
ment vapor control systems with varying degrees of success.
One bulk plant operator interviewed in Maryland implemented
vapor recovery at a cost of $65,000 in 1974. The operator
indicated that recent tests have shown the system operates
well within the 90 percent recovery requirement of RACT.
14-15
-------
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 cap-
ital 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.
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 the implementation of RACT
technically feasible.
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 expe"a direct
cost increase of nearly 0.5 cents per gallon :: zhey imple-
ment RACT.^ This may affect two of the affected bulk
plants.
The key to the direct economic impact will be the
ability of a bulk plant operator to pass on up to a 0.5
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.
14-16
-------
cent increase in the price of gasoline to customers (assum-
ing a full cost passthrough). 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 typical of the
small 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. Some
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 condition and
the additional financial burden of the RACT requirements.
The paragraphs which follow compare the affected state-
wide 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 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 cost to the bulk
gasoline plants due to RACT represents 0.6 8 percent of
the total gasoline sold from affected bulk gasoline plants
in the state. When compared to the statewide value of
wholesale trade, these annualized cost increases are minimal.
The impact on the unit price of gasoline varies with the
bulk plant throughput. As discussed in the preceding
1 Economic Analysis of Vapor Recovery Systems on Small Bulk
Plants, EPA 340/1-77-013, September 1976.
14-17
-------
section, the small bulk plants may experience a direct
cost increase of over 0.5 cent per gallon of gasoline sold,
whereas the larger bulk plants may experience a smaller
direct cost increase.
14-18
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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 4 jobs could be lost with the closing
of a bulk plant. No estimate was made of the number of bulk
plants that 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
declining 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 report.
14-19
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Exhibit 14-11
U.S. Environmental Protection Agencv
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR AFFECTED
BULK GASOLINE PLANTS IN THE STATE OF SOUTH CAROLINA
(NONATTAINMENT COUNTIES)
Current Situation
Number of potentially affected
facilities
Indication of relative impor-
tance of industrial section to
state economy
Current industry technology trends
Discussion
40
1977 industry sales from affected bulk
plants were $21.9 million. The estimated
annual throughput was 52 million gallons.
Only small percent of industry has
new/modernized plants
1977 VOC actual emissions 676 tons per year
Industry preferred method of VOC Top submerge fill and vapor balancing
control to meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment
Annualized cost
Price
Energy
Productivity
Employment
Market structure
Problem areas
VOC emission after RACT control
Cost effectiveness of RACT control
Discussion
$550,000
5148,000 (approximately 0.6 8 percent of
value of shipments)
Assuming a "direct cost passthrough"
. Industry-wide—SO.0028 per gallon increase
. Small operations—$0,005 per gallon increase
Assuming full recovery of gasoline—net
savings of 3,400 barrels annually
No major impact
No major impact; however, for plants closing,
potential average of 4 jobs lost per plant
closed
Regulation could further concentrate a
declining industry
Severe economic impact for some small bulk
plant operations. Recovery efficiency of
cost effective alternative has not been
effectively demonstrated
178 tons per year
$297 annualized cost/annual ton of VOC
reduction
Source: Bocz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
National Petroleum News Factbook, 1967, McGraw Hill,
Mid-May 197 6.
National Petroleum
News
Factbook,
1977,
McGraw
Hill,
Mid-May 197 7.
National Petroleum
News
Factbook,
1978,
McGraw
Hill,
Mid-June 197 8.
Economic Analysis of Vapor Recovery Systems on Small
Bulk Plants, EPA 340/1-77-013, September 1976.
Stage I Vapor Recovery and Small Bulk Plants in Washington,
D.C., Baltimore, Maryland, and Houston/Galveston, Texas,
EPA 340/1-77-010, April 1977.
Evaluation of Top Loading Vapor Balance Systems for Small
Bulk Plants, EPA 340/1-77-014, April 1977.
I
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
Memorandum, "Meeting with EPA and Others on Bulk
Plant Vapor Recovery," National Oil Jobbers Council
Mr. Bob Bassman, Counsel, March 21, 197 8.
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.
-------
15.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
STORAGE OF PETROLEUM
LIQUIDS IN FIXED-ROOF
TANKS IN THE NONATTAINMENT
AREAS FOR OZONE IN THE
STATE OF SOUTH CAROLINA
-------
15.0 THE ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR STORAGE OF PETROLEUM LIQUIDS IN
FIXED-ROOF TANKS IN THE NONATTAINMENT
AREAS FOR OZONE IN THE STATE OF SOUTH
CAROLINA
This chapter presents a detailed analysis of the
impact of implementing RACT controls for the storage of
petroleum liquids in fixed-roof tanks in four non-attainment
counties in South Carolina: Charleston, Berkeley, Lexington
and Richland. The major sections of the chapter include:
Specific methodology and quality of estimates
Technical characteristics of fixed-roof tanks
for storing petroleum liquids
Profile of statewide fixed-roof tank industry and
estimated annual VOC emissions
Cost of controlling VOC emissions
Economic impact.
Each section presents detailed data and findings based
on analyses of the RACT guidelines, previous studies of
fixed-roof storage tanks, interviews with industry repre-
sentatives and analysis of the findings.
i No fixed roof storage tanks over 400,000 gallons with potential
emissions over 100 tons per year were identified in York County.
15-1
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15.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining:
Technical characteristics of fixed-roof tanks
Profile of fixed-roof tanks
VOC emissions
Cost of vapor control systems
Economic impact of emission control for the stor-
age of petroleum liquids in fixed-roof tanks.
The quality of these estimates is discussed in the last
part of this section.
15.1.1 Technical Characteristics of Fixed-Roof Tanks
The technical characteristics of fixed-roof tanks and
processes for controlling their emissions were obtained
mainly from the RACT guideline entitled Control of Volatile
Organic Emissions from Storage of Petroleum Liquids in
Fixed-Roof Tanki"! 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 Profile of Fixed-Roof Tanks
The South Carolina Department of Health and Environmental
Control provided a listing of all petroleum storage facilities
in the four-county nonattainment area. The storage capacity
for each facility, the type of petroleum liquid stored and,
for some facilities, the annual throughput were provided.
Where not available, the annual throughput was calculate^
based on an assumed turnover rate of 25 cycles per year.
Based on throughput data for fixed-roof tanks in the State
of Kentucky supplied by the Kentucky Department for Natural
Resources and Environmental Protection.
15-2
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15.1.3 VOC Emissions
The VOC emissions were calculated based on the emis-
sion factors for working and breathing losses of various
types of petroleum liquids obtained from Revision of Evapor-
ative Hydrocarbon Emission Factors, EPA-450/3-76-039.
15.1.4 Cost of Vapor Control Systems
The costs of vapor control systems were developed by:
Determining the type of control system
Developing installed capital costs for each tank
Developing total annualized costs of control systems
for the number of tanks in the state including:
Installed capital cost
Direct operating costs
Annual capital charges
Petroleum liquid credit
Net annual cost
Aggregating costs to the total industry in
South Carolina.
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 Manufacturing
Chemists Association by Booz, Allen & Hamilton
Inc., June 12, 1978.
and from interviews with petroleum marketers' associations,
petrochemical manufacturers and vapor control equipment man-
ufacturers .
The extrapolation of the estimated cost of control in
the four nonattainment counties in South Carolina required
a profile of fixed-roof tanks for storing petroleum liquids
for the nonattainment area. These data were provided by the
South Carolina Department of Health and Environmental Control.
15-3
-------
15.1.5 Economic Impact of Emission Control
The economic impact of emission control for equipping
fixed-roof tanks used for storing petroleum liquids can
be determined only in terms of the aggregated costs of con-
trols. Since several industries use fixed-roof tanks,
economic impacts 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.
15.1.6 Quality of Estimates
Several sources of information were utilized in
assessing the emissions, cost and economic impact of
implementing RACT controls for fixed-roof tanks in the
four nonattainment counties in South Carolina. A rating
scheme is presented in this section to indicate the quality
of the data available for use in this study. A rating of
"A" indicates hard data (i.e., data that are published for
the base year); "B" indicates data that were extrapolated
from hard data; and "C" indicates data that were not available
in secondary literature and were estimated based on inter-
views, analyses of previous studies and best engineering
judgment. Exhibit 15-1, on the following page, rates each
study output listed and the overall quality of the data.
15-4
-------
jt'ALITV
Studv Cutouts
B C
A Extrapolated Estimated
Hare 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.
-------
15.2
TECHNICAL CHARACTERISTICS OF 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
emmitted 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 RACT guidelines call for installation of an inter-
nal floating roof for fixed-roof tanks storing greater than
40,000 gallons of petroleum liquids with a true vapor pres-
sure that exceeds 1.52 psi. The guidelines do not apply to
storage tanks equipped with external floating roofs or to
storage tanks having capacities less than 416,000 gallons
used to store crude oil and condensate prior to lease
custody transfer.
It is expected that the State of South Carolina will
prepare legislation for the storage of petroleum liquids
which is modeled after the RACT guidelines.
"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 trans-
fer facilities to pipelines or any other forms of transportation.
15-5
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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 the four nonattain-
ment counties in South Carolina and the estimated annual
VOC emissions from these tanks.
The South Carolina Department of Health and Environ-
mental control provided a listing of facilities with fixed-
roof tanks used for storage of petroleum liquid. The total
storage capacity for each facility was provided in the list-
ing. The total number of storage tanks was estimated by
assuming an average tank size of 300,000 gallons for the
major petroleum companies and 60,000 gallons for the smaller
petroleum distributers. It is estimated that there are approx-
imately 44 fixed-roof tanks with greater than 40,000 gallons
capacity not equipped with an internal floating roof in the
4-county area. The total storage capicity of these tanks is
approximately 10.5 million gallons and the annual throughput
is estimated at approximately 260 million gallons.
It is estimated that the annual VOC emissions from the
storage of petroleum liquids in fixed-roof tanks in the non-
attainment area are 1425 tons per year. By implementing RACT
guidelines in the four nonattainment counties, these emissions
could be reduced by 90 percent to an estimated 142 tons per
year.
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
Annual capital charges, estimated to be 25 percent
of installed capital cost and including costs for
depreciation, interest, maintenance, taxes and
insurance
Annualized direct cost?, estimated to be
2 percent of installed capital cost including
costs for inspection and recordkeeping
Annual petroleum liquid credit calculated by
multiplying emission reduction by the volume of
the petroleum liquid divided by the liquid density
and multiplied by a value of $0.39 per gallon
Net annualized costs, the sum of the capital
charges and annualized direct costs less the
petroleum liquid credit.
Capital costs were determined for each tank from the graph
in Exhibit 15-2, on the following page. This graph was pre-
pared by Booz, Allen based on interviews with petroleum
refineries, petrochemical manufacturers, tank manufacturers
and emission control equipment manufacturers. Total instal-
led capital cost, including labor, is 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
44 fixed-roof tanks affected by RACT with internal floating
roofs is approximately $1 million. The net annualized cost
is approximately $118,000 taking into account a liquid petro-
leum credit of $159,000. The annualized cost per ton of
emissions reduced is $92.
15-7
-------
Exhibit 15-2
U.S. Environmental Protection Agency
INSTALLED COST OF SINGLE SEAL
FLOATING ROOF TANKS
(Prices Approximate)
Source: Communications with Ultra-Float Inc.; Booz, Allen & Hamilton Inc.
analysis
-------
EXHIBIT 15-3
U.S. Environmental Protection Agency
VOC EMISSIONS CONTROL COSTS FOR STORAGE
OF PETROLEUM LIQUIDS IN FIXED-ROOF
TANKS IN THE FOUR NONATTAINMENT COUNTIES
IN SOUTH CAROLINA
SUMMARY
Plant Characteristics
Number of tanks 44
Total capacity 10.5
(millions of gallons)
Estimated annual throughput 260
(millions of gallons)
Uncontrolled emissions
(tons per year)
Emissions reduction
(tons per year)
Emissions after control
(tons per year)
1,425
1,283
142
Costs
Installed capital cost 1.02
($, millions, 1977)
Annualized capital charges 256
($, thousands, 1977)
Annualized direct costs
($, thousands, 1977)
Annual petroleum credit
($, thousands, 1977)
Net annualized cost
($, thousands, 1977)
Annualized cost per ton of
($, 1977)
20.5
159a
118
emissions reduced 92
Assume value of petroleum liquid saved is $.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 the Affected Counties
in South Carolina. An estimated $1 million will
be required in the four nonattainment counties
in South Carolina to equip fixed-roof tanks for
storing petroleum liquids with internal floating
roofs. This represents 1 percent of the value of
petroleum liquid throughput from uncontrolled fixed-
roof tanks in the nonattainment area.
Industries Affected. Fixed-roof tanks affected
by RACT guidelines are owned by major oil com-
panies, large petrochemical firms and bulk gaso-
line tank terminal companies. It is predicted
that these companies will be able to meet the
capital requirements. The source of capital is
likely to be the company's traditional source
of funds.
15-8
-------
15.6 SECONDARY ECONOMIC IMPACTS
It is expected that secondary economic impacts as a
result of implementing RACT guidelines in South Carolina
will be minimal. Employment, worker productivity, and
market structure should remain unchanged.
* * * * *
Exhibit 15-4 on the following page presents a summary
of the findings of this report.
15-9
-------
EXHIBIT 15-4
U.S. Environmental Protection Agency
Summary of Direct Economic Implications of
Implementing RACT for Storage of Petroleum
Liquid in the State cf South Carolina
(NONATTAINMENT COUNTIES)
Current Situation
Number of potentially affected 44
storage tanks
Indication of relative impor-
tance of industrial section
Current industry technology
trends
VOC emissions
Preferred method of VOC control
to meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment
Annualized cost
The annual throughput was an esti-
mated 260 million gallons
Internal floating roof tanks utiliz-
ing a double seal have been proven
to be more cost effective
1,425 tons per year
Single seal and internal floating
roof
$1.02 million
$118,000
Price
Energy
Productivity
Employment
Market Structure
Problem area
VOC emission after RACT
control
Cost effectiveness of RACT
control
Assuming a "direct cost" passthrough-
less than 0.05 cents per gallon
of throughput
Assuming 90 percent reduction of
current VOC level, the net energy
savings represent an estimated
savings of 8,000 equivalent barrels
of oil annually
No major impact
No major impact
No major impact
Potential availability of equipment
to implement RACT standard
142 tons per year
$92 annualized cost/annual ton
of VOC reduction
Source: Booz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
Benzene Emission Control Cost in Selected Segments of the
Chemical Industry, prepared for Manufacturing Chemists
Association by Booz, Allen & Hamilton Inc., June 12, 1978.
Control of Volatile Organic Emissions from Storage of
Petroleum Liquids in Fixed-Roof Tanks, EPA-450/2-77-036,
U.S. Environmental Protection Agency, December 1977.
Regulatory Guidance for Control of Volatile Organic Com-
pound Emissions from 15 Categories of Stationary Sources,
EPA-905/2-78-001, U.S. Environmental Protection Agency,
April 1978.
Revision of Evaporative Hydrocarbon Emission, PB-267 659,
Radian Corp., August 1976.
-------
16.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT STAGE I
FOR GASOLINE SERVICE STATIONS
IN' THE N ON ATTAINMENT AREAS
FOR OZONE IN THE STATE OF
SOUTH CAROLINA
-------
16.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT STAGE I
FOR GASOLINE SERVICE STATIONS
IN THE NONATTAINMENT AREAS FOR
OZONE IN THE STATE OF SOUTH
CAROLINA
This chapter presents a detailed analysis of implement-
ing RACT Stage I controls pertaining to gasoline dispensing
facilities^. Presently, only four counties in South Carolina
are classified as urban nonattainment areas. They are:
Charleston, Berkeley, Lexington and Richland. 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 VOC reduction benefit evaluations tfor
the most likely RACT control techniques
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.
The economic impact in this chapter is presented only
for the four urban nonattainment counties as gasoline
service stations in other areas of the state are not likely
to have potential VOC emissions greater than 100 tons per year.
Gasoline dispensing facility is a generic term which encompasses
both retail facilities and private outlets. The latter are pri-
marily establishments maintained by governmental, commercial or
industrial consumers for their own fleet operations. The latter
category also includes rural convenience stores, parking garages,
marinas and other retail outlets not classified as service
stations.
16-1
-------
16.1 SPECIFIC METHODOLOGY
This section describes "the methodology for 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 four urgan nonat-
tainment counties in South Carolina.
The quality of the estimates based on a three-point
scale is described in detail in the latter part of this
section.
16.1-1 Industry Statistics
The focal year of the analysis is 1977 and 'all hard
industry statistics are reported on this basis. When hard
data for the base year are not available, appropriate scal-
ing factors are applied to existing confirmed data to derive
base year estimates.
To derive the total number of gasoline dispensing
facilities in the four urban nonattainment counties a two-
stage procedure is used. First, the number of statewide
retail service stations is identified! 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. In addition to providing a basis for esti-
mating the total number of dispensing facilities at the
county level, the census publication is also used to cal-
culate total county employment levels.
National Petroleum 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: South Carolina, U.S. Department of
Commerce, CBP-76-12, 1978.
16-2
-------
Finally, to derive the volume of gasoline sold in the
non-attainment counties, existing data on state sales
totals are disaggregated using coefficients reflecting
the ratio of county establishments to state establishments.
A value is assigned to this sales volume using the 1977
average national service station price (50.7?/gal. exclud-
ing tax).
16.1.2 VOC Emissions
The Illinois EPA estimated VOC emissions for gasoline serv-
ice stations by applying an emission factor to the 1977 gasoline
throughput. This emission factor and procedure were used to
calculate emissions in affected counties in South Carolina.
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 South Carolina. 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, Stac^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 developed by:
Developing costs of two different control systems
for a model service station including:
Installed capital cost
Direct operating costs
Annual capital charges
Gasoline credit
Net annual cost
Aggregating costs to the countywide gasoline
dispensing establishment industry.
Costs were determined from analyses of the studies
listed previously, and from interviews with petroleum mar-
keters' associations, gasoline service station operators
and vapor control equipment manufacturers.
It was assumed that 75 percent of the gasoline dis-
pensing facilities would install coaxial or concentric
vapor balance systems and the remaining 25 percent would
install the two-point vapor balance system. Costs for the
two systems are assumed to be represented by the costs de-
veloped for the model service station discussed in
Section 16.4.1. Non-attainment county costs were extrapo-
lated from model costs.
16.1.5 Economic Impacts
The economic impacts were determined by analyzing the
lead time requirements needed to implement RACT; assessing
the feasibility of instituting RACT controls in terms of
capital and equipment availability; comparing the direct
costs of RACT control to various county economic indicators;
and assessing the secondary impacts on market structure,
employment and productivity resulting from implementation
of RACT controls.
16-4
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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 in gasoline service stations in the four
urban nonattainment counties in South Carolina. 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
A B C
Study Outputs Hard Data Extrapolated Estimated
Data Data
Industry statistics •
Emissions •
Cost of emissions
control •
Countywide costs of
emissions •
Economic impact •
Overall quality of
data •
Source: Booz, Allen & 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 num-
ber of facilities and their characteristics, a comparison
of the size of the service station industry to state eco-
nomic indicators, an historical characterization and de-
scription of the industry and an assessment of future indus
try patterns. Data in this section form the basis for
assessing the impact on this industry of implementing RACT
to VOC emissions from gasoline service stations in the
affected counties in South Carolina.
16.2.1 Size of Industry
There were an estimated 40 0 retail gasoline dispensing
facilities in the four urban nonattainment counties in
South Carolina in 1977. In addition, there were an esti-
mated 550 private dispensing establishments (which include
gasoline dispensing facilities such as marinas, general
aviation facilities, commercial and industrial gasoline
consumers and rural operations with gas pumps). For all
dispensing facilities sales were in the range of $183
million and yearly throughput was approximately 0.362 bil-
lion gallons of gasoline. The estimated number of employees
in 1977 was 2,010 employees in retail outlets and 1,100
employees in private outlets for a total of 3,110 employees.
These data and the sources of information are summarized in
Exhibit 16-2, on the following page. Total capital invest-
ments by the gasoline dispensing industry were not identified,
although in general gasoline dispensing outlet operators make
investments in plant and equipment to: replace worn-out
facilities and equipment; modernize the establishments; or
improve operating efficiencies.
16.2.2 Comparison of Industry to State Economy
Employment and sales are used as reference indicators
in order to gain a perspective on the economic significance
of the gasoline dispensing industry. The estimated 3,14 0
employees and $183,000,000 in sales constitute approximately
0.6 percent of the civilian labor force and eight percent
of the total four-county retail trade in 1977. In evaluat-
ing these percentages, it should be remembered that trans-
portation 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.
16-6
-------
.lXH.l3.lT x62
U.S. Environmental Protection Acrencv
INDUSTRY STATISTICS FOP. GASOLINE SERVICE STATIONS
IN THE FOUR URBAN NONATTAINMENT COUNTIES IN SOUTH CAROLINA
Number of Facilities Number of Employees
Retail Private
Dispensing Dispensing
Facilities Facilities
400=
550b
Retail
2,010°
rrivate
l,10Cd
Sales
Gasoline Sold
;?Billion, 1977) (Billions of Gallons)
,e
0.183
0.362"
a. Estimate based on data in National Petroleum News Fact Book, 1978
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 counties as of 1976.
Berkeley 2.86 employees per retail outlet
Charleston 5.68 "
Lexington 4.28 "
Richland 4.92 "
(Source: U.S. Department of Commerce, Bureau of the Census, County
Business Patterns 1976: South Carolina 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.
-------
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.
16-7
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EXHIBIT 16-3
U.S. Environmental Protection Agency
GASOLINE DISTRIBUTION NETWORK
fUflntry Qitt Met
Who kih
flldl Mot
PWxt ConHilTOf
Con »u mar Tinli Cm
flic*
Rytdl
Dtilir Tftnk
Wagon Prlc*
flack Piir« Plui
Ft fight
For Duact
Op«
-------
EXHIBIT 16-4
U.S. Environmental Protection Agency
U.S. RETAIL GASOLINE DISPENSING FACILITIES
% TOTAL OUTLETS
Major Oil Company
Regional Refiner
Independent
Marketer/"Super
Jobber"
Small Jobber
Direct
Outletsa
3. 5
2.3
9.3
2.9
Convenience
Stores
0.4
0.1
4.3
0.6
Leasee
Dealer*3
28.2
5.3
2.5
10.9
Open
Dealer0
15.7
1.1
0.6
12.3
Total
Directly
Supplied
47.8%
8. 8%
16. 7%
26. 7%
% Total Outlets 18.0% 5.4%
Total Number of
Outlets 32,070 9,600
46.9%
29.7% 100.0%
83,690 53,030 178,390
a Company "investment"/company operated
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.
-------
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
(Million Gal)
% Total U.S.
Private
Gasoline
Volume
% Total U.S.
Gasoline
Volume
Agriculture
32,600
3,801.3
15%
3%
Trucking and
local service
21,900
5,241. S
21%
5%
Government
35,450
U%
2%
- Federal
227.6
0.
n
- Military
174.1
0.
5%
- Other*
2,266.4
9.0%
Taxis
5,380
882.1
3%
0.8%
School Busses
3.070
144.7
1%
0.1%
Miscellaneous **
94,530
12,497.2
49%
11%
Total Non-Service
Station Segment
242,930
2S. 235.0
100%
23%
Retail Service
Station Segment
178,390
84,412.0
77%
All Segments —
421.320
109,647.0
100%
•State and municipal governments.
••Auto rental, utilities, and other.
Source:
U.S. Department of Labor, "The Economic Impact of Vapor
Recovery Regulations on the Service Station Industry,"
C-79911, March 1973, p. 47.
-------
Finally, no discussion of the industry would be com-
plete without a characterization of major trends. The num-
ber 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 to1high volume self-
service "gas and go" establishments. This trend also ap-
pears in South Carolina and is predicted to continue. In
1972 there were 3,720 service stations and in 1977 this
number fell to 2,89 8 .
16.2.4 Gasoline Prices
Gasoline prices vary among types of gasoline stations
within a geographical area. Convenience stores are apt to
have higher pump prices than large self-service "gas and go"
stations. The pump price less the dealer tank wagon price
represents the gross margin on a gallon of gasoline. Re-
tail gasoline service station operating costs then must
come out of the gross margin for gasoline as well as the
gross margin for other products which may be sold at the
service station. Operating costs vary substantially among
the various types of service stations. It is reported that
some service stations operate with nearly zero net margin
or profit on the sale of gasoline, while others may enjoy
up to four to five cents profit per gallon. Insufficient
detail is available on service stations in South Carolina
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 cur-
rent control in use, the vapor control requirements of
RACT and the likely alternatives which may be used for con-
trolling VOC emissions from gasoline dispensing facilities
in South Carolina.
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 four urban nonattainment counties is
approximately 32,000 gallons. Some of these facilities are
all subject to RACT regulations and will be required to comply
with Stage I vapor control by May 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 under-
ground tank. It was assumed that there are typically three
storage tanks per facility. Gasoline is dispensed to motor
vehicles through pumps and there may be anywhere from one
to twenty pumps per facility. Stage I vapor control regu-
lations 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 yea:,
from all dispensing facilities in the four urban nonattain-
ment counties. To arrive at this estimate it is assumed
that 90 percent^ of all storage tank loading is by the sub-
merge fill method and 10 percent by the splash fill method.
Given this assumption, emissions based on throughput are
estimated to be 1,396 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.
Source: Booz, Allen interviews with industry representatives.
16-10
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EXHIBIT 16-6
U.S. Environmental Protection Agency
ync EMISSIONS FROM GASOLTNE TK':;
FACi—ITIES IN THE FOUR URBAN NONATTAINMENT
COUNTIES IN SOUTH CAROLINA
Estimated
Number of
Facilities
950
Average Yearly Throughput Total Emissions5
(Millions of Gallons) (Tons/Year)
362 1,396
Splash fill emissions: 11.5 lbs/1000 gallons throughput
Submerge fill emissions: 7.3 lbs/1000 gallons throughput
assumes no vapor balancing
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
Gasoline service
stations and gaso-
line dispensing
facilities returns vapors cis-
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
Sources of Emissions
Storage tank filling
and unloading tank
truck
RACT Control Guidelines
Stage I vapor control
system, i.e., vapor
balance system which
Source: Regulatory Guidance for Control of Volatile Organic
Compound Emissions from 15 Categories of Stationary
Sources, pp. 28-31.
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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.
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 percent 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 personnel.
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
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 associa-
tions and from previous cost studies of gasoline dispensing
facilities. These costs are summarized for a typical gaso-
line dispensing facility in Exhibit 16-8. The monthly
throughput of an affected facility averages approximately
32,000 gallons or somewhat less than the average for
all retail facilities in the United States. Though South
Carolina facilities are somewhat below the U.S. average, in
general, service station equipment requirements (number of
storage tanks) are not very sensitive to throughput over a
large gallon range. Therefore, it appears that South
Carolina 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). The installed capital cost
for a coaxial or concentric system is reported by U.S. EPA
to be $150 to $200 per tank, including parts and labor.
Annualized capital costs are estimated at 25 percent of
installed capital cost and include interest, depreciation,
taxes and maintenance.
U.S. Department of Labor, 0SHA, The Economic Impact of Vapor
Recovery Regulations on the Service Station Industry, C-79911,
March 1978, p. 29.
Air Pollution Control Technology Applicable to 26 Sources of
Organic Compounds, U.S. Environmental Protection Agency, May 27,
1977. (This cost includes excavation and construction of mani-
folded storage tanks.)
16-12
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EXHIBIT 16-8
U.S. Environmental Protection Agency
STAGE I VAPOR CONTROL COSTS FOR A
TYPICAL RETAIL GASOLINE DISPENSING FACILITY
Description of Model Gasoline Station
Monthly throughput (gallons) 39,000a
Number of storage tanks 3^
Costs
($, 1977)
Installed capital
Annualized capital charges
Direct operating cost
Annualized coste
Two Point
System
2,000°
500
0
500
Coaxial or
Concentric
System
•600
150
0
150
39,000 is the national average. In South Carolina's
non-attainment counties the average is 32,000.
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 23 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.
-------
Based on these figures, the annualized cost at a
typical retail gasoline dispensing facility with 36,150
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 dis-
pensing facility, there are also the costs of vapor balanc-
ing borne by the owners of the tank trucks. The costs to
bulk gas plants and terminals of Stage I vapor modifica-
tions of fleet trucks have been discussed in other chapters.
Here the focus is on independent fleet operators subject
to RACT vapor controls. By approximating the total number
of tank trucks needed to service the gasoline dispensing
facilities in the non-attainment counties, and by subtract-
ing from this total the estimated number of trucks controlled
by bulk terminals and gas plants, the size of the indepen-
dent fleet is derived. Booz, Allen estimates that roughly
230 tank trucks require vapor modification.
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 expen-
sive top loading method will be used, and that this system
can be installed at a cost of $3,000 per truck. At 230
trucks total cost is $690,000. 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
1263 trucks and in non-attainment areas 278. Of these 278,
it is estimated that 48 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 TYFICAL GASOLINE DISPENSING TRUCK
Costs
(5, 1977)
Top Loading
Method
Installed capital3 3,000
Annualized capital charges*3 750
Direct operating cost 0
Annualized cost 750
Booz, Allen interviews with equipment manu-
facturers.
25 percent of installed capital cost. It
includes depreciation, interest, taxes,
insurance and maintenance.
-------
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.
Booz, Allen estimates that approximately 250 of the
potentially affected f acil:-ries will be exempted because
of exemptions in the proposed South Carolina regulations.
Therefore, an estimated 700 facilities will be potentially
affected. These facilities represent an estimated 1,250
tons of the 1,396 tons from gasoline dispensing facilities
in the four nonattainment county area.
The total cost to the industry of installing vapor
control equipment is estimated to be approximately
$1.1 million. The amount of gasoline prevented from
vaporizing by converting to submerged filling of the
gasoline storage tank is estimated to be worth approxi-
mately $12,000. Based on these estimates, the annualized
cost per ton of emissions controlled was $222 per ton.
16-14
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EXKI3IT 15-10
".S. Environmental Protection Agency
COSTS FOR STAGE I VAPOR CONTROL OF GASOL::.!
DISPENSING FACILITIES IN THE FOUR URBAN
NONATTAINMENT COUNTIES IN SOUTH CAROLINA
SUMMARY OF COSTS
Number of facilities 700
Total annual throughput
(billions of gallons) 0.324
Uncontrolled emissions
(tons/year) 1,249
Emissions reduction l,187a
(tons/vear)
Controlled emissions 62
(tons/year)
Installed capital ^ ^
($ millions)
dispensing facilities 0.411
tank trucks Q
Annualized capital cost
($ millions) 0.2 75
dispensing facilities 0.102
tank trucks 0.173
Annual gasoline credit
($ millions) 0.012
Net annualized cost
($ millions) 0.263
Net annualized cost per ton of
emissions reduced
($ per ton/year) $222
Estimate based on 95 percent reduction in emissions.
Gasoline credit to dispensing outlets is based on the conversion
from splash to submerged filling. The actual formula relates
throughput in splash fill facilities to potential captured vapors
resulting from equipment conversion, and values the recoverable
gasoline at its retail selling price (50.7C/gallon). Bulk ter-
minals also receive a gasoline credit for the recovered vapors
brought back by tank trucks. This gasoline is estimated to be
worth $163,000 when valued at the bulk wholesale price (42
-------
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 May 1, 1981.
This means that gasoline service station operators must
have vanor control eouinment installed and oneratinc with-
in the next two 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 the implementation of Stage I
RACT technically feasible.
16-15
-------
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.
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 10,00 0 gallons per month will
experience a cost increase of nearly 0.25 cents per gallon
to implement RACT, using the two-point vapor balance sys-
tem. Larger service stations will experience a cost in-
crease 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
-------
of business for up to three weeks while Stage I vapor con-
trol was being installed. Service station driveways were
torn up, greatly restricting access to pumps. In some
instances, oil company owned service stations were sold or
closed down because the oil companies did not want to ex-
pend funds for vapor control at these marginally profita-
ble operations.
The older service stations reportedly will experience
greater costs than new service stations when implementing
Stage I vapor control requirements. This is because older
stations will have more extensive retrofit requirements
and will probably experience more temporarily lost business
during the retrofit.
The number of gasoline service stations have been 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 acceler-
ate this as marginal operators may opt not to invest in the
required capital equipment. Sufficient data for South
Carolina 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 stations industry from RACT represents
0.14 percent of the value of the total gasoline sold in
the 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 10,000 gallons per month throughput, may
experience an annualized cost increase of up to 0.25 cents
per gallon of gasoline sold, whereas the large service
stations may experience an annualized cost increase only
one-fifth as large.
16-17
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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.
The impact on a specific service station operation is
expected to be slight. Fill rates for loading gasoline
storage tanks may marginally decline if coaxial or concen-
tric vapor hose connections are used.
"k * ~ *
Exhibit 16-11, on the following page, presents a
summary of the findings of this report.
16-18
-------
EXHIBIT 16-11(1)
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FC?.
GASOLINE DISPENSING FACILITIES
IN THE STATE OF SOUTH CAROLINA
: cr poter.
::ies
v a::e::ec
700 in the four urban nor.attair.rer.t
in:ica::on ot relative moortar.cs
:f industrial serior to
eccnoij'.'
4-county industry sales are SO. 1 = 3
million with a yearly throughput: of
0.362 billion gallons. Approximately
90 percent of the t.nrougr.put (0.324
billion gallons) woulc be affected at
the 700 facilities
Current industry tecnr.oj.ogy
trends
Number of stations has been declining
and throughput per station has been
increasing. By 1930, one-half of
stations in U.S. are predicted to
become totally self-service
1377 VOC emissions (actual)
1,396 tons per year from tank loading
operation. The VOC emissions at the
700 affected facilities is estimated
to be 1,250 tons oer vear.
Industry preferred method of VOC
control to meet RACT Guidelines
Submersed fill and vaoor balance
Assumed method of control to meet
RACT Guidelines
Submerged fill and vapor balance
Affected Areas in Meetmc RACT
Discussion
Caoital investment
Annualized cost
$1.1 million
?0.263 million
.Jrice
assuming a direct cost passtnrougr.
less than SO.00 per gallon of gasoline
sold in the 4 counties
inerev
Assuming full recovery: 389,000 gallons/
year (8,040 barrels of oil equivalent)
savec=
Productivity
imoiovmen:
No major impact
No major impact
a
One gallon of gasoline has 125,000 3TL"s.
equivalent has 6,050,000 BTU's.
One barrel of oil
-------
EXHIBIT 16-11(2)
>t 5-ru:;ure
Compliance requirements may accelerate
the industry trend towards "nich through-
put stations (i.e., marginal operations
iTi^v c"t co sncc*r~n)
.^.-.CT tir.mg requirements (19SI)
.-.etronttmg service stations wn.-ir.
:ins constraints may be difficult m a
rev instances
Pro1em area
Oicer stations lace nigner retrcrit
costs — potential concerns are dislocations
cur ma installations
VOC emission after PACT control
21C tons per year from tank loadinc
operation. 62 tons per year at the
affected facilities
Cost effectiveness of RACT
control
S222 annualized cost/annual ton of
VOC reduction
Source:
Booz, Allen a Hamilton Inc.
-------
BIBLIOGRAPHY
National Petroleum News Fact Book 1978, McGraw-Hill.
The Economic Impact of Vapor Recovery Regulations on the Service
Station Industry, Department of Labor, OSHA, C.79911, March, 1978 .
County Business Patterns 1976: South Carolina, U.S. Department
of Commerce, CBP-76-12, 1978.
Economic Impact of Stage II Vapor Recovery Regulations: Working
Memoranda, EPA-450/3-76-042, November, 1976.
Federal Highway Administration: Mr. Ken Toda.
Table MF 25: Private and Commercial Highway Use of Special
Fuels by Months, 1977.
Table MF 26: Highway Use of Gasoline by Months, 19 77.
Table MF 21: Motor Fuel Use, 1977.
Regulatory Guidance for Control of Volatile Organic Compound
Emissions from 15 Categories of Stationary Sources,
EPA-905/2-78-001, April, 1978.
Air Pollution Control Technology Applicable to 26 Sources of
Organic Compounds, U.S. EPA, May 27, 1977.
A Study of Vapor Control Methods for Gasoline Marketing Operations,
PB-246-088, Radian Corporation.
Reliability Study of Vapor Recovery Systems at Service Stations,
EPA-450/3-76-001, March, 1976.
Technical Support Document, Stage I Vapor Recovery At Service
Stations, Draft, Illinois Environmental Protection Agency.
South Carolina EPA, Confidential Petroleum Marketing Survey Form.
Mr. Sam Boylston, Motor Transport Association of South Carolina.
National Tank Truck Carriers Conference, Mr. C. Harvison.
South Carolina Jobber's Association: Mr. Richard DeMont Mollin.
South Carolina EPA: Mr. George Nelson.
1972 Census of Retail Trade, Area Statistics, U.S. Department
of Commerce, Bureau of the Census.
-------
Hydrocarbon Emission Control Strategies for Gasoline Marketing
Operations, U.S. EPA, Contract No. 68-01-4465, September, 1977,
Draft.
Design Criteria For Stage I Vapor Control Systems Gasoline
Service Stations, U.S. EPA, Research Triangle Park, North
Carolina, November, 1975.
Mr. Kenneth H. Lloyd, EPA, Research Triangle Park, North Carolina.
Mr. Vic Rasheed, Greater Washington/Maryland Service Station
Association.
Survey of Gasoline Tank Vehicles and Rail Cars, EPA Contract
No. 68-02-2606, Draft, November, 1968.
Cost Data-Vapor Recovery Systems at Service Stations, PB-248-353,
September, 1955.
Human Exposure to Atmospheric Benzine, EPA Contract No. 68-01-4314,
October, 19 77.
Systems and Costs to Control Hydrocarbon Emissions from Stationary
Sources, PB-236-921, EPA, September, 1974.
Revision of Evaporative Hydrocarbon Emissions from Stationary
Sources, PB-267-659, August, 1976.
-------
17.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
USE OF CUTBACK ASPHALT
-------
17.0 THE ECONOMIC 'IMPACT OF
IMPLEMENTING RACT FOR
USE OF CUTBACK ASPHALT
This chapter presents a detailed analysis of the impact
ot RACT for use of cutback asphalt in the State
cr Scuun -arolina and also for the 5 county non-attainment areas.-
The impact of RACT is investigated in six sections as follows.
Specific methodclc-quality of estimates
Industry statistics
The technical situation in the industry
Cost and VOC reduction benefit evaluations for
the most likely RACT compliance techniques
Direct economic implications
Selected secondary 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 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining
estimates of:
Industry statistics
voc emissions
Control of VOC emissions
Cost of controlling VOC emissions
Economic impact of emission control
Data quality
for the use of cutback asphalt in South Carolina.
Presently, only 5 counties are classified as non-attainment areas.
They are: Berkeley, Charleston, Lexington, Richland and York. For
purposes of this analysis, however, the focus is wider and encom-
passes potential impacts across the entire state.
17-1
-------
17.1.1 Industry Statistics
Industry statistics on the use of cutback asphalt were
obtained from the South Carolina Department of Health and
Environmental Control. 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 South
Carolina 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.
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 infor-
mation on: costs for cutback asphalt and asphalt emulsions,
the feasibility of using emulsions in place of cutback
asphalt and the associated cost implications. Other sources
of information were "Mineral Industry Surveys," U.S. Bureau
of Mines; "Magic Carpet, the Story of Asphalt," The 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 Cdntrol
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:
Control of Volatile Organic Compounds From the Use of Cutback Asphalt,
EPA-450/2-77-037, pp. 1-3.
17-2
-------
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 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.
17.1.6 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.
17-3
-------
EXHIBIT 17-1
U.S. Environmental Protection Agency
DATA QUALITY
A B C
Extrapolated Estimated
Study Outputs Hard Data Data Data
Industry statistics •
Emissions •
Cost of emissions
control •
Statewide costs of
emissions control •
Economic impact •
Overall quality of
data •
Source: Booz, Allen & Hamilton Inc.
-------
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 South Carolina.
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 South Carolina. Although some cutback
asphalt may be produced in South Carolina, the production
industry is not the focus of this study since RACT requires
control of the use of cutback asphalt. Sixteen thousand
three hundred fifty-nine tons of cutback asphalt were
purchased in South Carolina in 1977 at a value of $1.5
million. The value is based on an estimated average price
per gallon of $0.36.
Though the uses of cutback asphalt in South Carolina
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.
17-4
-------
It is estimated that statewide approximately 7501 people
are engaged in operations where cutbacks can be used. Of
these an estimated 160 are employed in the non-attainment
county areas.
17.2.3 Comparison to Statewide Economy
The value of shipments of cutback asphalt to the state-
wide value of wholesale trade in South Carolina is estimated
to be less then 0.02 percent.
17.2.4 Demand for Cutback Asphalt
In the 1920's and 1930's, the increasing sales of
automobiles stimulated highway construction. The need for
low-cost pavement binders which provided weather resistance
and dust-free surfaces became apparent during this building
cycle. Cutback asphalts emerged to fill this need. After
World War II, the sale of cutback asphalts remained at an
almost constant level. Since 1973, the use of cutback as-
phalt 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 per-
cent more expensive per gallon than asphalt emulsions. In
recent years, this differential has been negligible; how-
ever, in the past two years the historical price disadvan-
tage has begun to reemerge.
Statewide, approximately 3,750 people were employed in highway
and street construction. It is assumed that the number of people
employed in cutback and emulsion applications is proportional to
the 3,750 people. The factor of proportionality is the ratio of
1977 state sales of cutbacks and emulsions to 1977 state sales of
all petroleum asphalts and road oils. At an estimated 20 percent,
employment is approximately 750. See County Business Patterns
1976: South Carolina, U.S. Department of Commerce CBP-76-12,
1978, p. 3.
Source: U.S. Department of Commerce, Bureau of the Census
17-5
-------
EXHIBIT 17-2
U.S. Environmental Protection Aqency
HISTORICAL NATIONAL SALES OF ASPHALT CEMENT,
CUTBACK ASPHALT AND ASPHALT EMULSIONS
YEAR
ASPHALT CEMENT
Percent
Use of of Total
(000 of tons)
CUTBACK ASPHALT
Percent
Use of of Total
(000 of tons)
ASPHALT EMULSIONS TOTAL
Percent
Use of of Total Use of
(000 of tons
1970
19 71
1972
1973
19 74
1975
1976
17,158
17,612
18,046
20,235
19,075
16,324
16,183
72.7
73.8
74.2
74.8
77.4
75.7
75 .3
4,096
3,994
3,860
4 ,220
3, 359
3,072
3,038
17.4
16.7
15.9
15.6
13.6
14.2
14.2
2,341
2,275
2,399
2,585
2 , 208
2,197
2,254
9.9
9.5
9.9
9.6
9.0
10.1
10.5
23,594
23,821
24,305
27,040
24 ,642
21,593
21,474
Source: U.S. Bureau of Mines
-------
The comparison between cutbacks and emulsions is some-
what different when one looks at quantity requirements.
Though technically interchangeable in many applications, it
is typically the case that more emulsion must be applied
than cutback for an identical task. This is because emul-
sions have a lower asphalt content than cutbacks on a per
gallon basis. Estimates on quantity conversions (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.1
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.2
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.
17-6
-------
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 South Carolina.
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 South Carolina, cutback
asphalt is used in the construction and maintenance of
secondary roads throughout the state.
17-7
-------
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 and Non-Attainment Area Emissions
Total emissions from the use of cutback asphalt in
South Carolina during 1977 are estimated to be 3,396 tons.
But given permitted RACT exemptions on cutback curtailment,
only 611 tons are" estimated to be subject to control.-'-, i.
See Exhibit 17-3 for details.
17.3.4 RACT Guidelines and the Implications of Their
Implementation
Presently, the State of South Carolina 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 application
as a penetrating prime coat is necessary.
Representatives of the South Carolina Highway Department have in-
dicated that RACT exemptions could account for 82% of current
cutback usage. Because South Carolina began using emulsions
years ago, those cutbacks remaining in use now are primarily for
penetrating prime coat applications (75%) and maintenance patch-
ing applications (25%).
Basec5 on amount of cutback asphalt applied'in the non-attainment
counties in 1977 (source: South Carolina Department of Health
and Environmental Control).
17-8
-------
"Insert A"
Of this amount approximately 665 tons of emission are from
the five non-attainment counties. The distribution of emissions
among these counties are as follows:
Berkeley - 79 Tons
Charleston - 165 Tons
Lexington - 73 Tons
Richland - 131 Tons
York - 217 Tons
Total - 665 Tons
-------
EXHIBIT 17-3
U.S. Environmental Protection Agency
ESTIMATED HYDROCARBON EMISSIONS
FROM USE OF CUTBACK ASPHALT IN SOUTH CAROLINA
Sales of
Cutback Asphalt
(000 Tons)
Estimated
Hydrocarbon Emissions
in 1977
(000 Tons)
Estimated Non-Exempted
Hydrocarbon Emissions in 1977
(000 Tons)
Rapid Medium Slow Rapid Medium Slow
Cure Cure Cure Cure Cure Cure Total
State
3. 76
12.60
0
0.77 2.63
0
3.40
.61
a
b
Source: U.S. Department of Energy, Bureau of Mines
18 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. 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.
17-9
-------
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
m 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.
17-10
-------
17.4.2 Extrapolation to the Statewide Industry
Converting from cutback asphalts to asphalt emulsions
in the state is estimated to cost approximately $100,000
statewide and $21,000 for the five nonattainment counties.
This translates into $164 per tons of hydrocarbon emissions
reduced statewide and $173 per ton for the affected counties.
A summary of these costs is given in Exhbiit 17-4, on the
following page.
-------
EXHIBIT 17-4
U.S. Environmental Protection Agencr
COSTS IN SOUTH CAPOLINA FOR APPLY!""
RACT TO THE USE OF CUTBACK ASPHALT
F ive
Direct Cost Summar'7 5ta ucwide Count:.
Cutback asphalt used in the
state (tons per year) 16,359 3,45!:
Potential emissions reduction3 from
converting to use of emulsion asphalt
(tons per year) 611 120
b
Retraining costs $ 44,100 $ 9,300
c
Equipment modification costs $ 56,250 $ 11,900
Total one-time costs $100,360 $ 21,200
One-time costs per ton of emissions
reduced S 164 $ 176
Annualized operating cost per ton of
emission reduced 5 0.00 $ 0.00
Assumes 82% of cutback usage will be exempted from RACT
control
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 relates sales of cutbacks
to sales of cutback plus emulsions in 1977. Since the
sales of cutbacks were 16,359 short tons and those of
emulsions 67,025, the proxy ratio is about one-fifth.
Second, this proxy is multiplied by the estimated total
labor force (750) and the cost per person ($300).
Representatives of national asphalt organizations have
suggested that for every two workers there is approxi-
mately one distributor truck. This implies that 375 trucks
will need modification at a cost of $150 per truck.
Source: Booz, Allen & Hamilton Inc.
-------
17.5 ECONOMIC IMPACTS
This section discusses the economic impacts associated
with applying RACT to the use of cutback asphalt in
South Carolina. The focus is on: user cost, material
prices, demand, employment and productivity.
User Cost—The estimated one-time cost of $100,000
distributed across the state is small compared
to the $163,850,000 spent for construction and
maintenance during 1977.
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 im-
pact on price differentials in the future.
Demand—If current usage patterns prevail through
1981 when RACT is scheduled for implementation,
then the demand for cutbacks might fall off by
18 percent while the demand for emulsions rises by
4.5 percent.
Employment—No change in employment is predicted
from implementing RACT, although it will be
necessary to retrain approximately 150 employees
in the nonattainment areas of South Carolina on the
use of asphalt emulsions and 750 employees if the
regulation is applied statewide.
Productivity—Given appropriate retraining, worker
productivity is not expected to be affected by
handling more emulsion asphalts.
17.5.1 Secondary Economic Impacts
Implementing RACT nationwide 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'anticipated that
Source: Federal Highway Administration. Of the $163,850,000,
$110,851,000 was spent on construction. This latter figure in-
cludes a small charge for depreciation on equipment.
17-12
-------
sufficient lead time exists for any supply-demand imbalance
to be redressed. Insufficient data are available to quan-
tify these potential costs in South Carolina.
*****
Exhibit 17-5 presents a summary of the findings in
this report.
17-13
-------
EXHIBIT 17-5(1!
U.S. Environmental Protection Agency
SLMMAPV OF i.-_-JLCT ZCDSC* : l.'^ul'-ATiOfco
CF IMPLEMENTING ract for use of
CUTBACK ASPHALT IN THE STATE OF SOUTH CAROLINA
(NONATTAINMEXT COUNTIES)
Current Situation
Discussion
Potentially affected use
In 1ST", use of cutback asphalt was
approximately 3,200 tons in the non-
attainment counties
Indication of relative importance
of industrial sector to statewide
economy
Current industry technology
trends
1977 VOC emissions (actual)
1377 sales of cutback asphalt were
estimated to be SO.3 million in the
nonattainment counties
Most of the use of cutback asphalt is
for penetrating prime coat applications,
which are exempt
665 tons annually; 120 of which are
non-exempted
Industry preferred method of VOC Replace with asphalt emulsions
control to meet RACT guidelines
Assumed method of control to Replace with asphalt emulsions
meet RACT Guidelines
Affected Areas in Meeting RACT
Capital investment
Annualized cost
Price
Energy
Productivity
EmDlovment
Discussion
$0.02 million
No change in paving costs are expected
No change in paving costs are expected
0a
No major impact
No major impact
A saving of 1.160 barrels cf oil equivalent accrues to manufacturer,
no user. The total energy associated with manufacturing, processing
and laying cne gallon of cutback is approximately 50,200 BTUs/callon.
Fcr emulsified aspr.alts, it is 2,330 3TUs/gallon. One barrel of oil
equivalent is assumed to have 6.05 million 3TUs, and one ten cf cutback
asphalt is assumed to have 2 56 gallons.
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EXHIBIT 17-5(2)
U.S. Environmental Protect:.cr. Agency
Affected Areas in Meetina RACT
Discussion
RACT timing requirements (1981)
Problem area
VOC emission after RACT control
Cost effectiveness of RACT control
Long-range supply of asphalt emulsions
are expected to be available
Winter paving
Net VCC emission reduction is estimated
to be 120 tor.s annually
5176 annualized cost/annual ton of VOC
reduction in the first year. In subse-
quent years, the cost is SO.
Source: Booz, Allen & Hamilton Inc.
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BIBLIOGRAPHY
Control of Volatile Organic Compounds from the Use of Cutback
Asphalt, EPA-450/2-77-037, December 1977.
Air Quality and Energy Conservation Benefits from Using
Emulsions to Replace Cutbacks in Certain Paving Operations,
EPA-450/12-78-004, January 1978.
Mineral Industry Surveys: Asphalt Sales, Annual U.S. Depart-
ment of the Interior, Bureau of Mines, Washington, D.C.
Magic Carpet: The Story Of Asphalt, The Asphalt Institute,
College Park, Maryland.
Technical Support for RACT Cutback Asphalt, State of Illinois
EPA.
"World Use of Asphalt Emulsion," paper presented by Cyril C.
Landis, Armak Company.
A Brief Introduction to Asphalt and Some of Its Uses, The
Asphalt Institute, College Park, Maryland.
Asphalt: Its Composition, Properties and Uses, by Ralph N.
Traxler, Rheinhold Publishing Corp., New York, 1961.
County Business Patterns 1976: South Carolina, U.S. Department
of Commerce, CBP-76-12.
Mr. Gladstone, Federal Highway Administration Statistics on
State Highway Construction and Maintenance Expenditures.
Atmospheric Emissions from the Asphalt Industry,
EPA-650/2-73-046, December 1973.
Energy Requirements for Roadway Pavements, The Asphalt Institute,
College Park, Maryland, Misc.-75-3, April 1975.
Asphalt Hot-Mix Emission Study, The Asphalt Institute, College
Park, Maryland, Research Report 75-1 (RR-75-1), March, 1975.
"Hot-Mix, Cutbacks and Emulsions" by Fred Kloiber, Natural
Asphalt Pavement Association, Special Report, November 4, 1977.
Mr. Fred Kloiber, National Asphalt Pavement Association.
Mr. Steven Patterson, U.S. Bureau of Mines.
Mr. Charles Owens, Asphalt Institute.
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Mr. Frank Kerwin, U.S. EPA.
Mr. George Nelson, South Carolina EPA.
South Carolina Department of Transportation,
Mr. Buddy Keller, Assistant Construction Engineer,
Mr. Crawford, State Laboratory.
Mr. Ogden Babson, South Carolina Asphalt Paving Association.
Mr. Vaughan Marker, The Asphalt Institute, College Park, Maryland.
"Proposed Amendments to Pollution Control Regulations,"
Illinois EPA.
The Asphalt Handbook, The Asphalt Institute, April 196 5.
Mr. Charles Maday, U.S. EPA.
Mr. Terry Drane, Emulsified Asphalt, Inc.
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TECHNICAL REPORT DATA
-n"
904/9-79-0 3 2
13 =
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