REGULATORY  IMPACT ANALYSIS OF CONTROLS ON
      ASBESTOS AND ASBESTOS PRODUCTS
                  FINAL REPORT
                    VOLUME I
               TECHNICAL REPORT
                    Prepared for:
                 Christine Augustyniak
               Office of Toxic Substances
           U.S. Environmental  Protection Agency
                   January 19, 1989

-------
REGULATORY IMPACT ANALYSIS OF CONTROLS ON
      ASBESTOS AND ASBESTOS PRODUCTS
                  FINAL REPORT
                     VOLUME I
                TECHNICAL REPORT
                     Prepared for:
                  Christine Augustyniak
                Office of Toxic Substances
            U.S.  Environmental  Protection Agency
                     Prepared by;
                    ICf Incorporated
               Fairfax Virginia 22031-1207
                    January 19, 1989

-------
                        DISCLAIMER
     This document is a draft.   It has not been released
formally by the Office of Toxic Substances, U.S.
Environmental Protection Agency.   It is being circulated
for comments on its technical merit and policy
implications.

-------
                               TABLE OF CONTENTS






                                                                         PAGE







EXECUTIVE SUMMARY		. ,     ES-1




CHAPTER I - -  BACKGROUND ,	      1-1




     A.  Asbestos Background	      1-2




     8.  Asbestos Use Overview	      1-8




     C,  Nature of the Regulatory Alternatives	     I-10




CHAPTER II - - APPROACH FOR COST/BENEFIT ANALYSIS 	     II-1




     A.  Approach for Estimating Benefits	     II-1




     B.  Approach for Estimating Costs ,...,...,.....	    11-19




CHAPTER III -- DATA FOR ESTIMATING COSTS AND BENEFITS 	    III-l




     A.  Data Inputs for Estimating Benefits	..,,,,,",,.    III-l




     B.  Data Inputs for Estimating Costs	   Ill-14




CHAPTER IV - - COST/BENEFIT RESULTS	     IV-1




     A.  Costs and Benefits of Regulatory Alternatives	     IV-2




     B,  Sensitivity Analyses	    IV-16




CHAPTER V - -  REFERENCES	     V-l

-------
                                   APPENDICES
                                                                    VOLUME
APPENDIX A - - MODELS AND COMPUTATIONAL PROCEDURES	  II

APPENDIX B -- CAPITAL CONVERTIBILITY AND QUASI-RENTS
               DETERMINATION	  II

APPENDIX C -- ECONOMIC IMPACTS DATA AND ANALYSES		...  II

APPENDIX D -- COST FOR ENGINEERING CONTROLS FOR BRAKE
               MAINTENANCE/REPAIR	  II

APPENDIX E -- WELFARE EFFECTS UNDER ALTERNATIVE FIBER
                SUPPLY CONDITIONS	  II

APPENDIX F -- ASBESTOS PRODUCTS USE AND SUBSTITUTES SURVEY  	 Ill

APPENDIX G -- SENSITIVITY ANALYSES	  IV
                                        11

-------
                                LIST OF TABLES

TABLE                                                                 PAGE

Executive Summary


ES-1.  List of Asbestos Products	      ES-3

ES-2.  Summary of Costs and Benefits of Alternatives ,,,,,,,	     ES-10

ES-3.  Sensitivity Analysis for Declining Substitute Prices
        and Alternative Asbestos Exposure Assumptions Using
        Regulatory Alternative J	     ES-15


Chapter.—!
1-1.  Asbestos Fiber Consumption and Final Production for
       Asbestos Product Categories (1985) .,,..,»	      I-11
ChapterIII
III-l.  Exposure Levels and Number of Persons Exposed to Primary
         Manufacturing Products for Occupational and
         Nonoccupational Settings	 .      III-3

III-2.  Exposure Levels and Number of Persons Exposed to Secondary
         Manufacturing Products for Occupational and
         Nonoecupational Settings	      Ill-4

III-3.  Exposure Levels and Number of Persons Exposed to
         Installation of Products for Occupational and
         Nonoccupational Settings	      Ill-5

III-4.  Exposure Levels and Number of Persons Exposed to
         Use of Products for Occupational and
         Nonoccupational Settings	      Ill-6

III-5.  Exposure Levels and Number of Persons Exposed to
         Repair/Disposal of Products for Occupational and
         Nonoccupational Settings	      Ill-7

III-6.  Estimated Values of Lung Cancer and
         Mesothelioma Dose-Response Constants ...................     Ill-10

III-7.  Sex, Race, and Age Distribution of Exposed Populations  ,.     111-12

III-8.  Asbestos Product Market Data Used in ARCM	 .     111-16
                                       iii

-------
                                LIST OF TABLES

TABLE  '                                                                PAGE


III-9.  Baseline Growth Rates of Asbestos  Products: 1985-2000 ...     111-18

111-10. Baseline Growth Rates Products
         18, 19, 36, and 37: 1985-2000	     111-21

III-ll. Quasi-Rent Losses Associated with  an Immediate Ban
         of all Asbestos Products 	,	     Ill-22

III-12. Summary of Substitutes Information for
         Asbestos-Containing Products	     Ill-24

Chapter IV
IV-1.  Fiber Cap Schedules for Phase-down Scenarios -
        Low Decline Baseline		      IV-7

IV-2.  Summary of Costs and Benefits of Alternatives	      IV-8

IV-3.  Welfare Effects by Party for Alternative J
        (discounted at 3 percent)	     IV-12

IV-4.  Product-by-Product Costs and Benefits of
        Alternative J (costs discounted at 3 percent,
        benefits discounted at 0 percent)	     IV-13

IV-5.  Product-by-Product Costs and Benefits of
        Alternative J (costs discounted at 3 percent,
        benefits discounted at 3 percent)	     IV-14

IV-6.  Additional Occupational Exposure Assumptions for
        Primary Manufacturing	     IV-19

IV-7.  Additional Occupational Exposure Assumptions for
        Installation of Products	     IV-20

IV-8.  Additional Occupational Exposure Assumptions for
        Repair/Disposal of Products	     IV-21

IV-9.  Additional Nonoccupational Exposure Assumptions for
        Use of Products 	,				....     IV-23

IV-10. Sensitivity Analysis for Declining Substitute Prices
        and Alternative Asbestos Exposure Assumptions Using
        Regulatory Alternative J	     IV-24
                                        IV-

-------
                                LIST OF FIGURES







FIGURE                                                               PAGE




Chapter_l







1-1  U.S. and World Asbestos Markets	     1-9




ChapterII







II-1  U.S. and World Asbestos Markets	   11-22




II-2  Fiber Usage Phasedown	   11-26




II-3  Staged Ban	 .   11-32




II-4  Combination of Staged Ban and Fiber Usage Phasedown 	   II-35

-------
EXECUTIVE SUMMARY




     A,  Introduction




     Many studies have shown that individuals who are exposed to asbestos




fibers have increased risks of contracting a number of diseases, including




cancers of the lung,  the gastrointestinal tract, the lining of the lung and




abdominal cavities (mesothelioma),  and asbestosis.  Initially, these findings




were confined to environments with relatively high concentrations of asbestos




fibers; that is, workplaces where asbestos was mined or where asbestos-




containing products were produced.   More recent evidence, however, points




toward elevated risks at the lower concentrations typically associated with




nonoccupational exposure.  The most important of the diseases are lung cancer




and mesothelioma.  Over 90 percent of individuals who contract these diseases




die from them.




     Cognizant of this scientific evidence and its obligations under the Toxic




Substances Control Act (TSCA), the Environmental Protection Agency (EPA) Office




of Toxic Substances has investigated a number of alternative asbestos control




strategies, ranging from controls on exposure to asbestos in certain products




and activities, to product bans and a. phase-down of asbestos fiber usage over




time.




     The purpose of this Regulatory Impact Analysis (RIA) is to identify,




quantify, and, where feasible, value benefits and costs of various regulatory




alternatives for controlling exposure to asbestos, ranging from "staged" bans




on asbestos products (i.e., bans on products at different points  in time) to




fiber phase-down options both with and without product bans.  The study




attempts to meet four goals:  (1) to identify properly the potential benefits




and costs of asbestos controls;  (2) to review some of the key relationships and




issues that would affect the magnitude of the benefits and costs  of the






                                      ES-1




                  * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
controls; (3) to project the expected benefits and costs of asbestos controls,




and (4) to assess the distribution of the costs and benefits.   This study will




identify explicitly the logic behind the development of benefit and cost




projections, thereby allowing the public to make a more informed judgment




concerning potential benefits and costs of asbestos controls.




     This RIA for asbestos and asbestos products has been revised to




incorporate the comments received from the public concerning the August 1985




version.  Because of this, the current version of the RIA reflects the efforts




the Agency has devoted to (1) improving and updating the asbestos product




markets information used in the analysis, (2) revising the cost simulation




model, and (3) refining the exposure estimates for some products and




activities.  All of these efforts to improve the analysis are in response to




comments of reviewers both in the Agency and among the public.




     The regulatory alternatives examined in this RIA represent a range of




possible options for controlling asbestos exposures.  No single alternative,




however, is identified as the preferred regulatory alternative.  Instead, these




alternatives were selected to assist In the Agency's regulatory options




selection process.  Thus, the costs and benefits of the regulatory alternatives




presented in this RIA are designed to provide quantitative and qualitative




Information on the possible range of costs and benefits of various different




types and timing of options.  Using this information, the Agency can also




examine combinations of control alternatives based on the results of the other




regulatory alternatives.




     This RIA estimates the costs and benefits of a number of alternatives for




reducing or eliminating exposure to asbestos.  These alternatives are specified




in terms of product bans, phase-downs of fiber usage, and selective exemptions




of certain products.  Table ES-1 lists the product category number and






                                      ES-2




                  * * *  DRAFT  -- DO NOT QUOTE OR CITE  * * *

-------
         TABLE ES-1. LIST OF ASBESTOS PRODUCTS
Product #              Product Category
   1.      Commercial Paper
   2,      Rollboard
   3.      Millboard
   4.      Pipeline Wrap
   5,      Beater-add Gaskets
   6.      High-grade Electrical Paper
   7.      Roofing Felt
   8,      Acetylene Cylinders
   9.      Flooring Felt
  10.      Corrugated Paper
  11,      Specialty Papers
  12.      Vinyl-Asbestos Floor Tile
  13.      Asbestos Diaphragms
  14.      Asbestos-Cement Pipe
  15.      Flat A-C Sheets
  16.      Corrugated A-C Sheets
  17.      A-C Shingles
  18.      Drum Brake Linings (OEM)
  19.      Disc Brake Pads, LMV (OEM)
  20.      Disc Brake Pads (HV)
  21.      Brake Blocks
  22.      Clutch Facings
  23.      Automatic Transmission Components
  24.      Friction Materials
  25.      Asbestos Protective Clothing
  26.      Asbestos, Thread, Yarn, and Other Cloth
  27.      Asbestos Sheet Gasketing
  28.      Asbestos Packing
  29.      Roof Coatings and Cements
  30.      Non-Roofing Coatings, Compounds, and Sealants
  31.     Asbestos-Reinforced Plastics
  32.     Missile Liner
  33.      Sealant Tape
  34.      Battery Separators
  35.      Arc Chutes
  36,     Drum Brake Linings (Aftermarket)
  37.     Disc Brake Pads, LMV (Aftermarket)
                           ES-3

        *  *  *   DRAFT  -- DO NOT  QUOTE  OR CITE   *  *  *

-------
description of each product.  Note that there are two entries for light/medium

vehicle drum and disc brakes (products 18, 19, 36, and 37), one corresponding

to the original equipment market (brakes installed on new "vehicles) and the

other to the aftermarket (replacement brakes).  In most of the regulatory

alternatives described below, these two submarkets are treated identically in

terras of the timing and nature of regulations to which they would be subject.

However,  one alternative would regulate the original equipment and aftermarket

segments of these brake markets differently, so the separation of these two

markets into the original equipment and aftermarkets is maintained throughout

the analysis.  Except where noted, however, the two segments are treated

identically.

     In terms of these product categories, the specific regulatory alternatives

examined in this RIA are as follows:

     Alternative B:

          *    Fiber Phase-Down from 1987 to 1997

          •    Bans on Products 7, 9, 12, 14, 25  (protective clothing
               and construction products, except  for A/C sheet and
               shingle) in 1987

     Al.ternatiye BX:

          •    Fiber Phase-Down from 1987 to  1997

          *    Bans on Products 7, 9, 12, 14, 25  (protective clothing
               and construction products, except  for A/C sheet and
               shingle) in 1987

          •    Products 13 and 32 (diaphragms and missile liner)
               exempt from regulation

     Alternative P:

          •    Fiber Phase-Down from 1987 to  1997

          .    Bans on Products 7, 9, 12, 14, 15, 16, 17, 25
               (protective clothing and construction products) in
               1987



                                      ES-4

                  * * *  DRAFT --DO NOT QUOTE OR CITE  * * *

-------
Alternative DX:

     •    Fiber Phase-Down from 1987 to 1997         ;

     •    Bans on Products 7, 9, 12, 14,  15, 16, 17, 25
          (protective clothing and construction products) in
          1987

     •    Products 13 and 32 (diaphragms and missile liner)
          exempt from regulation

Alternative.E:

     •    Bans of Products 7, 9, 12, 14,  15, 16, 17, 25
          (protective clothing and construction products) In
          1987

     •    Bans of Products 18, 19, 20, 21, 22, 23, 24, 36, 37
          (friction products) in 1992

AlternativeF:

     •    Bans of Products 7, 9, 12, 14,  15, 16, 17, 25
          (protective clothing and construction products) in
          1987

     *    Bans of Products 18, 19, 20, 21, 22, 23, 24, 36, 37
          (friction products) in 1992

     •    Bans of all Remaining Products in 1997.

AlternativeFX:

     m    Bans of Products 7, 9, 12, 14,  15, 16, 17, 25
          (protective clothing and construction products) in
          1987

     .    Bans of Products 18, 19, 20, 21, 22, 23, 24, 36, 37
          (friction products) in 1992

     •    Bans of all Remaining Products in 1997 except
          Products 13 and 32 (diaphragms and missile
          liner).

Alternative	G:

     •    Bans of all Products in 1987

Alternative GX:

     •    Bans of all Products except Products 13 and 32
          (diaphragms and missile liner) in 1987
                                 ES-5

             * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
     Alternative.; H:

          •    Bans  of all Products in 1992

     Alternative _,_ HX:

          •    Bans  of all Products except Products 13 and 32
               (diaphragms and missile liner) in 1992

     AlternativeI:

          •    Bans  of all Products in 1997

     AlternativeIX:

          •    Bans  of all Products except Products 13 and 32
               (diaphragms and missile liner) in 1997

     Alternative J:

          •    Bans  of Products 1,  2,  4, 7, 9, 10, 12, 15, 16,
               17, and 25 in 1987

          •    Bans  of Products 5,  18, 19, 20, 21, 22, 23, 24,
               and 27 in 1991

          •    Bans  of Products 14, 36, and 37 in 1994.


     The identification system for the alternatives were developed in a

previous version of the RIA.  To maintain continuity between versions of the

RIA, the same system of identification is used in this version.  Hence, some of

these alternatives were contained in the original version of the RIA; others

have been specified since that time in light of the cost/benefit results

obtained.  Alternatives B, D, E, and F existed in the original RIA, while

alternatives G, H, I, and J are newer alternatives developed in the process of

evaluating the costs and benefits of the various regulatory alternatives.

     Alternatives whose identifiers contain an "X" are modified versions of

other alternatives with the single added condition that two product categories

(missile liner and asbestos diaphragms) are exempted from either an asbestos

fiber phase-down or asbestos-containing product bans.  Exemption, or "X",

alternatives are specified for those alternatives in which these two product

                                      ES-6

                  * * *  DRAFT --DO NOT QUOTE OR CITE  * * *

-------
categories would otherwise be regulated (B, D, F, G, H, and I).  Finally,




Alternative J was developed based OB the cost/benefit results for the other




alternatives.  This alternative is a 3-stage asbestos product ban in which (1)




the effective ban dates are slightly modified (1987, 1991, and 1994), (2) some




of the asbestos products are not banned at any stage of the regulation,  and (3)




the original equipment market and the aftermarket drum and disc brake markets




for light/medium vehicles are regulated separately in that they are banned at




different times.




     B.  Limi tat ions o f_the_Analy. sis




     The cost and benefit estimates reported in this RIA are based on extensive




model development, detailed data collection, and intensive review of relevant




literature.  However, there are limitations to the results presented.  First,




only one source of benefits associated with reduced exposure to asbestos --




reduced cancer cases --is estimated quantitatively in this RIA.  Although




asbestos causes other health effects, the cancer risks of asbestos exposure are




well-known and well-researched and hence, are estimated quantitatively here.




This quantification of only cancer cases avoided implies that the numerical




estimates of the benefits developed in this RIA are lower bounds for the




benefits of controlling exposure to asbestos.  Asbestosis, for example, can




have a significant impact in terms of medical care expenses, reduced




productivity, and deterioration of quality of life.




     Families of workers exposed to asbestos, furthermore, are not taken into




account in this analysis, so that any health effects associated with these




secondary exposures are not included in the estimates  of benefits presented




here.  Finally, lack of exposure data for  some asbestos products prevented a




quantitative assessment of benefits for these categories even though benefits




are likely to exist for these products.  For all of these reasons, the benefits






                                      ES-7




                  * * *  DRAFT  -- DO NOT QUOTE OR CITE * * *

-------
estimates of the asbestos regulatory alternatives reported in this RIA are




quite likely to be underestimates of the true social benefits of the regulatory




alternatives.




     Similarly, the costs estimated in this RIA are likely to be overestimates




for several reasons.  First, the central case cost estimates developed in this




analysis assume no decline in the prices of asbestos substitutes as time passes




and as additional experience using these substitutes is gained.  Second, the




model for calculating the costs of the regulatory alternatives does not include




cost-reduction benefits of using lower-cost substitutes for asbestos-containing




products, i.e., asbestos-containing product substitute prices are always




assumed to be greater than or equal to the price of the asbestos-containing




product (on an equal service life basis).   Finally, the cost estimation model




assumes that in the absence of asbestos-containing products, users will switch




to non-asbestos products in proportion to the existing market shares of these




substitutes, and not proportionately more toward the lower cost substitutes.




     C.  Costs, and Benefits ofRegulatoryAlternatives




     For each of the regulatory alternatives examined in this RIA, three




different baselines of asbestos product market growth over time were modeled:




Low, Moderate, and High Declines, as outlined in Chapter III.  In addition, two




different discounting assumptions for calculating the present values of the




costs and the benefits of the regulatory alternatives were used: 3 percent




discounting for both costs and benefits (benefits are discounted from the time




of exposure in this analysis) and 0 percent discounting for benefits and 3




percent discounting for costs.  In the results presented below, costs and




benefits reflecting both sets of discounting assumptions are presented using




the "Low Decline"  baseline asbestos product growth rate assumption outlined in




the Chapter 111 of the RIA.  Selecting this baseline as the "central case"






                                      ES-8




                  * * *  DRAFT  -- DO NOT QUOTE OR CITE  * * *

-------
amounts to assuming the highest levels of asbestos use through time.  Results




for all regulatory alternatives using the other two baseline growth rate




assumptions are reported in Appendix G - Sensitivity Analyses,




     The quantitatively estimated costs and benefits of Alternatives B, BX, D,




DX, E, F, EX, G, GX, H, HX, I, IX, and J are presented in Table ES-2.  The




table lists for each alternative (1) the total domestic welfare cost imposed,




(2) the total number of cancer cases avoided, and (3) the cost per cancer case




avoided.  There are two sets of these results in the table corresponding to the




two different discounting assumption - - 3 percent for both costs and benefits




and 3 percent for costs and 0 percent for benefits.




     Table ES-2 indicates that the aggregate U.S. welfare losses attributable




to the fourteen regulatory alternatives range from a low of about $603 million




(Alternative E) to just under $7 billion (Alternative G), depending on the




regulatory alternative considered.  The lowest welfare costs  for the U.S. are,




of course, the regulatory alternatives that ban the fewest products




(Alternatives E and J) and the highest are those that ban more products  (or




phase down all fiber usage) and ban them earlier -- Alternatives B, G, and H.




Clearly, the costs of many of the regulatory alternatives are reduced




significantly by excluding certain products, such as asbestos diaphragms and




missile  liner, from both the asbestos fiber phase down and product bans, as




both  the "X" alternatives and Alternatives E and J indicate.




      The figures in the table reporting the quantitatively estimated benefits




also  indicate that the number of  cancer cases avoided changes dramatically




across  the alternatives (using the undiscounted cancer cases  avoided figures),




from  a  low of 90 cases avoided (for Regulatory Alternative IX) to a high of  329




cases avoided (Regulatory Alternative G).  To some extent, however,  the  costs




imposed by the regulatory alternatives  rise  and  fall  as  the numbers  of cancer






                                      ES-9




                   * *  *  DRAFT  -- DO NOT QUOTE OR  CITE   * * *

-------
                                  TABLE ES-2.  SfflMARY OP COSTS AND BESEFI1S OF AlfERHATIYES
                                                   (Low Decline Baseline)
*
*
,,,

s
t-rj
3-3
i
1
O
o
21 . M
O W
1-3 (L
*§ °
o
l_^j
w
o
J?3
o
i 	 |
H
M
:
Discounting Scenario Alternative
aad
Costs* and Benefits B BX D .DX

3-Costs/3~Bena£its
Discounting
fotal Cost
($1,000, OOO's}: $ 3,560 1,079 3,607 1,126

Tofcal Cancers
Avoided; 208 208 210 210

Cost Per Case
($l,000,QOO's): 17.1 5.2 17.2 5.4


3-Costs/O-Benefits
Discounting

Total Cost
($1,000, OOO's): $ 3,560 1,079 3,607 1,126

fotal Cancers
Avoided: 266 266 268 268

Cost Per Case
($1,000, OOO's): 13.4 4.1 13.5 4.2
E F FX




603 3,486 1,008


145 150 ISO


4.2 23.2 6.7






603 3,486 1,008


193 200 200


3.1 17.4 5.0
* Total domestic cost

Note:  Table contains rounded entries.

-------
                                                  TABLE ES-2. StMXSAEY OF COSTS AND BEKBFITS OF EHMPTIQR ALT1EH&TIVES

                                                                         (Low Decline Baseline)

                                                                              (continued)
o
o

25    W
O    W
<§
 O
 t-3
 O,
 H
 H
Discounting Scenario Alternative
and
Costs* and Benefits G GX H BX I
3-Costs/3-Beixafits
Discounting
Total Cost
($1,000, OQQ's): $ 6,934 2,286 4,868 1,385 3,035
Total Cancers
Avoided: 266 266 154 153 63
Cost Per Case
($1,000, OOO's): 26.0 8.6 31.7 9,1 49,3
3-Cos ts/0-Bene£i ts
Disc Glint ing
Total Cost
($1,000, OOO's): $ 6,934 2,286 4,868 1,385 3,085
Total Cancers
Avoided: 329 328 206 205 91
Cost Per Case
($1,000, OOO's); 21.1 7.0 23,7 6.8 34.1
IX J

607 748
62 122
9.7 6.1

607 748
90 167
6.7 4.5
                     *  Total domestic cost


                     Note: Table contains rounded entries.

-------
cases avoided rise and fall.  This produces a cost-per-eancer-case avoided




(using the 3 percent discount rate; for both costs and benefits) that ranges




from a low of about $4,2 million per case avoided (Alternative E) to a high of




about $49 million per case avoided (Alternative I).  Most of the overall cost-




per-cancer-case-avoided figures, however, are in the $5 million to $30 million




range,   Alternatives that exempt some asbestos products, such as diaphragms and




missile liner, from the phase down and product bans, of course, are those with




costs per case avoided in the lower end of the range, and those that do not




typically are in the higher end of the range.




     Appendix G, the sensitivity analysis, presents more detailed output from




these model runs.  Appendix G contains tables that provide tabulations of




welfare effects, by party affected and by market, under each of the three




possible baseline growth rate assumptions, and for the fourteen regulatory




alternatives.  The results for these numerous distinct scenarios are consistent




with expectations.  For example, using the High and Moderate Decline baselines




(in which the decline of asbestos products over time is more rapid than in the




Low Decline baseline) reduces both the costs of the regulatory alternatives and




their benefits.  Total costs discounted at 3 percent for these alternatives




range from a low of about $243 million (J - High Decline) to over $6 billion  (G




- Low Decline),




     Appendix G also reports some illustrative results for some regulatory




options and baseline conditions not considered in the fourteen alternatives




discussed in detail in the RIA.  One regulatory option is to require




engineering controls for some of the asbestos products to reduce asbestos




exposures.  To  illustrate this, model runs using engineering controls on




replacement brakes for drum brakes and LMV disc brake pads, rather than bans  on




these asbestos brakes, are presented in Appendix G.






                                     ES-12




                  * * *  DRAFT  -- DO NOT QUOTE OR CITE  * * *

-------
     Finally, two potentially important factors not included, in the "central




case" analysis of this RIA could have a significant impact on both the costs




and the benefits of the regulatory alternatives.  First, there is the distinct




possibility that substitutes for asbestos products might become cheaper over




time as both experience with their use and the cumulative volume of their




production increase.   Substantial empirical evidence for downward trends in




prices due to "experience" exists.  This suggests that the costs estimated in




this RIA may be higher than they ultimately will turn out to be as asbestos




product substitute costs decline over time.  Second, in many cases data on




releases of and exposures to asbestos were not available.  The "base case"




analysis in this RIA assumes that in these cases these releases and exposures




are zero, which is not likely to be true.  This assumption could impart a




substantial downward bias to the quantitative benefits estimates for the




regulatory alternatives.




     To illustrate the potential impact on the costs and benefits of 1)




allowing for declining prices of asbestos product substitute prices over time,




and 2) introducing release and exposure information where such information is




available, a number of sensitivity scenarios were estimated using Regulatory




Alternative J.   For declining substitute prices, an across-the-board decline




of one percent per year is assumed.  Although this may overestimate the rate of




decline for some products that have been in existence for some time, it may




underestimate the rate of decline for other, newer products or products with




new applications.  On balance, the across-the-board rate of decline of one




percent per year roughly corresponds to typical historical price trends for




many products, as discussed in Chapter IV of this RIA.




     For products and exposure settings in which no data were available to




estimate releases and asbestos exposures directly, two different alternative






                                     ES-13




                  * * *  'DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
exposure scenarios were developed,  as described in Appendix A-6 of this RIA.




First, where possible,  for occupational exposures in manufacturing,




installation, and repair and disposal,  exposures in these settings were




estimated based on analogous exposure settings for product for which exposure




information exists.  This was done  for one product's manufacturing stage, eight




products' repair and disposal stage,  and nine products'  installation stage.




The basic rationale for this procedure is that similar activities involving




roughly similar exposure settings and concentrations are likely to result in




similar exposures.




     In some non-occupational exposure settings for which data did not 'exist




but in which exposures are likely,  one percent of the asbestos content of the




product was assumed to be released per year over the life of the product.




These releases would be caused by normal weathering of products or by various




activities, such as cutting, sawing,  and sanding, that occur to the products in




the course of their use.




     Table ES-3 tabulates the results of these sensitivity analyses using




Regulatory Alternative J (the 3-stage product ban at dates 1987, 1991, and




1994, exempting a number of products such as missile liner and diaphragms,




regulating original equipment and aftermarket drum and disc brakes separately).




The table lists the total costs, total cancer cases avoided, and the implied




cost per cancer case avoided, using  (1) both the 3 percent discount rate for




both costs and benefits and the alternative discounting  scenario of 0  percent




for benefits and 3 percent for costs, and (2) the Low Decline baseline.  Five




distinct scenarios are presented: 1) the base case presented above for




Regulatory Alternative J, 2) declining substitute prices alone, 3) additional




occupational exposure  assumptions, 4) additional non-occupational exposure












                                     ES-14




                   * *  *  DRAFT  -- DO NOT QUOTE OR CITE   * * *

-------
                                 TABLE ES-3:  SE8SITIVI1X ANALYSIS FOR DECLIHIHG SUBSTITUTE ERICES AHB ALTERNATIVE
                                               ASBESTOS EXPOSURE ASSUMPTIONS OSIBS BIGOLAIGRY ALTERNATIVE J
                                                                   (Low Decline Baseline)
*
*
*
o
f> '
»3j
H
1
3
a
°
s; w
O w
H <
)_t
a ^
o
w
o
£0
o
M
w
^
*
*
Dlscotmting Scenario
and
Costs* aftd Benefits
3-Costs/3-Benefits
Piscaijnt.ing
Total Cost
($l,000,000's):

Total Cancers
Avoided :
Cost Per Cass
{$l,000,000's):

3-Costs/O-Bensflts
Discoimtiil^

Total Cost
($l,000,000's):

Tptal Cancers
Avoided:
Cost Per Case
($1,000,000*8):

Declining Additional Additional All
Base Case Substitute Prices** Occupational Exposure Honoccupational Exposure Sensitivity



$ 748 510 748 748 510


122 122 153 177 209

6.1 4.2 4,9 4.2 2,3





748 $ 510 748 748 510


167 167 208 240 281

4.5 3.1 3.6 3.1 1,8

* Total domestic cost
** All substitute prices assumed to decline at 1 porcent per year

Hote; Table contains rounded entries.

-------
as strap tions, and 5) declining  substitute prices  and both sets  of additional




exposure assumptions simultaneously,




     As the figures in the table  indicate, allowing for a decline of  all




asbestos product substitute prices  at a rate of  one percent per year  reduces




the  estimated costs by almost  one-third.  Because  it  is the difference between




the  asbestos product price and the  cost of substitutes  that is counted as  a




cost in the consumer surplus losses, not the absolute level of the prices  of




substitutes, even moderate declines over time  of the  prices of substitutes can




produce fairly large reductions in  the costs of  banning asbestos products.




     The added occupational exposures, as the  table indicates, suggest that an




additional 41 cancer cases  (undiscounted) might  be avoided by Alternative  J if




the  additional occupational exposures assumed  are  accurate.  An even  larger




number of cancer cases,  some 73 additional cases,  might be avoided by this




alternative if the additional  non-occupational exposures developed are




accurate.  Costs and benefits  allowing for both  declining substitute  prices




over time and the two additional  sets of exposures are shown in the final




column of the table,  As these figures indicate, the  impacts of each  of  the




three sensitivity assumptions  are independent  and  additive, at least  for this




regulatory alternative.   That  is,  the decline  in costs for this combination of




sensitivity assumptions  Is  the same as for the declining substitutes  prices




alone scenario, and that the  increased benefits  for this scenario equal  the sum




of  the increased benefits for  the two benefit-side sensitivity analyses




conducted independently.




     Finally, the cost per cancer case avoided (using the 3 percent discounting




for  both costs and benefits)  falls  from  the base case level of $6 million to




$2.5 million for all  three sensitivity assumptions combined.  Again,  although




.these are sensitivity analyses, on the exposures side the assumptions






                                      ES-16




                  * * *   DRAFT -- DO  NOT QUOTE OR CITE  * * *

-------
concerning added exposures to asbestos are intended to address lack of data --




exposure settings in which exposures are believed to occur, but for which data




do not exist.   On the costs of substitutes side, the assumption of a 1 percent




decline in all substitute prices is illustrative only.  However, for many




substitute products, over time costs and prices may well decline as accumulated




production and manufacturing experience make these cheaper to produce and to,




use in place of asbestos products.
                                     ES-17




                  * * *  DRAFT  -- DO NOT QUOTE  OR CITE   *.* *

-------
I.  BACKGROI31D




     Asbestos is a naturally occurring substance applied in a wide variety of




industrial uses because of its desirable properties and because it can be




produced at prices competitive with those of available substitutes.  Exposure




to asbestos dust has been shown to increase significantly an individual's risk




of contracting a number of potentially serious diseases.




     The Toxic Substances Control Act (TSCA) of 1976 requires the U.S.




Environmental Protection Agency (EPA) to evaluate toxic substances such as




asbestos and to determine if they pose unreasonable risks to health or the




environment.   The unreasonable risk determination is based on a comparison of




the costs of controlling the risk against the benefits of controlling that




risk.  The Office of Toxic Substances (OTS) has performed a preliminary




evaluation of the risks posed by asbestos products and has determined that all




uses of asbestos products may pose an unreasonable risk due to the potential




for exposure to asbestos throughout the life cycle of the asbestos products;




that is, the mining, milling, manufacturing, processing, use, and disposal of




the asbestos product.  Therefore, all uses of asbestos should be controlled as




long as control costs are "reasonable" relative to the risks posed.




     The purpose of this B.IA is to identify, quantify, and, where feasible,




value benefits and costs of various regulatory alternatives for controlling




exposure to asbestos, ranging from "staged" bans on asbestos products (i.e.,




bans on products at different points in time) to fiber phase-down options both




with and without product bans.  The RIA attempts to meet four goals:  (1) to




identify properly the potential benefits and costs of asbestos controls;  (2) to




review some of the key relationships and issues that would affect the magnitude




of the benefits and costs of the controls;  (3) to project the expected benefits




and costs of asbestos controls, and  (4) to assess the distribution of the costs






                                      1-1




                   * * *  DRAFT --  DO NOT QUOTE OR CITE  * * *

-------
and benefits.  This study will identify explicitly the logic behind the




development of benefit and cost projections, thereby allowing the public to




make a more informed judgment concerning potential benefits and costs of




asbestos controls.




     Finally, this RIA is designed primarily to provide data and results for




use in the process of assessing alternative asbestos control strategies.  Thus,




the specific regulatory alternatives discussed in this document are intended




primarily to guide the options selection and development process by providing




information on a wide variety of regulatory alternatives,  By comparing results




of the different scenarios discussed here, the costs and benefits of




alternative regulatory strategies can be assessed,




     A.  AsbestosBackground




     Since 1900, it has become increasingly evident that exposure to asbestos




dust can significantly increase an individual's risk of contracting diseases,




including cancers.  Such diseases frequently end in death, and when they do




not, activity is reduced as respiratory function is restricted.  Initially, the




findings on the hazards of asbestos were confined to oceupationally exposed




individuals, but more recent evidence points to the likelihood that even low




exposures of the non-oceupationally exposed are potentially hazardous.  In




response to such information, the U.S. Government has taken steps to reduce




human exposure to asbestos.  Although asbestos use is declining in the United




States, it is still used in a variety of applications and asbestos dust is




still being released into the environment.




     The only method of completely removing these risks is to remove asbestos




from the marketplace by eliminating the asbestos products, by eliminating the




asbestos fiber used to produce these products, or both.  Thus, one advantage of




a combined ban and phase-down approach is  that selected products can be






                                      1-2




                   * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
eliminated quickly with a ban, and all others can be eliminated over time




through the fiber phase-down rule.




          1.   HlstQ.rical Peifsgective




          The unique physical properties of asbestos fiber have made it an




important component in many diverse manufacturing activities.  Used since the




first millennium B.C., asbestos became increasingly important after 1850.




During the 20th century, however, evidence of the adverse health effects




associated with asbestos exposure at all stages of production and consumption




has been mounting.




     Beginning in 1900 with the first autopsy report of pulmonary fibrosis in




an asbestos worker, asbestos has been linked with numerous ailments, including




asbestosis, a chronic fibrotic lung disease caused by asbestos fiber




inhalation; malignant mesothelioma, a cancer of the pleura or peritoneum;




bronchial carcinoma (lung cancer); and cancers of the gastrointestinal tract.




     Since the initial asbestosis report in 1900, awareness-of potential




dangers of asbestos has grown, albeit slowly.  High lung cancer rates in




asbestosis victims were first observed in 1935.  The tie between asbestos and




malignant mesothelioiaa was documented in 1953.  In 1960 it was reported that,




in addition to miners, residents  of asbestos mining towns are prone to




mesothelioma, indicating that even very brief exposure to asbestos may pose




health risks.




     Increased knowledge of the effects of asbestos on individuals has




precipitated two types of governmental response:  enactment  of compensation




laws, and promulgation of various regulations governing asbestos use.  As early




as 1913, asbestos-related illness was included by three States under workman's




compensation laws.  By 1979, as a result of statutory extensions, 90 percent of




the work force was covered by such provisions.






                                      1-3 '




                   * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
     Federal regulations implemented during the past decade have restricted




worker and consumer exposure to asbestos fibers.  However, some of the more




recent medical studies imply that the current asbestos problem has a somewhat




different focus than previously believed.  In the past, Federal regulations




concerning asbestos worker safety and worker's compensation laws covering




asbestos-related disease addressed the problems of a relatively small group of




workers experiencing high levels of asbestos exposure.  Evidence now indicates




that low-level asbestos exposure in both occupational and nonoccupational




settings is also a problem.  However, while evidence of the health problems




associated with asbestos accumulates, asbestos production and use continue, due




mostly to its relative cost advantage in some areas of manufacturing.




          2,  HistoryofAsbestos Regulation




          Federal regulatory action on asbestos has taken a variety of forms.




Regulations have been promulgated by the EPA, Consumer Product Safety




Commission (CPSC),  Department of Transportation (DOT), Food and Drug




Administration (FDA), Mine Safety and Health Administration (MSHA), and the




Occupational Safety and Health Administration (OSHA).




     In 1972, OSHA promulgated regulations to reduce worker exposure to




asbestos dust in occupational settings (37 FR 11318).  These regulations




mandated introduction of new materials handling systems and other measures to




limit the maximum level of airborne asbestos fibers in the workplace to




5 fibers/cubic centimeter  (f/cc) of air  initially, with reduction to 2 f/cc of




air by 1976.




     In 1980, the National Institute for Occupational Safety and Health




(NIOSH), which acts as advisor to OSHA,  recommended a twenty-fold decrease in




the maximum asbestos-fiber-exposure limit permissible in  the workplace.  NIOSH




suggested increased use of asbestos substitutes and implementation of more






                                      1-4




                   * * *  DRAFT --  DO NOT QUOTE OR CITE  * * *

-------
extensive medical testing procedures.  Employers were encouraged to report




aggregate medical information to their employees and to arrange transfers for




asbestos workers with respiratory disease to lower exposure jobs.  In addition,




further regulations to protect all workers exposed to asbestos and additional




rules for air sampling were recommended for asbestos product manufacturers,




     Recently, OSHA issued a final rule implementing many of these




recommendations and lowering the workplace standard to 0.2 f/cc of air as an 8-




hour time-weighted average (51 FR 22612).  In 1974, MSHA prescribed maximum




exposure levels to asbestos dust for workers in domestic mines of 5 f/cc of air




(39 FR 24316).  In 1978, this requirement was lowered to 2 f/cc (43 FR 54064),




     Under the authority of the Consumer Product Safety Act (CPSA, 15 U.S.C.




2051), the CPSC has issued rules banning consumer patching compounds containing




respirable asbestos (16 CFR Part 1304) and artificial emberizing materials




containing respirable asbestos (16 CFR Part 1305),  The GPSC took those actions




based on findings that the use of those products in the household would result




in increased risk of cancer.  Earlier, the Food and Drug Administration under




the Federal Hazardous Substances Act  (FHSA, 15 U.S.C. 1261) banned "general use




garments containing asbestos other than garments having a bona fide application




for personal protection against thermal injury and so constructed that the




asbestos fibers will not become airborne under reasonably foreseeable




conditions of use" (16 GFR 1500.17).  The FHSA is now administered by the CFSC.




     In 1980, CPSC issues a general order requiring persons to furnish




information on the use of asbestos in certain consumer product categories.




CPSC has also measured potential consumer exposure to asbestos from such




products as asbestos millboard, asbestos paper products, and stove door




gaskets.  In 1986, CPSC issued labeling requirements for "household products




containing intentionally added asbestos that, under any reasonably foreseeable






                                      1-5




                   * * *  DRAFT --  DO NOT QUOTE OR CITE  * * *

-------
conditions of handling and use are likely to release asbestos fibers" (51 FR




33911, September 24, 1986).




     EPA has undertaken regulatory action on asbestos under the Clean Air Act,




the Clean Water Act, and TSCA,  In 1971, under the authority of the Clean Air




Act, EPA designated asbestos a hazardous air pollutant.  On April 6, 1973 (38




FR 8820), EPA promulgated the national emission standard for asbestos.  The




standard prohibited visible emissions from asbestos mills and from nine




different manufacturing industries, specified certain work practices for




demolition of structures that contain friable asbestos, limited to less than




1 percent the asbestos content of spray-on materials used for certain




insulation applications,  and prohibited most uses of asbestos tailings for




surfacing roadways.




     The asbestos NESHAP regulation has been revised several times.  On October




14, 1975 (40 FR 48292), it was revised to prohibit all uses of asbestos-




containing waste and asbestos tailings in road construction.  Regulation of




demolition and renovation was expanded, and the "no visible emissions"




requirement was extended to additional asbestos-using manufacturers.  The




revisions also dealt with waste disposal requirements  for asbestos mills and




manufacturing facilities.  Furthermore, the regulation prohibited insulating




with either friable, molded insulating materials or with wet-applied insulating




materials that become  friable when dry.  Revised in 1977 and again  in 1978, the




regulation currently prohibits visible emissions from milling, manufacturing,




and asbestos waste  disposal activities  (43 FR 26372) .  It also prohibits the




use of asbestos-containing materials for surfacing roadways and provides work




practices guidelines in demolition and renovation operations.




     The 1978 decision by  the' U.S. Supreme Court in Adaiao Wrecking  Company vs.




United States held  that the work practice provisions in  the asbestos standard






                                      1-6




                   * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
were not emission standards and that the Clean Air Act Amendments of 1970 did




not empower EPA to issue non-emission (e.g., work practice) standards.




However, Congress acted to broaden EPA's Authority by amending Section 112 of




the Act, and EPA in 1984 repromulgated the CAA rule  (49 FR 13658).  The 1977




Amendments allow EPA to promulgate design, equipment, and operational standards




to control hazardous emission sources where a numerical emission limit is not




feasible.  Although the 1977 Amendments allowed promulgation of non-emission




standards, they did not specifically authorize enforcement of these standards.




The question of enforceability of non-emission standards, in general, was




resolved through passage in 1978 of the Health Services Research, Health




Statistics, and Health Care Technology Act.  This act equated design,




equipment, work practice, and operational standards  with emission standards,




thereby allowing EPA to enforce both emission and non-emission standards.




     In 1973, EPA cited asbestos as a potential source of water pollution  (38




FR 22606).  Effluent limitation guidelines  for asbestos manufacturing were




promulgated in 1974 and 1975  (39 FR 7528  and 40 FR 1874).




     As mentioned earlier, TSCA provides  a  broad range of alternative control




options that EPA might exercise in its  efforts to  safeguard  the environment




from toxic substances.  Under Section 6 of  TSCA, EPA published a  rule May  27,




1982 (47  FR 23360), requiring inspection  of public and private primary and




secondary schools in the United States  to sample friable material to  determine




whether or not it contained asbestos.   The  schools also were required to notify




any parent-teacher  organizations of the inspection results and  to educate  their




employees on methods of  reducing the risks  of  exposure.




     In  1986, President Reagan  signed  into  law the Asbestos  Hazard Emergency




Response  Act  (AHERA), which enacted Title II of  the  Toxic  Substances  Control




Act  (TSGA).  Title  II  requires  EPA to  promulgate regulations requiring the






                                       1-7




                   * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
Identification and. abatement of asbestos hazards in the nation's schools and to




develop a model accreditation plan for persons who inspect for asbestos, who




develop management: plans for asbestos abatement, and who perform asbestos




abatements.  On October 30, 1987, EPA promulgated rules requiring every school




district to inspect every school building for friable and non-friable asbestos




and to file a management plan for every school building by October 12, 1988 (52




FR 41826, October 30, 1987).




     In 1986,  EPA promulgated a rule under Section 6 of TSCA to extend the




protection of the OSHA Asbestos Standard to state and local employees who




engage in asbestos abatement and who are not covered by and OSHA-approved state




plan or equivalent state regulations (51 FR 15722, April 25, 1986).   (The OSHA




act does not cover state and local employees.)  In 1987, EPA amended  to rule to




make it consistent with OSHA's regulations, which had been recently revised (52




FR 5618, February 25, 1987),




     On July 30, 1982, EPA also published a rule under Section 8(a) of TSCA




requiring manufacturers, processors, and importers of asbestos to make detailed




reports to EPA  (47 FR 33198).  The rule required data on worker  exposure to




asbestos; the quantity of asbestos and asbestos products manufactured,




imported, and exported; and waste and pollution control equipment.  Some of the




data used in this analysis were received by EPA in response to the asbestos-




reporting rule.




     B.  Asbestos UseOverview




     Asbestos fibers have been used  in the manufacture of a variety of products




intended for Industrial and consumer use.  The concentration of  fiber within




the final product depends  on the application, but all products are formulated




according to the diagram in Figure 1-1.  As illustrated, asbestos fiber  from




domestic or imported sources (in 1985, approximately  92 percent  of the  asbestos






                                      1-8




                   * * *  DRAFT --  DO NOT QUOTE OR CITE  * * *

-------
              FIGURE 1-1.  U.S. AND WORLD ASBESTOS MARKETS
o
o
o
25
s
O
O
SO
O
H
H
Domestic
Miners &
Millers
Foreign
Miners &
Millers
                               Foreign
                               Secondary
                               Processors
                                        Foreign
                                        Consumers
             Export of
             Mixtures
Export of
Products
                     Domestic
                     Primary
                     Processors
                          Domestic
                          Secondary
                          Processors
             Domestic
             Consumers
Import
 of
Fiber
Import of
Mixtures
Import of
Products
                                                  Foreign
                                                  Primary
                                                  Processors
                                                           Foreign
                                                           Secondary
                                                           Processors

-------
fiber consumed in the U.S. was imported from Canada) is mixed with other

ingredients by a "primary processor" to form an asbestos mixture.   This mixture

is then processed further, by a "secondary processor" to form a product that

can be used in one or many applications.   It is important to note  that the

output of the primary or secondary processor can be exported or imported and

that final products come from many sources.

     In 1981, the production of asbestos-containing goods was distributed among

the thirty five product categories identified in Table 1-1,  By 1985,  however,

production in some of these areas had ceased and fiber consumption (including

imports) was reported as zero.

     Table 1-1 also reports fiber consumption for all of the product categories

that continued to be produced in 1985 and reports the output of final products

in appropriate units.  The number of firms producing asbestos-containing

products between 1981 and 1985 declined, with only 180 primary processing

plants producing in 1985 compared to 210 in 1981.

     C,  NatureoftheRegulatory Alternatives

     Despite the declining U.S. usage of asbestos fiber during the past years,

continued uncontrolled use of asbestos poses a substantial risk to both workers

and the population at large.  Hence, a number of different regulatory

alternatives for controlling exposures to asbestos were considered in this

Regulatory Impact Analysis.  These  include:

          •    bans of certain asbestos-containing products;
          •    phase-downs of asbestos use; and
          •    combinations of these two approaches.

     Product bans are a direct method of avoiding exposures  to asbestos.  This

form of regulation typically makes  the most sense if  (1) substitutes for

asbestos or  for the product itself  are available at reasonable cost, and  (2)

cost effective means for  reducing exposure are not known or  are not


                                      1-10                             *

                   * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
TABLE 1-1.  ASBESTOS FIBER CONSIMPTIQN AND FIHAL ERODUCflON FOR ASBESTOS PSODBCT CA1EGQSISS
  TSCA
             Product
             Category
Asbestos Fiber
   Consumed
 (short tons)
Production
  Volume
Kuniber of
  Plants
1 Cotrmercial Paper
2 Eollboard
3 Millboard
4 Pipeline Wrap
S Beater-Add Gaskets
6 High Srade Ilsotrical Paper
? Soofing felt
8 Acetylene Cylinders
9 Flooring Felt
10 Corrugated Paper
11 Specialty Paper
12 V/A Floor Tile
13 Asbestos Diaphragms
14 A/C Pipe
IS A/C Sheet, Flat
16 A/C Sheet, Corrugated
17 A/C Shingles
18 Drum Brake Linings (OEM)
19 Disc Brake Pads, LM7 (OEM)
20 Disc Brake Pads (H?)
21 Brake Blocks
22 Clutch Facings
23 Automatic Trans. Components
24 Friction Materials
25 Asbestos Protective Clothing
26 Asbestos thread, etc.
27 Sheet Gaskets
28 Asbestos Packing
29 Soof Coatings
30 Son-Eoofing Coatings
31 Asbestos-Reinforced Plastics
32 Missile Liner
33 Sealant Tape
34 Battery Separators
35 Are Chutes
36 Drum Braka Linings (A/K)
37 Disc Brake Pads, LM? (A/M>
0.0
0.0
435.8
1,333.3
12,436.4
744,0
0.0
584.1
0.0
0.0
92.1
10,374.0
977.0
32,690.8
2,578.8
0.0
3,893.0
6,642.3
1,089.2
117.6
2,643.6
993.5
2,5
1,602.5
0.0
558.0
5,441.1
2.1
29,551.2
2,951.4
812.1
700.0
1,660.2
1.0
"! <3 K
AW , «/
18,049.4
6,030.0
0 tons
0 tons
581 tons
296,949 squares
16,505 tons
698 tons
0 tons
392,121 pieces
0 tons
0 tons
434 tons
18,300,000 square yards
9,770 pieces
15,062,708 feet
22,621 squares
0 squares
176,643 squares
34,713,675 pieces
10,077,464 pieces
156,820 pieces
4,570,266 pieces
7,237,112 pieces
585,500 pieces
8,719,541 pieces
0 tons
1,125 tons
3,607,408 square yards
3 tons
75,977,365 gallons
9,612,655 gallons
4,835 tons
4,667 tons
423,048,539 feet
2,046 pounds
900 pieces
94,328,903 pieces
55,791,708 pieces
0
0
1
1
5
1
0
3
0
0
2
1
1
3
2
0
1
13
13
2
8
3
2
5
0
1
6
2
31
51
8
6
4
2
1
**
**
                                         145,000.5
                                                                                    179
    Humber of plants producing OEM and afteanatket (A/M) brakes  cannot be distinguished.
Source:   ICF Asbestos Market Survey
                                      I-11
            * * *   DRAFT  --  DO  NOT QUOTE OR  CITE   *  * *

-------
sufficiently certain to guarantee avoidance of exposure.  Some of the product

bans examined in this RIA are "staged" bans of products in the sense that

groups of products are banned at different points of time in the future.  Such

a strategy allows for banning products earlier if feasible substitutes already

exist and for banning groups of products later for which substitution for

asbestos may require more time.

     A phase-down of asbestos usage is another option for regulating asbestos

exposure.  A phase-down of asbestos fiber use would operate much like quota

systems often used for certain imported goods.  For example, yearly limits on

the total amount of asbestos fiber allowed to be mined or imported could be

defined.  If these quotas declined over time, smaller and smaller quantities of

asbestos fiber would be embodied in products over time.  Although the end

result of this form of regulation is similar to product bans (if fiber use is

phased down to zero, the end result is the same as a complete asbestos product

ban), the operation of a phase-down in the short run is different.  A phase-

down reduces asbestos use over time, allowing some time for substitutes to be

developed and for any dislocations associated with an immediate ban to be

mitigated or avoided by spreading the asbestos use reduction over time.  A

phase-down has the added benefit of distributing the asbestos use allowed to

those activities for which it  is the most costly to substitute away from

asbestos use.

     Finally, combinations of  the two regulatory approaches were also

considered.  For example, some products could be banned immediately while the

fiber use in the remaining products is phased-down over time.  Similarly, the

timing of a phase-down and of various product bans can be altered to create
       This conclusion assumes  that  the mechanism for allocating  fiber under a
phase-down is competitive or that  the rights to the scarce  fiber  can be
reallocated by market forces after the initial allocation.

                                      1-12

                   * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
                                 "&
distinct regulatory alternatives.

     This RIA reviews all of the qualitative and quantitative efforts

undertaken to evaluate the many different regulatory alternatives considered.

No "preferred" alternative is identified In this RIA because the primary

purpose of this report is to provide information, data, and results for a wide

variety of possible regulatory alternatives for use in the options selection

process.  Thus, the particular regulatory alternatives presented in this RIA

are designed to span a number of possible control strategies for asbestos.  By

providing information for many options under different conditions, the relative

advantages of different approaches can be assessed qualitatively and

quantitatively,

     The remainder of Volume I of this RIA is organized as follows:

          •    ChapterII outlines the different regulatory
               alternatives evaluated and presents the theoretical
               approach for measuring the costs and benefits of the
               various regulatory alternatives considered;

          *    Chapter:III summarizes the data developed for
               quantitative estimation of the costs and benefits for
               the regulatory alternatives; and

          •    ChapterIV presents the estimated costs and benefits
               for the regulatory alternatives considered.

     Appendices that support the analyses and results  in this RIA follow

Volume  I of this RIA.  These contain (1) additional detail concerning the

theoretical and computational procedures employed in evaluating the regulatory

alternatives Including computer model codes (Volume II), (2) sources and other

information relating to asbestos product markets data  collected and developed
     *  Other methods of regulating  asbestos exposure are also being explored in
this regulatory process.  Such methods as  engineering  controls  to reduce
exposure  In certain activities involving asbestos products  could be feasible
depending on the risk reduction offered and the  costs  associated with them.
These alternative methods of regulating asbestos are not examined In detail In
this version of the RIA, although some illustrative results appear in Appendix
G  of this RIA.

                                      1-13

                   * * *  DRAFT --DO NOT QUOTE OR CITE  * * *

-------
for the quantitative cost and benefit estimates presented in the RIA (Volume




III), and (3) sensitivity analysis of the cost/benefit results using




alternative assumptions regarding future asbestos use in products ("Volume IV)
                                      1-14




                   * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
II.  APPROACH FOR COST/BENEFIT ANALYSIS




     This chapter of the Regulatory Impact Analysis outlines the theoretical




approach developed for estimating the costs and benefits of the regulatory




alternatives for controlling exposure to asbestos analyzed in this RIA.  The




alternatives considered in this RIA are presented to assist in the options




selection process, so the specific alternatives examined here are 'designed to




illustrate quantitatively the range of costs and benefits of various types of




options.




     A.  ApproachforEstimating Benefits




     Only one source of benefits associated with reduced exposure to asbestos




-- reduced cancer cases --is estimated quantitatively in this RIA.  Although




asbestos causes other health effects, the cancer risks of asbestos exposure are




well-known and well-researched and hence, are estimated quantitatively here.




This quantification of only cancer cases avoided implies that the numerical




estimates of the benefits developed in this. RIA are lower bounds for the




benefits of controlling exposure to asbestos.  Asbestosis, for example, can




have a significant impact in terms of medical care expenses, reduced




productivity, and deterioration of quality of life.  Furthermore, families of




workers exposed to asbestos are not taken into account in this analysis, so




that any health effects associated with these secondary exposures are not




included in the estimates of benefits presented here.  Finally, lack of




exposure data for some asbestos products prevented a quantitative assessment of




benefits for these categories even though benefits are likely to exist for




these products.  For all of these reasons, the benefits estimates of the




asbestos regulatory alternatives reported in this RIA are quite likely to be




underestimates of the true social benefits of the regulatory alternatives.











                                      II-l




                  * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
          1.   BenefitsModelOverview




          The approach developed for estimating the reduction in mortality due




to controlling asbestos exposure applies to all of the different regulatory




alternatives  considered.  Put simply, the reduction in mortality due to




asbestos controls equals the baseline level of risk minus the risks remaining




under the relevant regulatory alternative.  For example, the mortality




reduction benefits of banning some of the asbestos products equals' the level of




risk associated with the baseline less the risks remaining due to  the non-




banned products;  the benefits equal the risks avoided by banning these




products.




     The health benefits model developed for estimating the benefits of




asbestos controls is designed to project the health benefits from  regulation-




induced changes in asbestos exposures due to releases from asbestos products




manufactured over the period 1987-2000.  Regulatory alternatives may change the




quantities of asbestos products manufactured over the next twenty  years, and




hence, the number of people exposed to asbestos fiber.  The level  of exposure




is assumed to remain constant at the 1985 level except where impacted by the




OSHA 0.2 f/cc PEL.  Dose-response relationships between exposure level and




disease death rates, for lung cancer, mesothelioma, and gastrointestinal




cancer, are combined with the numbers of people exposed both with  and without




the regulatory alternative's requirements and their levels of exposure to




estimate the number of cancer deaths avoided by the regulatory alternative.




Finally, when combined with the estimated cure rates  for the different




asbestos-related cancers, the number of deaths avoided can be translated into




the number of cancer cases avoided by each regulatory alternative.




     This overview of the benefits approach indicates that two distinct tasks




are necessary: (1) derivation of exposure estimates for both the baseline and






                                      II-2




                  * * *  DRAFT  -- DO NOT  QUOTE OR CITE  * * *

-------
the regulatory alternatives,  and (2) development of dose-response relationships

to estimate cancer cases based on the duration and intensity of exposure to

asbestos.   Each of these steps is discussed below.

          2.   Expos_ure_____Est:iBiat;.i.on

          Health effects of exposure to asbestos products manufactured between

1987 and 2000 are estimated on a product by product basis.  For each product,

the population- at risk is subdivided into the following exposure categories:

          •    Primary manufacturing, both occupational and
               nonoccupatlonal;

          •    Secondary manufacturing, both occupational and
               nonoccupational;

          •    Installation,  both occupational and nonoccupational;

          •    Use, both occupational and nonoccupational; and

          •    Disposal or repair, both occupational and
               nonoccupational.

     Occupational exposure occurs among individuals employed in the

manufacture,  installation, use,  and repair or disposal of the asbestos product.

Nonoccupational exposure can be subdivided into ambient exposure and consumer

exposure.  Ambient exposure occurs among persons  living or working close to  the

site of manufacture, use, repair, or disposal of  asbestos products.  Consumer

exposure occurs among those consumers who personally install, use, repair, or

dispose of asbestos products.  The timing of exposures depends on the activity

that gives rise to exposure,  Exposures from releases during product

installation, for example, are assumed to be contemporaneous with those from

primary and secondary product manufacturing, while exposures during repair or

disposal are assumed to occur at the end of the average product life.  Finally,

exposures during product use are assumed to be evenly distributed across the

time from product manufacture to repair or disposal.  The methods used to

estimate these sources of exposure  are summarized in the  following subsections.

                                      11-3

                  * * *  DRAFT  -- DO NOT QUOTE OR CITE  * * *

-------
               a.  Approach for Estimat_ing_Occug_at:iona..l_E3t^osure

               The basic approach for estimating occupational exposures was to

update previous studies and data sources for the many sources of occupational

asbestos exposure, as outlined in a previous study (IGF 1988),  Available

occupational exposure and air emission data from NIOSH, .academic, and industry

studies were supplemented by OSHA Compliance data and the IGF Exposure Survey

(IGF 1988).   The ICF Exposure Survey, which covered both occupational exposures

and air releases, was sent to all miners/millers of asbestos, primary and

secondary manufacturers of asbestos products, and several relevant industry

groups.  OSHA Compliance data were supplied by  the OSHA Office of Management

Data Systems for the SICs corresponding to manufacturing, construction, and

automotive servicing.

     Although most of the analysis in this RIA  is disaggregated to the level of

some 35 asbestos product markets, the limited availability of exposure data on

products at this level of disaggregation forced the estimation of exposure

levels to a higher level of aggregation.  Hence, exposure estimates were

developed for eight groups of asbestos products.  However, these aggregated

product-category exposures were applied to product-specific worker populations

and population distributions, thus retaining as much detailed product-specific

risk information as possible.  The analysis also assumes that job category

exposures for all products in a given product category are identical, which is

reasonable given that similar job activities in related products are likely to

generate similar exposures.  The product categories for which detailed exposure

analysis was conducted are:

          •    Paper products;
          •    Friction products;
          •    Asbestos cement products;
          •    Asbestos-reinforced plastics;
          •    Coatings;


                                      II-4

                  * * *  DRAFT  -- DO NOT'QUOTE  OR  CITE  * *  *

-------
          •    Packings and gaskets;
          •    Textiles;  and
          •    Miscellaneous uses.

     Finally, the approach for developing exposure estimates does not include

products either no longer produced in the U.S. or no longer imported into the

U.S., such as commercial paper, corrugated paper, rollboard, flooring felt,

roofing felt (imported only), corrugated A/G sheet (Imported only), and vinyl

asbestos floor tile.'5

     In the approach developed for estimating occupational exposures, current

exposure levels associated with each job category or task are based on

historical data.  Both geometric and arithmetic means of the raw measurement

data are computed.  The geometric mean represents a typical (median) exposure

level for a worker' performing a particular job, assuming that the observations

follow a log normal distribution which is common for exposure data.  The

arithmetic mean, on the other hand, represents average worker exposure.  The

arithmetic means are used in the health benefits model to assess the

consequences of exposure since total health benefits are dependent on all

worker exposures, high, low, and typical.

     Total 1985 worker populations for primary and secondary product

manufacturing for each product were calculated by summing the worker

populations for each separate asbestos product producer Identified and surveyed

during the IGF Market Survey.  These total worker populations were then

distributed into specific job categories (corresponding to monitoring tests and

results) according to the population distributions for workers in these job

categories contained In the information submitted under the 1981 TSCA Section
     JU
       Occupational exposure levels and population  factors for products no
longer produced or used in the U.S. are presented In Appendix G of the
occupational asbestos exposure assessment, IGF  (1988).
                                      II-5

                  * * *  DRAFT  -- DO NOT QUOTE  OR CITE   * *

-------
8(a) requirement.   Exposed populations for mining and milling were obtained

through telephone  contacts with company representatives.

     Since installation,  repair, and removal jobs are intermittent, populations

for brake repair and construction are calculated as full-time equivalents

(FTEs) .   The FTE population is the number of workers working 250 days/year and

8 hours/day at installing, repairing, and removing the total quantity of an

asbestos product manufactured or imported each year (quantity information for

each asbestos product were developed in the IGF Asbestos Market Survey),

Short-term exposures, which represent exposure during the period of time in

which the actual task is performed, were applied to this population.

     OSHA's recently promulgated final 0.2 f/cc PEL raises a significant issue

in projecting current and future occupational asbestos exposures.  The approach

used in this analysis assumes that for those operations where 8-hour TWA

exposures are currently below 0.2 f/cc, work practices will remain unchanged.

However, for those operations where the 8-hour TWA exposures in 1985 were

estimated to be above 0.2 f/cc, work practices will be changed either with the

addition of engineering controls or respirators to reduce the exposures to the

0.2 f/cc PEL.   Thus, in these cases, exposure estimates were reduced to 0.2

f/cc.

               b,    Approach^fjDr^E^                         Exposure

               Non-occupational exposures were estimated using two methods,

each corresponding to a separate class of exposure.  One method was used to

estimate the exposures that occur due to consumer installation, use, and repair

of asbestos products, such as brakes.  Another method was developed to estimate

the ambient emissions associated with production activities involving asbestos
       The estimated exposures in excess of the  .2 f/ml  PEL  are  due  to older
readings, i.e., prior to the promulgation of the final OSHA  standard.

                                      II-6

                  * * *  DRAFT -- DO NOT QUOTE OR CITE   * *  *

-------
and the exposures of populations that result.  The approaches developed for

each of these sources of exposure are discussed separately below and in more

detail in Appendix A-4.

                    i,  Np.Q-p.qc]up.^rtA.!g!.i]|^l.,:Exp_osiare. in Product Use

                    The approach for estimating non-occupational exposure to

asbestos is outlined in detail in Versar  (1987) .  This method focused on five

exposure categories:

          •    Airborne emissions from brake use;
          *    Consumer exposure from coatings, sealants, and paints;
          •    Consumer exposure from asbestos vinyl floor tile;
          •    Consumer exposure during brake repair; and
          •    Consumer exposure to other asbestos products.

     For airborne emissions from brakes, existing estimates in  the literature

of emissions of asbestos during braking were updated using more current

information on vehicle use, brake types, and vehicle.types.  Using these

estimates of emissions, the total emissions of asbestos  in the  U.S. were

calculated based on the number of vehicles registered, the average number of •

miles driven per year, and the distribution of vehicles  across  cars, trucks,

and motorcycles.  The total emissions of asbestos in 24  different cities across

the U.S. were also computed based on gasoline usage and  average vehicle mileage

information.  Ambient concentrations of asbestos due to  these emissions were

estimated using a computerized dispersion model of emissions, land area, and

meteorological characteristics of the 24 different cities.  Finally, exposures

on a national level were developed using  several methods, including best-case

and worst-case assumptions.  Worst-case estimates were generated by assuming

that rural areas experienced the same ambient  concentrations of asbestos as the

group of small cities in the 24 cities modeled and that  all other areas

experience ambient concentrations at the  levels of similar sized cities in the

group of 24 cities modeled.  Best-case estimates, on the other  hand, assumed


                                      II-7

                  * * *  DRAFT -- DO NOT QUOTE OR CITE   * * *

-------
zero ambient concentrations in rural areas.  The approach used to estimate




consumer exposures to vinyl asbestos floor tile was based on existing studies




of asbestos inhalation and emission rates both in removal of tiles and in




ordinary wear, as discussed in Versar (1987).




     For consumer exposures to asbestos during brake repair, Versar applied the




fiber concentration estimates for different phases of brake repair contained in




several existing articles to the kinds and durations of activities involved in




consumer "do-it-yourself" brake repair.




     For the other asbestos products, Versar either found no data to estimate




consumer exposures or no evidence of exposure during product use because some




of these products are formulated in such a way that the asbestos fibers are




bound within other materials.  The lack of data for estimating exposures for




some products and activities implies that the benefits estimated for the




regulatory alternatives examined in this RIA are likely to be underestimated.




                         ii.  Ajjjfolent ...Exposure Estimation




                         Ambient exposures due to product manufacture were




estimated by first calculating the emissions attributable to asbestos product




manufacturing activities and then modeling the transport of the asbestos fibers




to the  surrounding population.




     To calculate emissions, air releases were estimated for each




mining/milling and product manufacturing facility using site-specific data and




engineering estimates of baghouse collection efficiencies,  as discussed in




detail  in IGF  (1988).  Air releases  from brake servicing and construction,




however, were calculated as annual  industry  emissions  due to the lack of site




specific information  in these geographically widespread  industries.




     The approach for estimating air  releases  during milling and primary




manufacturing was based mostly on model plant  analyses developed by the EPA






                                      II-8




                  * * *  DRAFT  -- DO NOT QUOTE OR CITE  * * *

-------
Office of Air Quality Planning and Standards (OAQPS), and the EPA Exposure




Assessment Branch as discussed in IGF (1988).  Under this approach, emission




rates from these activities were estimated using information on plant




characteristics -- stack dimensions, exhaust gas velocity, temperature, and




flow rate, collection efficiencies of control devices, and asbestos collection




by the control devices.  These estimates were combined with production




information from the Asbestos Market Survey to produce annual emissions of




asbestos from these operations.




     The approach for the second step in developing estimates of ambient




exposures -- modeling fiber transmission and exposure of the surrounding




populations -- was developed by ¥ersar (1988).  The emissions estimates




developed by ICF (1988) were combined with population information by ZIP Code.




Versar then generated exposure estimates by plant using an atmospheric




dispersion model based on the populations surrounding each plant and the




emissions estimated for each plant.  The resulting exposure estimates were then




aggregated by product category for use in the health effects estimation model,




          3.  Dose-Response Relationships




          Numerous human and animal studies have documented the correlation of




exposure to asbestos fibers with increased incidence of certain diseases,




including asbestosis, lung cancer, mesothelioma, gastrointestinal  cancer, and




other cancers,  While much of the research has focused on effects  of exposure




to the levels of asbestos typically associated with occupational exposures




before 1972, evidence indicates that even low exposures are likely to be




hazardous.  Studies indicate that at low concentrations, lung cancer and




mesothelioma present the greatest threat to human health  (Jacob and Anspach




1964; Peto  1979).  According to the Nicholson report  (USEPA 1986), there are




fourteen epidemiologic studies demonstrating increasing exposure to various






                                      II-9




                  * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
forms of asbestos.  Similarly, there are four studies providing quantitative

data demonstrating a dose-response relationship for mesothelioma.

     The asbestos-related diseases that are analyzed in this study are lung

cancer, mesothelioma and gastrointestinal cancer.  To the extent that other

cancers and asbestosis are induced by low exposures, restricting the estimates

of the health benefits of controls on asbestos to these specific cancers will

underestimate the benefits.

     In developing dose-response relationships for exposure to asbestos in both

the baseline and under the regulatory alternatives, a number of key factors

were considered.  These are reviewed briefly below,

               a.   Time..__Be.tween,,Onset of Exposure and :Diagno s i s of Asbestos:-
                    Related Disease

               This analysis is restricted to health changes from regulation-

induced changes in exposure to asbestos between 1987 and 2000.  These effects

would not be expected to be apparent until after 1997 because of the long time

that usually elapses between onset of exposure and diagnosis of an asbestos-

related disease.  For example, the time between onset of exposure and diagnosis

of disease for lung cancer usually ranges from 20 to 40 years.  This range can

be partially explained by the apparent action of asbestos to increase the

general population risk by a factor proportional to cumulative exposure.

Because the general population risk is very low before age 40, cases of

asbestos-induced cancer are unlikely to be observed before this age, no matter

what the age of initial exposure.*  According to Seidman e_t al.,. (1979), a

minimum time period of 10 years is usually observed between onset of exposure

and diagnosis of disease.
       Seidman et al. (1979) reported a shorter lag time when  initial exposures
occurred at the- cancer ages (over age 40), which would be  consistent with this
explanation.

                                     11-10

                  * * *  DRAFT  -- DO NOT QUOTE OR CITE  *  * *

-------
     Mesothelioma also has a long time lag to diagnosis (i.e. 20 to 50 years)



from onset of exposure, but this appears to be independent of age at first



exposure (Peto et al.  1982).   Peto also indicates a minimum period of 10 to 15



years is usually observed between onset of exposure and diagnosis of the



disease.  Among insulation workers, the ratio of excess lung cancer to



mesothelioma has been shown to be greater when exposure started later, over 25



years of age,  rather than between 18 and 25 years.  If the ratio of excess lung



cancer to mesothelioma continues to fall with reduction in age at first



exposure, mesothelioma may constitute the major health hazard when asbestos



exposure begins in childhood,



               b.   Leve1andPuration:of Exposure


    \
               At present, there is no evidence of a safe level of asbestos



exposure for lung cancer or mesothelioma,  Epidemiological studies of these



dose-response relationships have been performed with heavily exposed industrial



cohorts.  The data from these studies, which have been reviewed In the



Nicholson report (USEPA 1986), lead to the conclusion that excess mortality



from lung cancer and mesothelioma Is proportional to both the level and



duration of exposure to asbestos fibers.  The most direct evidence for a linear



dose-response relationship for lung cancer comes from two studies -- Henderson



and Interline (1979) and Dement et al. (1982).  Data available for mesothelioma



are also consistent with a linear relationship to cumulative exposure (Seidman



et al. 1979, Hobbs et al. 1980, Jones et al. 1980).  None of these studies



shows any evidence of a threshold level of exposure below which exposure to



asbestos is considered to be safe.



               c.  FiberType



               Although chrysotile is the main type of asbestos fiber used in



the United States, A/C pipe contains  large quantities of crocidolite.  However,





                                      11-11



                  * * *  DRAFT  -- DO  NOT QUOTE OR CITE  * *  *

-------
when the slopes of lung cancer dose-response curves estimated from studies of




various populations of asbestos workers are compared, no clear distinction can.




be found between the experience of individuals exposed to chrysotile and




individuals exposed to other fibers (CPSC 1983, NRG 1984).  A similar lack of




consistency in the observed relationship between type of fiber to which the




population was exposed and incidence of pleural or peritoneal mesothelioma is




seen (NEC 1984).




     Several commissions and study groups have reviewed cancer risks among




cohorts exposed to asbestos fibers and observed that risks appear to vary from




one study to another possibly because of exposure to different fiber types




(ORCA 1984; WHO 1985),  Some have hypothesized that chrysotile asbestos poses a




lesser carcinogenic hazard than other forms of asbestos (Langer 1986),  The




Nicholson report (BSEPA 1986) acknowledged that some of the lowest unit risk




factors observed for  lung cancer are among cohorts exposed to chrysotile




asbestos.  However, this report also points out that the unit risk factors




estimated from the studies by Dement et al.   (1983) and McDonald et al.   (1983)




for textile production workers using predominantly chrysotile are among the




highest factors seen  in all studies of asbestos-induced lung cancer.  One




hypothesis is that long and thin fibers are more potent carcinogens than  short




fibers.  Support for  this hypothesis coaes principally from laboratory studies




of rats and hamsters  in which a higher incidence of mesothelioma was seen in




animals injected with fibers longer than 8 micrograms in  length and less  than




2.5 micrograms in diameter  (Stanton et alv..v 1981),  However, as noted by




Bertrand and Pexerat  (1980), none of the studies conducted to date demonstrates




a threshold at which  fibers become less carcinogenic or not carcinogenic  at




all.  Doll and Peto  (1985) have also examined evidence on fiber length potency




and concluded, as many other scientists have,  that longer fibers appear to be






                                     11-12




                  * * *  DRAFT  -- DO NOT QUOTE OR  CITE  * * *

-------
more carcinogenic, but they note that the boundary between hazardous and non-




hazardous fiber dimensions has not been established.  Furthermore, the animal




results are based on routes of exposure, primarily injection, that are not




comparable to the respiratory route through which many people are exposed.




Therefore, there is no firm evidence that potency varies from one asbestos




fiber type to another.Therefore, in this analysis, it is assumed that the dose




response constants do not vary according to the fiber type or dimension to




which the person is exposed.




               d.  Dose-Response Mode.1 s




               Based on the above discussion, this analysis uses the linear,




no-threshold dose-response relationships proposed by Nicholson  (1983) and used




by GSHA (1986) to develop benefits estimates for the final  .2 f/cc PEL to




convert information on asbestos exposure levels into excess lung cancer and




mesothelioma death rates for each time period.  Using these linear, no-




threshold dose-response relationships is appropriate because they are the




foundation of the final OSHA  . 2 f/cc PEL and thus have received substantial




review in both the scientific and regulatory communities.  Also, the Nicholson




report (U.S. EPA 1986) considered the linear, no-threshold model in an




extensive review of the work by several other agencies and committees.  It was




noted that a linear, no threshold model was supported in publications by a




cross-section of scientific opinion including the Committee on  Asbestos (ACA)




of the British Health and Safety Commission  (1979a,b), the Ontario Royal




Commission (ORCA 1984), the National Academy of Sciences  (NAS 1984)  , and the




Chronic Hazard Advisory Panel on Asbestos  (USCPSC 1983).  Use of the no-




threshold model for carcinogens is consistent with  the Guidelines for




Carcinogen Assessment (51 FR  33992) published by U.S. EPA  in 1986.











                                     11-13




                  * * *  DRAFT -- DO NOT QUOTE OR CITE   * * *

-------
     Following the approach used In the OSHA (1986) analysis, asbestos-related

excess death rates from gastrointestinal cancer are assumed to be equal to 10

percent of those for lung cancer in each time period.  This analysis follows

OSHA's relative risk model for lung cancer which includes a minimum 10-year

latency period between onset of exposure and increased risk of death from

cancer.  For mesothelioma, this analysis also follows OSHA use of an absolute

risk model.

     The relative risk model for lung cancer used in this analysis includes a

minimum 10-year latency period between onset of exposure and increased risk of

death from cancer.  The form of these relationships is as follows:

          IL = IE * [1 + KL * f * d(t>1Q)]               for t > 10

          IL - IE                                        for t <- 10

where;

          IL = age-specific lung cancer death rate with exposure to asbestos

          IE = age-specific lung cancer death rate without exposure to
               asbestos

          t  = time from onset of exposure until current age (years)

      d.  1fn - duration of exposure from onset until 10 years  (latency
               period) before current age (years)

           f — intensity of exposure (f/cc)

          KL — dose-response constant

    IL  - IE  ~ absolute excess lung cancer death rates due to  asbestos
               exposure.

      The mesothelioma absolute risk model is:

          IM « KM * f *  [(t-10)3  -  (t-10-d)3]        for t >  ICH-d

          IM = % * f *  (t-10)3                          for 10 + d >=  t <  d

          I  - o                                         for t <= 10
                                      11-14

                   *  *  *  DRAFT --  DO NOT  QUOTE OR CITE  * * *

-------
where:




         t = time since first exposure (years)




         d = total duration of exposure (years)




         f = level of exposure (f/cc)




        Kj^ — dose-response constant




     Data inputs used to specify these dose-response relationships are




presented in Chapter III,




          4.  Projection of HealthBene fits




          Health benefits of the regulatory alternatives for asbestos products




manufactured after 1987, estimated on a product-by-product basis, are equal to




the difference between the adverse health effects from asbestos exposure




without and with the alternatives.  To estimate the adverse health effects from




exposure to asbestos in the baseline and under the regulatory alternatives, the




population at risk is divided into homogeneous exposure categories and into age




cohorts.  Next, the health effects attributable to the first year of exposure




for the members of each age and exposure subgroup, both in the "baseline and




with the regulatory alternative, are estimated using an adaptation of the life




table model described in Eddy (1980).




     The health effects model tracks an individual for each age and exposure




subgroup starting from a single year of exposure, by five year periods, until




age 90, at which point the probability of being alive is assumed to zero.  For




each five-year period the probability of dying of asbestos-related cancers is




estimated as the product of the probability of being alive in that time period




and the probability of dying from an asbestos-related cancer if alive.  The




probability of being alive during any five year time period decreases with age.




The probabilities of dying from asbestos-related cancers if alive are estimated




using the Nicholson dose-response relationships and the exposure data.  These






                                     11-15




                  * * *  DRAFT  -- DO NOT QUOTE OR CITE  * * *

-------
probabilities increase with time elapsed, since the initiation of exposure since




exposure as follows.  The dose-response relationships assume a minimum ten-year




latency period between exposure and excess cancer risks.   Thus,  the probability




of dying from an asbestos -related cancer will be zero for the first two five




year periods after exposure.   After ten years,  the probability of dying o£ an




asbestos-related cancer increases with time since onset of exposure.  In the




case of isesothelioma, the absolute risk model generates death rates that




increase with time since exposure.  In the case of lung cancer (and




gastrointestinal cancer which is estimated as 10 percent of the lung cancer




rate) the excess risks remain constant over time relative to the baseline lung




cancer death rates.  However, the baseline lung cancer death rates increase




with age and, therefore, the probability of excess lung cancer or




gastrointestinal cancer increases with age or time since onset of exposure.




Thus, for each age cohort, the probabilities of dying from asbestos-related




cancers attributable to a single year of exposure increase with time since the




onset of exposure except at the older ages where competing causes of death




reduce the probability of observing deaths from asbestos-related cancers.




     The probabilities of observing deaths from asbestos-related cancers in




each five year time period for an individual from each age-exposure subgroup




are multiplied by the number of people in the population subgroup to generate




estimates of the expected asbestos-related cancers in the subgroup attributable




to the single year of exposure.  These estimates follow the same time




distribution relative to exposure as the individual probabilities --no cases




for ten years followed by an increasing and then decreasing number with age.




     Estimates of deaths from asbestos-related cancers are generated for




exposures both with and without the regulations and the differences in




asbestos-related cancers computed for each five year period.  These






                                     11-16




                  * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
differences, avoided cancers, are the estimate health, benefits for the




regulation.  When these avoided cancers are aggregated across age-cohorts,




their resultant time distribution ranges from 10 to 80 years with most cases




occurring 35 to 60 years after exposure.




     The results for each population age-exposure subgroup for each product are




added for each five-year time period after the start of the analysis to




determine, for each product, the total avoided cancer deaths during each time




period attributable to the regulatory alternative.  In doing this aggregation




it is assumed that the avoided cancer deaths are distributed uniformly




throughout each five-year period.  Furthermore, the aggregation of the avoided




cancer deaths estimated for different exposure categories has to take into




account the timing of exposures.




     Exposures from releases during product installation are assumed to be




contemporaneous with those from primary and secondary product manufacturing.




Exposures from repair or disposal are assumed to occur at the end of the




average product life.  Exposures during product use are assumed to be evenly




distributed across the time from product manufacture to repair or disposal.




The estimated avoided cancer deaths for the repair/disposal category are




shifted forward in time by a number of years equal to the average product life




before being added to the estimates for primary and secondary manufacturing and




installation.  The estimated avoided cancer deaths for one year of exposure in




the use exposure category are assumed to be replicated for each year of use of




the product, shifted forward in time one year at a time from the time of




manufacture.  Thus estimates are obtained for the number of avoided deaths from




lung cancer, gastrointestinal cancer, and mesothelioma attributable to the




regulation's impact on each product's manufacture in the first year of the




analysis.                   .  •






                                     11-17




                  * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
     After the avoided cancer deaths attributable to asbestos releases from




products manufactured during the first year of the analysis have been




estimated, the avoided cancer deaths for products manufactured in all




subsequent years of the analysis are estimated by multiplying the first year




estimates by the ratio of the level of production in the subsequent year




compared to that in the first year.  The ratio of future to current production




varies according to general trends in the industry baselines as well as




according to features of the regulatory alternatives.




     The total number of avoided cancer deaths attributable to the regulations




impact on asbestos products manufactured 1987-2000 for each product for each




five-year period after the start of the analysis are then calculated by




aggregating the deaths avoided associated with each year of manufacture.  The




timing of the cases relative to the start of the analysis is preserved by




assuming that the deaths in any five-year period are uniformly distributed, and




by shifting the estimated avoided deaths for any given year of manufacture




forward in time by the number of years from the beginning of the analysis.  The




total numbers of avoided excess cancer cases for each five year period are




estimated by dividing the estimated numbers of cancer deaths by the death rates




for each type of cancer.




     Finally, the present value of benefits are calculated assuming two




discount rates, zero percent and three percent.  In all cases, benefits are




discounted from time of exposure to the beginning year of the analysis.  In




some cases, the time of exposure is relatively close to the present, for




example, exposures in manufacturing products occur between the beginning of the




analysis  (1986) and the end of the simulation period for manufacturing




activities (the year 2000 for this model).  On the other hand, exposures due to




repair and disposal may occur far in the future, especially for those products






                                     11-18




                  * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
that have long useful lives,   In these cases,  the benefits are discounted from




a time of exposure in the future that is beyond the time horizon of the




simulation period for manufacturing because the benefits modeling simulates




exposures throughout product life cycles attributable to asbestos products




manufactured during the 1986 to 200 simulation period.




     B.  Approach for Estimating__ Costs




     The regulatory options considered in this analysis include phase-downs of




asbestos fiber usage over time, bans on products that use asbestos, and




combinations of these two types of regulatory schemes.  To estimate the costs




associated with the various regulatory options actually examined, a




mieroeeonomic model of the asbestos industry was developed.  This model is




general in scope and estimates the costs experienced by the many different




economic entities associated with asbestos fiber and product market, both in




the U.S. and internationally.  Before proceeding with the details of the




methods used to estimate the costs of the regulatory alternatives, however,  •




some preliminary comments concerning the nature of the welfare economics that




provide the foundation of this analysis are appropriate.




          1.  Welfare Economics	Foundations of	the	Approach




          An intervention that alters the existing equilibrium in one market or




across several markets will lead to welfare effects or changes in benefits




enjoyed by participants in these markets.  The analysis of these welfare




effects can be carried out in two ways (1) a "distribution" analysis that




measures effects on individual groups, and (2) an "efficiency" analysis that




measures the net effects on society.  Distribution analysis, unlike efficiency




analysis, not only identifies the gross losers and gainers, but also the




magnitudes of these losses and gains, transfers across individual groups, and




therefore, the residual "deadweight" losses or gains to society.  Efficiency






                                     11-19




                  * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
analysis only Identifies the net losses or gains, if any, to individual groups




and the deadweight losses or gains to society.




     Understanding how distribution analysis differs from efficiency analysis




is helpful in understanding estimates of producer and consumer surplus losses




generated by economic models.  However, the term "efficiency losses" is used in




a specific sense here because the benefits of the regulations modeled do not




appear.  Instead, this section focuses on only the cost impact of the




regulations.  Since the benefits may well exceed the costs of the regulations,




the net impact of the regulations may clearly be positive in social welfare




terms.  In economists' terminology, this implies that "deadweight" welfare




gains ensue, since social benefits of the regulations may exceed social costs.




However, because the analytical methods discussed in this chapter focus only on




the costs of the regulatory alternatives, -when losses are called "deadweight"




in this section, these are defined as cost burdens experienced by market




participants net of any transfers between them, but evaluated prior to




adjusting for benefits.




     Given this perspective, the goal of the cost analyses presented in this




chapter is not only to define and measure the net social costs of the various




regulatory alternatives, but also to identify the economic entities who bear




the costs (or who enjoy the benefits in certain circumstances) imposed by the




regulatory alternatives.




     Finally, although there are differences in the details of estimating the




costs of different regulatory alternatives, certain elements of analysis are




common to all of them.  These Include the structure and linkages of the markets




potentially affected by the alternatives, the economic entities affected, and




the baseline relative to which any welfare effects of the alternatives




experienced by these entities can be measured.  Hence, before addressing the






                                     11-20




                  * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
specific methods used to estimate the costs of each type  of regulation, it is

useful to review the economic structure of the potentially affected markets,

the entities affected, and the baseline developed for  the analysis,

          2.  Economic	St.rjuc_,ture__of	Asbe_stos	Markets._...and  Baseline Specification

          The essential function of the economic models of asbestos regulations

is to mathematically describe the economic interactions between  the asbestos

fiber market and the numerous output markets that use  the fiber  as an  input in

the production of a good.  Quantities of the output good  demanded determine

each individual market's demand for fiber.  The total  fiber demanded determines

the price of the fiber, which in turn determines the price in each output

market.  The supply schedule in the fiber market incorporates the supply to

U.S. from domestic and foreign sources.  Figure II-1 shows the interactions of

the U.S. and world markets for fiber and asbestos products.

     The link between the fiber market and the other output markets is vital  to

the simulation of the alternative regulatory scenarios.   To understand how

these policies are modeled, consider, for example,  a single year in the

simulation  of a fiber phase-down.  For the phase-down  alternative, a fiber.

"cap" is imposed, which, in essence, is a ceiling  on fiber usage during that

year.  With demand exceeding fiber supply, the price to  consumers rises.    This

increase in price restricts usage of fiber in downstream markets resulting  in

less output of these  goods and, consequently, higher prices.

     The linkages between the asbestos product markets and  the fiber market

also operate in the reverse direction.  Consider a ban of some,  but not all,

asbestos products.  In this case, certain downstream asbestos products are

banned.  This curb on output reduces the demand  for asbestos  fiber, resulting
      *   Here  the  reference is to consumers of fibers who use it as an input for
 the  production of goods,  i.e.,  primary processors.

                                      11-21

                   * * *  DRAFT - - DO NOT QUOTE OR CITE  * *' *

-------
              FIGURE 11-1. U.S. AND WORLD ASBESTOS MARKETS
O
o
H
o
H
*
*
H
t
K>
          Domestic
          Miners &
          Millers
Foreign
Miners
Millers
                               Foreign
                               Secondary
                               Processors
                           Export of
                           Mixtures
                               Domestic
                               Primary
                               Processors
                     Import
                      of
                     Fiber
                                        Foreign
                                        Consumers
                                                      Export of
                                                      Products
                                        Domestic
                                        Secondary
                                        Processors

                                                         Import of
                                                         Mixtures
                                                  Foreign
                                                  Primary
                                                  Processors
                                                                   Domestic
                                                                   Consumers

Import of
Products
                                                           Foreign
                                                           Secondary
                                                           Processors

-------
in a decreased price of fiber In the market.  This translates to lower product

prices in the non-banned downstream markets.  Thus, banning some products can

benefit consumers and producers of other products precisely because of the

vertical and horizontal structure of the affected markets.

     The welfare effects computed by the cost estimation models consist of

transfers and "deadweight" losses caused by the regulation.   For example,

consider an increase in the price of asbestos fiber due to a regulatory

restriction on the total amount of fiber that may be sold or imported during a

given year (a fiber "cap").  In general, this will cause consumer and producer

surplus losses in all downstream markets.  Consumers either pay higher' prices

for asbestos products or switch to more costly substitutes.  Producers of these

products may suffer profit losses and reductions In the value of their

equipment as asbestos fiber's price rises.  Furthermore, losses in producer

surplus also occur in the fiber market because the quantity cap limits the

quantity that can be supplied and competitive forces produce a decline in the

price of fiber received by these producers.

     On the other hand, some downstream consumer and producer surplus losses

and some of the producer surplus losses in the fiber market represent transfers

to those who are permitted to mine or use fiber, which are valuable rights when

a regulatory option restricts the available fiber supply.  Hence, parties that

hold these rights are made better off.  Thus, not all losses of producer and

consumer surplus in the fiber and product markets are net losses to society

because at least some of these losses may be transferred to other economic

entities.  Finally, there are foreign entitles at all levels of asbestos use

and production whose losses or gains are not included in computing welfare
     *  As explained earlier,  deadweight losses- as  referred to  in this  section
 do not  consider  the benefits  side  of regulations.

                                      11-23

                  * * *  DRAFT --'DO NOT QUOTE OR CITE   *  * *

-------
effects on domestic parties.   Welfare effects of the regulatory alternatives




not only must be developed by the nature of the economic entity affected, but




also in terms of whether the entities are included in the U.S. welfare analysis




or not.




     Net changes in domestic and world welfare are distinguished, (net of the




explicit health-related benefits, of course) in this analysis.  Except for the




foreign miners and millers, foreign primary processors, and the foreign




asbestos product purchasers,  all other parties are included in the computation




of net domestic (i.e., U.S.)  welfare changes due to the regulation.  That is,




adding all domestic welfare changes yields the domestic net welfare impact of a




regulatory alternative.  Adding the individual welfare change of all parties




(including foreign entities)  on the other hand, gives the net world welfare




change.  Given the fact that a major share of U.S. fiber supply comes from




foreign suppliers, their share of the producer surplus loss (caused by all




forms of regulation) may be substantial.  Since these foreign losses are not




considered part of U.S. welfare, the impact of the regulations on net U.S.




welfare may be substantially different from their net impact on world welfare.




     Finally, all of the welfare changes computed using the techniques




described in this section are defined relative to a "baseline", which is the




state of the world that would have developed had no regulation been imposed.




In essence, the baseline is the equilibrium that would have existed in the




absence of regulation.  Specifying this baseline is not necessarily easy




because the analysis spans several decades, making the evolution of the many




markets that use asbestos difficult to ignore.  Consequently, modeling future




gains and losses of market participants due to regulatory interventions




requires that the individual markets using asbestos be scrutinized closely to




determine their future paths of growth or decline.






                                     11-24




                  * * *  D1AFT -- DO NOT QUOTE OR CITE  * * *

-------
     One final issue in the baseline specification is that market expectations

about proposed regulatory implementation may affect the baseline definition,

In many instances, market participants anticipate the enactment of regulations,

If this happens, some of the adjustments induced by the policy may occur before

the regulation is actually effective.  However, because of the difficulties of

determining these anticipatory responses, no efforts were made to adjust

baseline values for any endogenous anticipations of market participants.

          3.  SElegujLatojry^^Qptions .....
          Although a number of different regulatory options are reported in

this analysis, these are comprised of different combinations and timing of the

two basic phase-down and product ban alternatives.  Hence, the discussion below

describes the operation of the cost model for a fiber phase-down alone, for

product bans alone, and for a combined fiber phase -down and product ban.

               a.  .Fibe.r___Phase_-D
-------
                    FIGURE  II-2


           FIBER USAGE  PHASEDQWN
                   (Fiber Market-
Price of
Fiber
      :'Capv=:.Q
Fiber Quantity
                 Air Output '•Market-
    ' of
Output
Good
                                    Quantity of
                                    Output Good
                      11-26


     * * *  DRAFT --  DO SOT QUOTE OR CITE  * * *

-------
period of time is equal to the difference "between P p and P" j» (in the top




panel),  'Since P p represents the value to users of the marginal unit of fiber




and P  p measures the marginal fiber supply price by the competitive producers




of fiber.




     The second consequence is that the total cost of producing fiber-using




outputs rises, reflecting the higher "full" price of fiber (where "full" price




equals the price of the fiber itself plus the value of the right to purchase of




use the fiber).  This increased cost of production of the output goods is




represented as an upward shift of the supply schedules in these output markets




(S gr to S gr in the bottom panel).




     This analysis assumes that the long-run supplies of the output goods using




asbestos fiber are perfectly elastic, so that there is no producer surplus to



                                                                       IT
lose in the long run.  Hence, the supply schedules appear flat, as is S" in




the bottom panel of Figure II-2.*  However, there may be "quasi-rents" that




accrue to factors in these markets and which can be forfeited in the short run




if the price that producers receive falls.  For example, amortization payments




for a factory building are "quasi-rents" which might be foregone for some




period of time if no other economically viable use exists that yields a higher




return.  In the long run, however, these payments are necessary to retain




producers in this industry.  Thus, areas 7 and 8 above the output market short




run supply schedules represent short run producer surpluses.  In the long run,




since the supply curves for the output goods are perfectly elastic, no producer




surplus losses in these markets exist.  Instead, the cost of the regulation




that is borne in these markets is shouldered by consumers of these output




goods.
        The supply function in the fiber market, however,  is  assumed to be both

 the  short-run and the long-run curve.  Hence, producer  surplus  exists in  that

 market  even in the long run.




                                     11-27




                  * * *  DRAFT -- DO NOT QUOTE OR  CITE   *  * *

-------
     In the efficiency analysis,  three  different areas in these graphs are the

central focus.  These are;

          *    Area_4	in_the£ib_er	market --  the deadweight losses
               borne by factors of production associated with the
               supply of fiber;

          •    Areas	6.._in	the	_Q\itput.jiimarkets   - - the deadweight
               losses borne by consumers  of the  products made from
               asbestos fiber (area  6 in  each output market is taken
               into account); and

          «    Areas 8 in the output, markets  - -  the short run
               deadweight losses  borne  by factors of production
               (other than those  in  the fiber market) associated with
               the supply of each of these different products.

     Areas 4, 6, and 8 represent  the net  burdens imposed on various

participants  in these markets in  the short run (prior to considering the value

of rights to use or purchase fiber).  That is, these areas measure the net

impacts on society after subtracting any  transfers between economic entities.

However, for purposes of performing  distribution analysis, it is precisely the

gross welfare effects and the transfers between economic actors that are of

interest.  To discuss the distribution  of the gains and losses imposed on

various menbers of society, the analysis  must backtrack to gross gains and

losses; the net losses that are the  center of attention in the efficiency

perspective are not sufficient for the  distribution analysis.

     In terms of Figure II-2, the analysis in this section is concerned not

only with areas 4, 6, and 8, but  also with areas 2, 5, and 7.  These

rectangular areas are important because by adding them to the triangles that

are the focus of the efficiency analysis, the gross gains and losses

experienced by the participants in these  markets in the short-run are revealed.

In particular:

          m    Ar.ea,...^... .i.n..i...the,.i...f.ibe.r....BU|rkjjJi;m.i..§,1Ja.dd&d to area 4 to
               obtain the total loss of producer surplus by the
               factors associated with  fiber production;


                                     11-28

                  * * *  DEAFT  -- DO NOT  QUOTE OR CITE  * * *

-------
               Areas 5 in the output markets are added,, to areas 6 to obtain an
               estimate of the gross short rim consumer surplus losses
               experienced in these output markets ;   and
          *    Areas 7 ijCL.the^ output markets ........ .are added to :: areas 8 to
               obtain the gross short run producer surplus losses
               experienced by factors (other than those in the fiber
               market) associated with the production of these output
                  ,  A*
               goods .

     Areas 1 and 3 in the fiber market are precisely equal to the sum of areas

5, 6, 7, and 8 across all of the output markets.  That is,  (1) the sum of areas

5 and 7 in all of the output markets equals area 1 in the fiber market, and (2)

the sum of areas 6 and 8 in the output markets equals area 3 in the fiber

market.  Thus, if 5, 6, 7, and 8 are examined separately, areas 1 and 3 need

not be analyzed.

     With this taxonomy of gross losses, it is possible to understand why the

triangular areas are identified as the net losses to society,  Combined,

rectangular areas 5 , 7 , and 2 measure precisely the total value of the rights

to use or purchase the limited supply of scarce fiber during a phase -down.

This can be understood by noting first that the upward shift of the short-run

supply curve in the output market (from S^sr to S^sr) is caused by the rise in

the "full" price of fiber.  In other words, the "full" price of fiber rises by

the difference between P^p and P°p,  and this price increase is directly

translated into a vertical shift of the short run supply functions in the
     *  The areas under the demand curves in the  output markets represents
strictly speaking, the combined surpluses of the  consumers of final goods and
of "downstream" producers who purchase these intermediate output goods to
fashion final consumption goods.

     **  Note that areas 8 in the output markets  do not incorporate area 4 in
the fiber market for technical reasons.  Basically, since there are multiple
downstream purchasers of fiber, representing fiber market producer surplus in
the output markets is quite difficult using standard  output market supply
functions that have intuitive interpretations.  Therefore, the approach used in
this model measures producer surplus of fiber producers in the fiber market
itself.
                                     11-29

                  * * *  DRAFT  -- DO NOT QUOTE  OR CITE  * * *

-------
output markets.*  therefore, the difference between Pj_ and P.]_ in the output

markets directly reflects the rise in the full price of fiber (P p - P p).  It

is reasonably intuitive, as a consequence, that areas 5 and 7 in the output

markets measure the portion of the total value of rights to use or to purchase

fiber (areas 1+2) represented by area 1 in the fiber market.  Similarly,

areas 6 and 8 in the output markets (when summed across all output markets)

equal area 3 in the fiber market.

     The remainder of the value of the rights to use fiber is produced by the

drop in the supplier price of fiber from P°p to Pp.  In other words, the

value of the rights to use or purchase fiber is derived from the combination of

a rise in the demand price for fiber (from P^j? to P p) and a fall in the price

necessary to pay producers of fiber for their reduced output (P p to

P'^p).  As a result, those who enjoy the right to use or to purchase fiber gain

areas 2, 5, and 7 at the expense of the factors of production in both the fiber

and the output markets, and the consumers of the output goods made with fiber.

Because areas 5 and 7, summed across all output markets, equal area 1 in the

fiber market, the fiber users' gain can be measured as the sum of areas 1 and 2

in the fiber market.  Areas 4, 6, and 8 can be identified as the deadweight, or

social loss in this framework.  All of the rectangular areas represent

transfers from the three groups of market participants to those who have the

right to use or purchase fiber; after subtracting  these transfers from gross

losses, only the triangular areas  (4, 6, and 8) remain.
     *  The assumption that the higher  "full"  price of fiber is  not completely
passed on  to the buyers of output  goods is  significant.   Because this  is  a
short-run  analysis,  the producers  in the output markets  bear some of the  burden
of  the regulation.   In fact,  the extent to  which consumer (or gross) prices  do
not rise by the full amount of the increased fiber price, translated into
production cost increases for the  output goods, indicates the extent to which
producers  bear this  burden.  Thus,  (PQ  - P_j_)  is commonly thought of as a
measure of the proportion of the total  burden of the regulation  (P  -  B_]_)
borne by producers In the output markets.

                                      11-30

                  *  * *  DRAFT --  DO NOT QUOTE OR CITE  * * *

-------
     Although this analysis identifies all losses and transfers across markets,




it is necessary to distinguish between the burden borne by domestic and foreign




parties.  First of all, the rights to use or purchase fiber are welfare gains




which are assumed normally to accrue only to domestic parties.  However, a




major share (approximately 92%) of the producer surplus loss in the fiber




market is borne by foreign miners and millers because they are major suppliers




of asbestos fiber to the United States.  On the other hand, the distribution of




downstream output market losses is dependent on the trade orientation of each




individual market.  If a market is export oriented, i.e., domestic consumption




is less than the domestic production, all consumer and producer surplus losses




are borne by domestic parties -- foreign purchasers do not bear any losses.  It




is assumed that they can switch to alternative sources of asbestos product




supply and will do so rather than pay a higher price to U.S. producers.  For




markets with no trade, all losses are obviously borne by domestic parties.  For




markets with an import orientation,  i.e., domestic consumption is greater than




domestic production, all consumer surplus losses are borne by domestic




purchasers.  However, since foreign  primary processors are assumed to be




identical in terms of short-run producer surplus to their domestic




counterparts, producer surplus losses in these markets are borne by domestic




and foreign primary processors in the ratio of the amounts supplied.




               b.  Pro duct Bang




               Figure II-3 shows graphically the impact of banning one  or more




output goods on the fiber market  (top panel), a representative non-banned




market  (middle panel), and a representative banned market  (bottom panel).  The




mechanics of staged ban regulation are simpler than those described in  the




previous section  for fiber usage phase-down.  First, the price of fiber falls,




since the product bans reduce  the derived demand for fiber.   Consequently, the






                                      11-31




                  * * *  DRAFT  -- DO NOT QUOTE OR  CITE  * *  *

-------
                  FIGURE II-3
                STAGED BAN
               Fiber Market
 Price of
 Fiber
                 Q,  Q0
Quantity of
Fiber
       A Non-Banned Output Market
Price of
Output
Good
                                Output Good
        A Banned Output Market
 Price of
 Output
 Good
                         Quantity of
                         Output Good
                 11-32
            ._ nn
                          ni? r.TTir.  * * *

-------
remaining users of fiber are made better off.  In the top panel of Figure II-3,




the fiber market derived demand curve is shifted inward, reflecting the product




bans.  Since fiber supply is upward-sloping, the price of fiber falls from P y




to Pp.  The gross loss of fiber market producer surplus is the sum of areas 2




and 4  (top panel of Figure II-3), and the gain to the remaining purchasers of




fiber, i.e., the output-markets that are not banned, is area 2. The fall in




price  of fiber results in a drop in the price, from P0 to P-j_, of the output




products in the non-banned markets,  The gain in consumer surplus in each




non-banned output market is the sum of areas 5' and 6'  (middle panel of




Figure II-3).  Area 2 corresponds to the sum of areas 5' and 6' across all the




remaining (non-banned) output markets.  Area 4 in the fiber market is the




"deadweight" loss borne by the factors of production associated with the supply




of fiber.




     The bottom panel of Figure II-3 shows  the losses borne by the banned




markets.  Area 6 identifies the consumer surplus loss.  Since this analysis




assumes that long-run supplies of output goods using asbestos fiber are




perfectly elastic, there are no producer surpluses to lose in the long run.




However, there may be "quasi-rents" that accrue to factors in these markets




which  can be forfeited in the short-run.  Thus, areas 8 above the banned output




markets' supply schedules represent short run producer  surplus losses,




     Finally, the analytical distinction between domestic and foreign parties




can now be made clear.  As before, a major  share of producer surplus loss in




the fiber market is borne by foreign miners and millers.  The remaining




producer surplus loss is borne by their domestic counterparts.  Consumer




surplus losses in banned markets are borne  totally by domestic purchasers




whereas consumer surplus gains in non-banned markets are shared by domestic and











                                   -  11-33




                  * * * ' DRAFT - - DO MOT QUOTE OR CITE  * * *

-------
                                                            *&
foreign purchasers in the ratio of their respective demands.   This is so

because foreign purchasers will not be affected by product bans given their

alternative sources of supply.  On the other hand, "quasi-rent" losses in all

banned markets are borne by domestic and foreign primary processors in the

ratio of the amounts supplied.

               c.  Combinations of Fiber Phase-Down___and Product Bans.

               Figure II-4 shows graphically the impact of banning one or more

output goods followed by imposing a cap on the total usage of  fiber.  The ban

of certain output goods results in a reduced derived demand for fiber, shown by

the inward movement of the derived demand in the top panel.  A cap on the total

fiber usage is then imposed on the recomputed derived demand  (Qinter^•  ^ie

bans reduce the demand for fiber from Q0 to Qj_nter a^d the cap further reduces

fiber consumption and production to QQ to Qinter-  f^e mechanics  of modeling

this regulation are in two stages.  First, the staged ban element of the

regulation is simulated.  This causes an "intermediate" drop  in the price of

fiber since the product bans  reduce the derived demand of fiber to Q-Lnter-  ^s

in subsection b, areas 6 and  8 in the banned markets are computed and represent

loss of consumer surplus and  "quasi-rents" respectively (bottom panel of

Figure II-4).  However, since this is an intermediate step for the non-banned

output markets no computations are made for them.  The second stage  involves

the effects of  the fiber cap, which reduces fiber consumption and production to

Q]_ (top panel of Figure II-4).  From this point on the analysis  is similar  to
      •4*
         The only  gain  to  foreigners  accrues  to foreign purchasers,  given a.
 decrease in the price  of  downstream  products caused by a staged ban.   This is
 the  net   gain  to  foreign  purchasers  (prior to adding the losses suffered by the
 foreign  primary processors  and foreign domestic miners and millers) and accrues
 to the purchasers of goods  produced  by U.S.  primary processors.  The net gain
 to the remaining  foreign  fiber producers and purchasers (who purchase goods
 produced by non-U.S. primary  processors) due to the drop in the price of
 asbestos fiber caused  by  a  staged ban is captured by the slope of the asbestos
 fiber supply curve.

                                      11-34

                   * *  *   DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
                           FIGURE II-4


COMBINATION OF STAGED BAN AND FIBER USAGE PHASEDOWN
                       Fiber Market
           Price of
           Fiber
                Cap=QI     QINTER Q0  Quantity
                                      of Fiber
               A Non-Banned Output Market
          Price of
          Output
          Good
                                   Quantity of
                                   Output Good
                 A Banned Output Market
          Price of
          Output
          Good
                qt-0
                            11-35
Quantity of
      Good
           * * * DRAFT -- DO NOT QUOTE OR CITE * * *

-------
that described in subsection a.  The result of this restriction of fiber usage

translates into two effects of interest.  First, the value of the right to use

or purchase a. unit of fiber has a positive price if the fiber cap is effective

in reducing consumption.  That is, as long as Qj_ is less than Qj^ter' these

rights are valuable.  The value of the right to purchase, sell, or use one unit

of fiber in this period of time is equal to the difference between P-*-p and P"

•"-p, since P^p represents the value to the remaining users of the marginal unit

of fiber and P" p measures the marginal fiber supply price by the competitive

producers of fiber.

     The second consequence, as before, is that the total cost of producing

fiber-using output rises, reflecting the higher "full" price of fiber.  This

increased cost of production of the non-banned output goods is represented as

an upward shift of the supply schedules in these output markets (S gr to S sr\ ,

as shown in the middle panel of Figure II-4.

     Areas 1-8 in the fiber and the non-banned output markets have the same

interpretation as that in subsection a.  However,  (1) area 1 in the fiber

market equals the sum of areas 5 and 7 in all the  non-banned output markets,

and (2) area 3 in the fiber market equals the sum  of areas 6 and 8 in all the

non-banned output markets.

     The triangular areas in all three panels of Figure II-4 are the

"deadweight" losses.  These are:

          •    Area 4 in thefiber market which represents the
               deadweight losses borne by factors  of production
               associated with the supply of fiber; and

          *    Areas 6 and 8.. in^the output markets which represent
               the deadweight losses borne by consumers of the
               products made from asbestos fiber and the short-run
               deadweight losses borne by factors  of production
               (other than those in the fiber market) associated with
               the supply of each  of these different products
               respectively.


                                     11-36

                  * * *  DRAFT -- DO NOT QUOTE OR  CITE  * * *

-------
     The rectangular areas in Figure II-4 are important for identifying gross

losses and gains experienced by market participants.  In particular:

          *    Area 2... in.	the	fiber	market._ i s added to are a 4  to
               obtain the total loss of producer surplus by the
               factors associated with fiber production;

          •    Ar.ea....5._ in the non-banned output ^markets	ar.e....added__..tQ
               are a 6 in all output marke ts to obtain an estimate  of
               the gross consumer surplus losses experienced  in  all
               output markets;

          •    Are a 7 _inthe	non-bannedLoutput .markets are added to
               areaj^.in all...output markets to obtain an estimate  of
               the gross short-run producer surplus losses
               experienced by factors (other than those in the fiber
               market) associated with the production of all  goods;
               and

          •    Area....!	in___the.._...£lbe_r___market is added to area .2  to
               obtain the total value of the rights inherent  in  the
               allocation of the limited supply of scarce fiber
               dur ing the phas e-down.

     The distinction between domestic and foreign parties is  exactly  as  in the

case where only fiber usage phase-down was implemented, with  the exception of

losses in the banned markets,

               d,  groduct__ExemptloTis

               Some of the alternatives considered call for exemptions of

certain product categories from the regulatory mechanism.  In the  "product bans

only" alternatives, the exempted product categories get fiber at the  world

supply price based on the equilibrium that exists in after the required

products have been banned.   In the case of phase-down of  fiber usage, the

regulated products pay the "full price" of fiber whereas  the  exempted products

pay the "supply price" of fiber based on the  "cap" quantity and the  quantity

demanded by the exempted products.  In either  case, the fiber price  facing the
     *  Alternatively,  the measure of  the value  of these rights can be obtained
by the sum of area 2 in the fiber market and areas 5 and 7 in the non-banned
output markets.


                                     11-37

                  * * *  DRAFT  -- DO NOT QUOTE OR CITE  * * *

-------
exempted products under regulation is lower than the price in the baseline, and



therefore, a net consumer surplus gain accrues to the exempted product markets.




               d.  Engineering Controls



               The product categories that are exempted from regulation may be



                                                                      *$*
subject to alternative regulation in the form of engineering controls.   The




per unit cost of engineering controls is first offset against the decrease in




the price of the product (due to a lower fiber price facing the exempted




products).  If the cost increase due to the engineering controls exceeds the



cost decrease due to declining fiber prices, this net cost increase is




transmitted as a higher product price, thereby causing consumer surplus losses




as well.  Because it is possible for the decreased cost of fiber to be larger




or smaller than the increased costs associated with the engineering controls,




the net welfare impact on exempted markets subject to engineering controls




cannot be ascertained a priori.
       This  is  true  in  the  sensitivity  analyses  for  aftermarket  drum brake pads

and disc brake  linings  for  light  & motor vehicles.



                                      11-38



                  *  * *  DRAFT  -- DO  NOT QUOTE OR CITE   * *  *

-------
III.  0414 FOR ESTIMATIHG_CQSTS	.AND BENJFITS




     The previous chapter outlined the basic theoretical structure of the




models used to estimate the costs and benefits of the various regulatory




alternatives for controlling exposure to asbestos.  As that discussion makes




clear, a large amount of data is required to produce quantitative estimates of




these costs and benefits.  This chapter presents these input data in as concise




and understandable a form as possible.  Details of the derivations of the data




and the sources used appear in appendices referenced throughout this chapter.




     A.  Data Inputs,	for Estimating Benefits




     The input data for the benefits estimation divide into several distinct




groups -- exposure data, dose-response data, and background information on




population characteristics, mortality rates, and cure rates for the cancers




analyzed in this study.  This section presents these groups of data used in the




benefits estimation procedures.




          1.  Data Inputs for__Estimat:ing .Exposure,




          Quantitative benefits estimates under each of the various regulatory




alternatives depend on how far below the baseline exposure are the estimated




exposures under each regulatory alternative.  This, in turn, depends on the




output of each product and the number of people exposed and exposure level in




each setting under the relevant regulatory alternative.  Thus, from an




analytical perspective, the benefits of a given regulatory alternative are




driven by the difference between the exposures in the baseline and the




exposures under the regulation.




     As outlined in the previous chapter, the health effects of exposure to




asbestos products manufactured between 1987  and 2000 are estimated on a




product-by-product basis.  For each product, the population at risk is




subdivided into the following exposure categories t






                                     III-l




                  * *  *  DRAFT  --  DO NOT QUOTE OR CITE  * * *

-------
          *    Primary manufacturing,  both occupational and
               nonoccupational;

          H    Secondary manufacturing,  both occupational and
               nonoccupational;

          •    Installation, both occupational and nonoccupational;

          •    Use, both occupational and nonoccupational; and

          •    Disposal or repair, both occupational and
               nonoccupational.

     Occupational exposure occurs among individuals employed in the

manufacture, installation, use,  and repair or disposal of the asbestos product.

Nonoccupational exposure can be subdivided into ambient exposure and consumer

exposure.   Ambient exposure o'ccurs among persons living or working close to the

site of manufacture, use, repair, or disposal of the product.  Consumer

exposure occurs among those consumers who personally install, use, repair, or

dispose of the asbestos product.

     For each exposure category for each product, data on the mean level of

exposure and the number of people-exposed in a single year from products

manufactured in 1985 have been derived from compilations of exposure data

presented in detail in Versar (1987) and ICF (1988).  In general, the

occupational exposure information was generated using emissions estimates

produced by ICF while the nonoccupational data were estimated using emissions

estimates developed by ICF and dispersion modelling by Versar (1988).  Appendix

A.4 of this RIA reviews the calculations and assumptions used to develop the

detailed inputs for the benefits model from the information provided in the ICF

and Versar studies.

     The complete set of estimated exposure levels and numbers of people

exposed is presented in Tables III-l through III-5.  These tables report both

occupational and nonoccupational populations exposed and levels of exposure in

the five categories of asbestos-related activities based on 1985 estimates of

                                     III-2

                  * * *  .DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
                                       TABLE III-l. EXEQSUBE LEVELS  (IH MILLIOHS FIBERS  IUHALED PER YEAR)  AND HUMBER OF PERSOHS EXPOSED


                                                    10 miMAR? HANUFACTOHIHG PRODUCTS FOE QCCUPATXOHAL AHD RON-OCCUPATIONAL SEIIIK6S
O
o
o


§
H



f
(-3
M
o

M
1-3

W
 *


 *
1-1

M
                                                                             Occupational




                                                                    No,  of People     Mil. Fib./Yr
                                                                                                               Noisoccupational




                                                                                                  Bo. of People         Mil. Fib./Yr
1.
2.
3.
4,
5.
6.
7.
8.
9,
10.
11.
12.
13.
14.
15.
16,
17.
18.
19.
20.
21.
22.
23,
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
Commercial Paper
Rollboard
Mlllboarci
Pipeline Wrap
Beater-add Gaskets
High-grade Elect. Paper
Soofing Felt
Acetylene Cylinders
Flooring Felt
Corrugated Paper
Specialty Paper
V/A Floor Tile
Diaphragms
A/C Pipe
A/C Flat Sheet
A/C Corrugated Sheet
A/C Shingles
DrraB Brake Linings (OEM)
Disc Brake Pads, LMV (OEM)
Disc Brake Pads, OT
Brake Blocks
Clutch Facings
Auto. Transtniss, CoBp,
Friction Materials
Protective Clothing
Thread, yarn etc.
Sheet Gaskets
Asbestos Packings
Roof Coatin$s
Ron-Roofing Coatings
Asb, Reinforced Plastics
Missile iinara
Sealant Tape
Battery Separators
Arc Chutes
Drum Braka Linings (A/M)
Disc Brake Pads, LM? (A/M)
Mining and Milling


12
35
235
27

206


2

650
286
53

11
421
140
15
283
239
11
191

78
167
9
582
553
157
380
134
207
2
1,14+
776
155


145
134
110
113




111

87
270
47B

473
385
390
385
377
406
113
398

4S7
208
198
273
220
164
220
220


385
390
121


5,7*7,875
4,847,937
37,082,888
254,772






19,744,593
3,313,602
21,232,368

891,143
.9,292,154
3,681,659
1,704,883
9,785,424
8,761,571

12,922,247

16,306,866
43,468,616
7,031,484
84,570,429
70,389,388
19,923,386




25,249,953
20,383,263
841,214


0.0232
0.0476
0.0373
0.405






0.00000185
0.167
0.0218

0.00361
0.0575
0.0214
0.000000827
0.00388
0.0027

0.00234

0.00214
0.00561
0.0000534
0.00233 '
0.0000394
0.0018




0.0575
0.0214
0.407

-------
                                        TABLE  III-2.  EXPOSURE LETOLS (IN MILLIONS FIBERS INHALED PER YBAR)  AND HUMBES OF PEESONS EXPOSED
                                                    TO SECONDARY MAHHFACTlfRING PEDDOCTS FOR OCCUPATIONAL AMD RON-OCCUPATIONAL SETTINGS
 I
 "fj
 H
 O
 o
 ES    M
 s    a
€    *
 S
 M
 O
o
H
 *

 *

 *
                                                                             Occupational                            Nonocoupational


                                                                    No. of People     Mil. Fib./Yr      Ho. of People         Mil. Fib./Yr
i.
2.
3.
4.
5.
6.
7,
8.
9,
10.
11.
12.
13,
14.
15,
16.
17.
18,
19.
20.
21,
22,
23.
24,
25.
26.
27.
28.
29.
30.
31.
32,
33.
34.
35.
36.
37.
38.
Commercial Paper
Rollboard
Millboard
Pipeline Wrap
Beater-add Gaskets
High-grade Elect. Paper
Hoofing Felt
Acetylene Cylinders
Flooring Felt
Corrugated Paper
Specialty Paper
V/A Floor Tile
Diaphragms
A/C Pipe
A/C Flat Sheet
A/C Corrugated Sheet
A/C Shingles
Drum Brake Linings (OEM)
Disc Brake Pads, LMV (OEM)
Disc Braka Pads, HV
Brake Blocks
Clutch Facings
Auto. Transmiss, Comp.
Friction Materials
Protective Clothing
Thread, yarn ate.
Sheet Gaskets
Asbestos Packings
Roof Coatings
Hon~Soo£ing Coatings
Asb. Reinforced Plastics
Missile Liners
Sealant Taps
Battery Separators
Arc Chutes
Drum Brake Linings (A/M)
Disc Braka fads, LW (A/M)
Mining and Milling


448

1,296
30




149






731
46

19
4e

28

208
885
25


529




1,988
254



57

57
57




57






125
146

127
166

195

408
276
276


239




125
146


-------
                                       TABLE III-3. EXPOSURE LEVELS (IS MILLIONS FIBERS INHALED PER fEM) AMD MJMBER OP PEKSQHS EXPOSED

                                                   TO  INSTALLATION OF PRODUCTS  FOR OCCUPATIONAL AMD NON-OCCUPATIONAL  SEIIIHSS
                                                                            Occupational                            Boiioccupatlonal




                                                                   No. o£  People     Mil.  Fib./Yr       Ho.  of People         Mil.  Fib./Yr
 *


 o
 O
 O



 I


•a
 o
 H
O
n
M
 *


 *
1.
2,
3.
4.
5.
6.
7.
8.
9,
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
Conmerclal Paper
Sollboard
Millboard
Pipeline Wrap
Beater-add Gaskets
High-grade Elect. Paper
Roofing Felt 396
Acetylene Cylinders
Flooring Felt
Corragated Paper
Specialty Papar
V/A Floor Hie
Diaphragpis
A/C Pipe 933
A/C Flat Sheet 49
A/C Corrugated Sheet 7
A/C Shingles 323
Drum Brake Linings 
-------
                                           TABLE III-4.  EXPOSURE LEVELS (IH MILLIONS FIBERS INHALED PEE YEAR)  AHD HUMEEE OF PERSONS
                                                       EXPOSED 10 OSE OF FHODtlCTS FOR OCCUPATIONAL ABB NOK-OCCUPATIOHAL SETTINGS
                                                                            Occupational

                                                                   So. of People     Mil. Fib./Yr
                                                                                  Nonoecupational

                                                                     Ro. of People         Mil. Fib./Yr
O
o
g
H
S
w
o
M
H

*
*
 1.  Commercial Paper
 2.  Sollboacd
 3.  Millboard
 4.  Pipeline Hrap
 S.  Beater-add Gaskets
 6.  High-grade Elect. Paper
 7,  Roofing Felt
 8.  Acetylene Cylinders
 9.  Flooring Felt
10.  Corrugated Paper
11.  Specialty Pajpar
12.  V/A Floor Tile
13.  Diaphragms
14.  A/C Pipe
15.  A/C Flat Sheet
16.  A/C Corrugated Sheet
17.  A/C Shingles
18.  Drum Braka Linings (OEM)
19.  Disc Braka Pads, LMV (OEM)
20.  Disc Braka Pads, SV
21.  Brake Blocks
22,  Clutch Facings
23.  Auto. Transffiiss. Camp,
24.  Frictioti Materials
25.  Protective Clothing
26,  Thread, yarn etc.
27,  Sheet Gaskets
28.  Asbestos Packings
29.  Soof Coatings
30.  Son-Roofing Coatings
31.  Asb. Reinforced Plastics
32.  Missile Liners
33.  Sealant Tape
34,  Battery Separators
35.  Arc Chutes
36.  Drum Brake Linings (A/M)
37.  Bisc Brake Pads, LM? (A/M)
38.  Mining and Milling
                                                                                                         60,943,018
                                                                                                         34,659,752

                                                                                                        226,546,000
                                                                                                                                 0.00058
                                                                                                                                 0.00064

                                                                                                                                  0.0061
                                                                                                        165,602,982
                                                                                                        191,886,248
                                                                                                                                 0.00058
                                                                                                                                 0.00064

-------
                                       TABLE III-5. EXPOSURE LEVELS (IH MILLIONS FIBERS IHHALEB PER YEAR) AHD BOMBER OF PERSONS EXPOSED

                                                    TO REPAIR/DISPOSAL OF PRODUCTS  FOR OCCUPATIONAL AND HOR-QCCBPAtlGNAL SETTINGS
                                                                             Occupational



                                                                    Ho.  of People     Mil,  Fib./YE
             Sonoc cupational



Ho. of People         Mil. Fib./Yr
 *

 *

o

?
IT)
O
o

53
O
t-3
O
H
O


o
M

w


if
1.
2.
3.
4.
5.
6.
7.
8.
9.
10,
11.
12.
13,
14.
15.
16.
17.
18.
19.
20.
21.
22.
23,
24.
25.
26.
27,
28.
29.
30.
31.
32,
33.
34,
35.
36.
37.
38,
Cownerctal Paper
Rollbaard
Millboard
Pipeline Wrap
Beater-add Gaskets
High-grade Elect. Paper
Roofing Felt 263
Acetylene Cylinders
Flooring Fait
Corrugated Paper
Specialty Paper
V/A Floor Tile
Diaphragms
A/C Pipe
A/C Flat Sh«8t 61
A/C Corrugated Sheet 9
A/C Shingles 225
Drum Brake Linings (OEM)
Disc Brake Pads, LMV (OEM)
Disc Brake Pads, HV 117
Brake Blocks 3,985
Clutch Facings 73
Auto. Transmiss. Consp.
Friction Materials 43
Protective Clothing
Thread, yarn ate.
Sheet Gaskets
Asbestos Packings
Roof Coatings
Hon~Roo£ing Coatings
Asb. Reinforced Plastics
Missile Liners
Sealant Taps
Battery Separators
Arc Chutes
Drum Brake Linings (A/M) 86,398
Disc Brake Pads, LM9 (A/M) 32,568
Hining and Milling






296 171,136,373 0.0000067







2,080 171,136,373 0.0000173
2,080 171,136,373 0.0000025
244 171,136,373 0.0000067
49,442,265 0.0123
27,453,272 0.00624
390 170,871,494 0.000000587
388 170,871,494 0.0000171
125

120











378 134,351,509 0.0123
386 151,989,122 0.00624


-------
asbestos-related production activities.  In some cases, additional information




useful for developing exposure estimates exists concerning production




activities after 1985,  In the exposure assessment study (IGF 1988), this




information was taken into account.  Similarly, this additional information is




taken into account in the cost/benefit modeling through the estimated future




growth rates for each asbestos-containing product.  Hence, to render the




exposure information reported in the exposure assessment document consistent




with the time frame of the cost/benefit calculation models, the exposure data




developed in the exposure assessment was adjusted (as outlined in Appendix A.4




of this RIA) from post-1985 production activity levels to 1985 production




activity levels.  These adjustments are then "undone" as the cost model moves




through the early years of the simulation period.




     In each table, when no data are listed for a particular product or




exposure setting, this means that no data were available for the particular




product and exposure category.  In many of these cases, no exposure occurs.




However, if in some cases exposures occur even though no data are available,




the estimated benefits for the regulatory alternatives will be biased downward.




One of the analyses conducted to determine the sensitivity of the cost/benefit




results focuses on this lack of exposure information.  The results of that




analysis are discussed in Chapter  IV of this RIA.  Finally, as  the tables




indicate, the light/medium vehicle disc and drum brakes are separated into the




original equipment and aftermarkets.   This is necessary because one of  the




regulatory alternatives treats the aftemarket differently from the original




equipment market.  In particular,  the  aftermarket is banned a number of years




after the original equipment market in Regulatory Alternative J,  The exposure




estimates presented for these two  brake markets separated  into  the original




equipment and aftermarkets were derived from overall brake market exposures  and






                                      III-8




                  * * *  DRAFT  --  DO NOT QUOTE OR CITE *  * *

-------
concentrations as outlined in Appendix A.4 of this RIA.




          2,  Data. Inputs irfor	grojecting__Health .Effects.




     As discussed, in the previous chapter, the dose-response relationships used




to estimate cancers attributable to asbestos exposure are the linear no-




threshold dose-response relationships proposed by Nicholson (1983).  In




addition to the exposure information, the following data inputs are also used




in the projections of health effects.




     Dose-responseconstants were estimated using data from human studies of




asbestos related diseases.   As Table III-6 indicates, these vary in magnitude




considerably.  The values for the dose-response constants used in this analysis




are the mean values proposed by the CPSC  (1983) of l.OE-2 (f-yr/cc)"^ for lung




cancer and l.OE-8 (f-yr/cc)~^- for mesothelioma.




     The unit .measure.	for^exposure.., level  in the equations used in the OSHA




analysis is fibers per cubic centimeter  (f/cc).  These equations were developed




from studies that used disease data from  occupationally exposed workers with a




typical exposure of 8 hours per day, 250  days per year and a breathing rate of




1.3 cu m/hour.  For a worker so exposed,  an exposure level of 1 f/cc is




equivalent to 2,600 million fibers breathed per year (1 x 1,000,000 x 1.3 x 8 x




250).  However, OSHA's dose-response relationships are used in this study for




exposure categories and activities where  exposure levels, breathing rates, and




hours-exposed-per-year may all be different than those for a full-time worker.




Hence, the exposure levels for these other categories  in terms of millions-of-




fiber-breathed-per-year were derived based on the exposure time, estimated




breathing rate, and numbers of days per year for each  exposure category and




setting in this study.  The resulting estimates of exposure -- in terms of




millions of fibers breathed per year -- were then divided by a normalizing




factor of 2,600 millions of fibers per year to  convert these exposure levels






                                     HI.9




                  * * *  DRAFT -- DO NOT  QUOTE  OR CITE * * *

-------
        Table III-6.  Estimated Values of Lung Cancer and Mesothelioma
                            Dose-Response Constants
                                     Estimated "Value        Estimated Value
         Mortality Study           Lung Cancer Constant  Mesothelioma Constant

                                       (f-yr/cc)-1           (f-yr/cc)'1
Finkelstein et al.  1983                    4.8 E-2                1.2  1-7

Seidman et al. 1979, pp. 61-89             6.8 E-2                5.7  E-8

Dement et al.  1982                        2.3-4,4 E-2

Selikoff et al. 1979, pp. 569-585          1.0 E-2                1.5  E-8

Peto 1980, pp. 829-836                     1.0 E-2                7,0  E-10

Henderson and Enterline 1979,            3.3-5.0 E-3
  pp. 117-126

Hughes and tfeill 1980, pp. 627-637         3.1 E-3

Rubino et al.  1979                          1.7 E-3

Nicholson et al.  1979                      1.2 E-3

McDonald et al. 1980                       6,0 E-4

Berry and Newhouse  1983, pp. 1-7           6,0 E-4


Source:  Chronic Hazard Advisory Panel on Asbestos.  1983 (July),   Report  to
         the U.S. Consumer Product Safety Commission.  Washington B.C.
          p. 11-129.
                                    111-10

                 * * *  DRAFT  -- DO NOT QUOTE OR CITE  * * *

-------
into OSHA's full-time-equivalent worker exposure level  (measured as f/cc)




before use in the dose-response relationships.




     For all products and exposure categories, future exposure  levels are




assumed to remain constant at the levels presented in the exposure data tables




(Tables III-l through III-5 in the previous subsection).  Changes in production




levels are assumed to change the number of people exposed,




     Age-specific £ive-year__death rates, for	lung____cancer.|t. ...gastrointestinal




cancer, mesothelioma.and,all.other causes attributable  to agbestosexposure




and to background„causes	are ..estimated.^.  This analysis  assumes  that




mesothelioma death rates do not depend on  age, sex, race, or smoking habits.




However, excess lung cancer and gastrointestinal cancer  death rates and other




mortality rates do vary according to these demographic  characteristics.  For




simplicity, it is assumed that the nonoccupational population is identical to




the U.S. population in terms of sex, race, and smoking habits,  and age




distribution for 1980 (see Table III-7) and will remain constant until 2000.




All occupational categories are assumed to have the  same  demographic




characteristics and stay constant until 2000.  These are  estimated from




industry data for 1983 (see Table III-7),  Smoking habits are assumed  to be the




same as in the general population.  If the population was allowed to change




over time, the benefits estimates would be lower.  For  all products and




exposure categories, future exposure levels are assumed to remain constant at




the levels presented in the exposure data tables  (Tables III-l  through III-5 in




the previous subsection).  Changes in production  levels are  assumed to change




the number of people exposed.




     Age-specific five-year baseline lung cancer  rates  were  taken from the




Vital  Statistics  of the United States for 1977  (U.S. Department of Health and




Human  Services, 1981).  Baseline lung cancer  for  the year 1990  is projected






                                     III-ll




                  * * *  DRAFT -- DO NOT QUOTE OR CITE   * *  *

-------
   Table III-7.  Sex,  Race, and Age Distribution of Exposed Populations
                          Pr op_Qr_t io_n_o£_JEopul at ion (Bee imal Share1
       Characteristic          Occupational     Nonoccupational


                                   1983               1980
         Sex

         Male                       0.79                0.49
         Female                     0.21                0.51

         Race

         White                      0.88                0.88
         Nonwhite                   0.12                0.12

         Age
0
10
20
30
40
50
60
70
80
- 9
- 19
- 29
- 39
- 49
- 59
- 69
- 79
- 89
0.0
0.1
0.205
0.210
0.193
0.175
0.117
0.0
0.0
0.146
0.174
0.176
0.139
0.108
0.099
0.083
0.055
0.020
Sources:   For occupational:   Research Triangle
          Institute 1985 (August).   Regulatory Impact
          Analysis of Controls on Asbestos and Asbestos
          Products.  Prepared for the Office of Pesticides
          and Toxic Substances, U.S. EPA.   Washington, D.C.
          Appendix B.  For nonoccupational: UDOC.  1980.
          U.S.  Department of the Census.   Statistical
          Abstract of the United States.   Washington B.C.:
          Bureau of the Census.
                                111-12

             * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
using the 1977 rates and Inflated for the older cohorts as suggested in Doll

and Peto (1981),   Increases of 2 percent per year for men over 50 and 4 percent

per year for women over 40 are assumed.  These increases are projected because

of past increases in smoking.  Since smoking rates have been declining in

recent years, the projected 1990 lung cancer death rates are likely to

overstate the baseline death rates that will be observed in the twenty-first

century.

     Five-year death rates for all causes by sex, race, and age are estimated

based on the 1978 U.S. life tables and are assumed to remain constant in the

future (Cooper et al. 1983).  All persons alive at age 89 are assumed to die

during their ninetieth year.

     Finally, to estimate the avoided cases of cancer from the estimates of

avoided cancer deaths, the cure rates for the three asbestos-related cancers

are estimated from the equation:

        (Relative survival rate at time t)  =  c + (1-c) (1-b)*-

where:

          c »•  cancer cure rate (the proportion of people with
               the disease for whom it is no longer life
               threatening);

          b =  annual mortality rate for dying patients; and

          t =  time  since diagnosis (years).

     Estimated values for both c and b are obtained using publicly available

data on survival for lung cancer, gastrointestinal cancer (Axtell et al. 1986)

and mesothelioma (Chahinian  1982).  The values of the cure rates estimated and

used in the analysis are 8 percent for lung cancer, 36 percent for

gastrointestinal cancer, and 2 percent for mesothelioma.  The cure rates were

used to convert estimates of cancer deaths  to estimates of cancer cases as

follows:  Cases  =   Deaths / (1 - Cure Rate).


                                     111-13

                  *  * *  DRAFT  -- DO NOT QUOTE OR CITE  * * *

-------
     B.  Data,InputsforEstimating Costs

     As Is apparent from the discussion of the theoretical approach for

estimating the costs presented in the previous chapter, a large amount of

detailed information is required to develop quantitative estimates of the

regulatory alternatives' costs using these approaches.  This section presents

the data used in developing quantitative cost estimates for the various

regulatory options.  Detailed presentations of the derivations of and sources

for the data appear in the Appendices to this report, as noted below.

     The data elements required as inputs for the Asbestos Regulatory Cost

Model  (ARCM) consist of three separate classes of data: (1) data required for

each separate asbestos product market, (2) information on substitutes for each

asbestos product, and (3) data on the asbestos fiber market.  This section

describes these groups of input data and reports the values of the variables

used in the model,   Of course, all of these data interact in the ARCM to

produce year-by-year estimates of quantities, prices, and related information

for both the baseline and the regulatory scenarios, as shown in the following

chapter.'  Hence, the purpose here is simply to indicate what these input values

are and in which appendix more detail is provided on derivations and sources.

               a.  Data for Asbestos PrQduct..iMarket.s

               The data required for each asbestos product market consist of:

          •    Baseline prices and domestic production quantities for
               all product markets in 1985.
        The model is designed to accept information for any year as input.  To
avoid confusion, we refer to 1985 as this is the year for which all data are
available at the time of writing.

                                     111-14

                  * * *  DRAFT --DO NOT QUOTE OR CITE  * * *

-------
          •    Amount of asbestos (In tons) used per unit of output,  In all
               output markets.  This coefficient can be derived if information
               on the amount of asbestos fiber used in each output market (for
               the same data year) is available.  It "is computed as the ratio
               of the amount of asbestos fiber used by a market to the baseline
               output quantity produced.  In the remainder of this section this
               coefficient is referred to as the Product Asbestos Coefficient
               (PAG).

          i    The service life of the asbestos product.  This is
               necessary for calculating the present values of
               substitute prices.

          •    The consumption-production ratio for all output
               markets.  This ratio captures the import-export
               orientation of each market and can be computed by
               taking the ratio of domestic consumption to domestic
               production of output goods.   A value greater than one
               implies an import orientation, and a value less than
               one implies an export orientation.

          «    Baseline output quantities for all product markets,
               for the specified period.  These are obtained by
               applying the annual growth rates developed in the
               Baseline Projections Model described in Appendix A.I
               to the output quantity data available for the data
               year.

          •    Quasi-rents (i.e., short-run producer surplus) per
               unit of output and the duration of these quasi-rents,
               by market.

     The first four of these six pieces of information required for the ARCM

were obtained through an extensive survey of asbestos product manufacturers and

importers designed to update previous information on asbestos markets and

products.  This results of this survey are reported in detail in Appendix F.

Based on the survey,  Table III-8 reports for each product, the (1) the baseline

quantity (1985 value), (2) the baseline price (1985 value), (3) the ratio of

imports to domestic production, (4) ratio of asbestos fiber usage per unit of

the product, and (5)  the service life of the asbestos product.  Again, as the

table indicates, there are 35 distinct asbestos product categories.  In

modeling the effects of the various regulatory alternatives, however, two

product categories, drum and disc brakes for light/medium vehicles, have been


                                     111-15

                  * * *  DRAFT -- DO.NOT QUOTE OR CITE  * * *

-------
                                                        TABLE III-8.  ASBESTOS PRODUCT HAEKET DATA USED IN MCM
O
o
<§
O
H
M
 o
 H
 1-3
 PS
 *

 *

1.
2.
3,
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.

27.
28.
29.
30.

31.
32.
33.
34.
35.
36.
37.
Product Category
Co-iHBercial Paper
Kollboard
Millboard
Pipeline Wrap
Beater-add Gaskets
High-grade Electrical Paper
Roofing Felt*
Acetylene Cylinders
Flooring Felt
Corrugated Paper
Specialty Papers
Vinyl-Asbestos Floor Tile
Asbestos Diaphragms
Asbestos-Cement Pipe
Flat A-C Sheets
Corrugated A-C Sheets*
A-C Shingles
Drum Brake Linings (OEM)
Disc Brake Pads, LW COEM)
Disc Brake Pads CHV)
Brake Blocks
Clutch Facings
Automatic Transmission Components
Friction Materials
Asbestos Protective Clothing
Asbestos, Thread, Yarn, and
Other Cloth
Asbestos Sheet Basketing
Asbestos Packing
Hoof Coatings and Cements
Hon-Roofing Coatings, Compounds,
and Sealants
Asbestos-Reinforced Plastics
Missile Liner
Sealant Tape
Battery Separators
Arc Chutes
Drum Brake Linings (A/M)
Disc Brake Pads, LM9 
-------
divided into the original equipment market and the aftermarket, the latter of




which refers to replacements of brakes.  This is to facilitate analysis of




options that regulate the original equipment and aftermarket sectors




differently (e.g., Regulatory Alternative J).  In addition, two product




categories -~ "battery separators and arc chutes -- are not simulated due to




lack of detailed information on substitutes for these products.  These are




extremely small users of asbestos, so their absence from the explicit




simulation is not likely to affect the quantitative estimates of the costs and




benefits of the regulatory alternatives for the other products.  Arc chutes and




battery separators are, however, intended to be included in the product bans or




phase-downs of fiber use over time (their exclusion from the simulation is not




intended to indicate an exemption).  As a result, while there are 35 physically




distinct product categories, the analysis operates in terms of 37 separate




products because of the possibly different regulatory treatment for the two




brake product markets, of which 35 are actually included in the simulations.




     The baseline growth rates for each product were developed for three




alternative scenarios.  The "High Decline" scenario is based on the actual




growth rates experienced in each of these product markets  from 1981 to 1985,




These two years were selected as basepoints  for computing  these growth rates




because these are the two years with the most complete information:  1981 was




the TSCA Section 8(a) reporting requirement, which yielded a fairly complete




accounting of asbestos use, and 1985 is the year for which data were collected




in the IGF Asbestos Market survey.  The term decline is used because virtually




all products experienced negative rates of growth during this period.  Thus,




the "High Decline" scenario uses the actual  negative rates of growth for each




product to project the baseline usage  of fiber and the output  of the products




through time.  This is reported in Table III-9 as "High Decline".






                                     111-17




                  * * *  DRAFT  -- DO NOT QUOTE OR CITE  *  * *

-------
     TABLE XII-9.   BASELIKE SEOWTH HATES OF ASBESTOS PRODUCTS:  1985-2000
                                                  Growth Sates  1985-2000 (X)

1.
2.
3.
4,
5.
6,
7.
8.
9.
10,
11.
12.
13.
14.
15.
16.
17,
18.
19,
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35,
36.
37.
Product, Category
Commercial Paper
Sollboard
Millboard
Pipeline Wrap
Beater-Add Gaskets
High Grade Electrical Paper
Sooting Fait
Acetylene Cylinders
Flooring Felt
Corrugated Paper
Specialty Paper
V/A Floor Tile
Asbestos Diaphragms
A/C Pipe
A/C Sheet, Flat
A/C Sheet , Corrugated
A/C Shingles
Drum Brake Linings (OEM)
Disc Brake Pads, LtW (OEM)
Disc Brake Pads (W)
Brake Blocks
Clwteh Facings
Automatic Transmission Components
Friction Materials
Asbestos Protective Clothing
Asbestos Thread, etc.
Sb««t Gaskets
Asbestos Packing
Roof Coatings
Non-Hoofing Coatings
Asbestos -Reinforced Plastics
Missile Liner
Sealant Tape
Battery Separators
Arc Chutes
Drum Brake Linings (A/M)
Disc Brake Pads, Wff (A/M)
Low
Decline .
n/a
n/a
0.00
0.00
0.00
0,00
0.00
0.00 a
n/a
n/a
0.00
n/a
0.00
0.00
0.00 b
0.00
0.00
c
c
0,00
0.00
0,00
0.00 d
0,00
B/«
0.00
0.00
0.00 e
0.00 t
0.00 g
0.00 h
0,00
0.00
A**
***
c
c
Moderate
Decline
n/a
n/a
-16.15
-19.51
-5.39
-0,14
0.00
-8. 41 a
n/a
n/a
-16.25
n/a
0.00
-5.98
-26,36 b
0.00
-4.89
e
e
-17.67
-15.96
-0.27
0.00 d
-8.13
n/a
-16.96
-11.59
-14,92 e
-0.76 f
-13.94 S
-10,48 h
0,00
3,27
**#
ftAft
C
C
High
Decline
n/a
n/a
-32.31
-39.03
-10,77
-0,28
0,00
-16.82 a
n/a
n/a
-32.50
n/a
0.00
-11.95
-52.72 b
0.00
-9.78
c
0
-35.33
-31.93
-0.54
0.00 d
-16,26
n/a
-33.92
-23.17
-29,84 e
-1,53 f
-27.89 g
-20.96 h
0.00
6.54
***
***
c
0
   a Growth rate for 1985-86 is -21.42%.

   b Growth rate for 1985-86 is -77,172,

   c Growth rates for this category are based on the Brakes  Model and are different for
     each year.   See next table for all growth rates.

   d Growth rate for 1985-86 is -54.70%, for 1986-87 is -78,302, and for 1987-88 is -4,40%.

   e Growth sate for 1985-86 is -66.67%.

   f Growth rats for 1985-86 is -26.33%.

   g Growth rate for 1985-86 is -19.41%,

   h Growth rate for 1985-86 is -12.102,

n/a; Not applicable as products are no longar made or sold in the United States,

 *** fhis product is not Included in the ARCH simulations.
                                 111-18

       * *  *   DRAFT  --  DO  NOT QUOTE  OR CITE  * *  *

-------
     The second scenario for projecting the baseline usage of fiber and output




of the asbestos products was to halve the rates of decline in the High Decline




scenario to product the "Moderate Decline" scenario.  This is also shown in




Table III-9.  Finally, the "Low Decline" scenario was generated by assuming




that the future output (and usage of fiber) of each product market would remain




the same as the 1985 figure developed in the ICF survey,  This Low Decline




scenario, as shown in Table III-9, represents the largest amount of fiber




consumption and product output over the course of the simulation.




     It is difficult to identify one of the baseline growth rate scenarios as




the correct one for several reasons.  The "High Decline" baseline, in effect,




assumes that future substitution away from asbestos and asbestos products would




continue to occur through the future at the rates experienced in the past.  On




the other hand, the "No-Decline" baseline assumes no continued substitution




away from asbestos in the future.  The former assumption is probably an




overstatement of future declines in asbestos products because eventually the




pace of substitutions may decline as substitutes for remaining products and




uses become increasingly difficult to identify.  On the other hand, assuming no




further substitution in the future would probably overstate the levels of




future asbestos product output.  Because of this uncertainty, the results




presented in this RIA are provided for all three of the baseline product growth




rate scenarios.




     There are a few exceptions  to the general rules outlined above for




developing the baseline product market growth rates.  For a few products, such




as missile liner, so little was known about the past, present, and future




output and usage of fiber that the growth rate was  set equal zero.  In a few




other cases, additional information was available from the ICF survey




concerning the output of products in 1986, 1987, and 1988,  In these cases, the






                                     m-19




                 ' * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
listed growth rates reflect this information.

     Finally, two products (disc and drum brake OEM and aftermarkets for light

and medium vehicles -- Products 18, 19, 36, and 37) have growth rates developed

using a more detailed modeling procedure that yielded year-by-year growth rates

throughout the duration of the simulation.  These year-by-year growth rates

(for the Low, Moderate, and the High Decline baseline scenarios) are reported

in Table 111-10.  The methods and data used to estimate these growth rates are

discussed in Appendix A-l of this RIA,

     Finally, the quasi-rents for each product market are shown in

Table III-ll.  As discussed in the previous chapter, quasi-rents are payments

that are necessary in the long run to" the producers and factors of production

involved in supplying goods to maintain supply, but which are forfeitable in

the short run.  Naturally, the amount of these quasi-rents that are actually

lost under any given regulation depends on a number of factors which are

generated in the course of simulating the regulation.  Thus, Table III-ll

reports only the total quasi-rents that would be lost if all markets were

banned immediately (the Domestic fie World Quasi-Rent Loss columns).

               b.  Asbestos Product.	Subs. tltutes

               Another set of inputs to the ARGM consists of information on

substitutes for each asbestos product.  The following information is necessary

for estimating product demand curves, and therefore, the derived demand curve

for asbestos fiber.

          •    Price of the substitute in 1985 in  the same units as
               the price of the asbestos product.

          •    The market share for each substitute.  This refers to
               the share of the existing market that shall switch to
               the substitute, given the non-availability of the
               asbestos product.
                                     111-20

                  * * *   DRAFT  --DO NOT QUOTE  OR CITE  * * *

-------
                                                  TABLE  III-10.   BASELINE GROWTH RATES OF PRODUCTS 18,  19,  36,  AMD 37; 1985-2000
O
O.
O
O
O
H
W
O
H
H
      M
      M
      1-0
Growth Sates
IS. Drum

Year
1985-19863
1986-1987
1987-1988
1988-1989
1989-1990
1990-1991
1991-1992
1992-1993
1993-1994
1994-1995
1995-1996
1996-1997
1997-1998
1998-1999
1999-2000
Low
Decline
1.52
3,56
0.59
-1.94
-7.87
-3.18
11. SI
6.46
-5.83
-3.23
6.89
8.68
-2.40
-5.26
4.61
Brake Linings (OEM)
Moderate
Decline
1.52
-7.94
-11.98
-15.95
-23.22
-22.55
-16.37
-29.03
-52.92
-100.00
0,00
0.00
0.00
0.00
0.00
High
Decline
1.52
-17.15
-24 . 56
-34.63
-53.93
-100.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
19, Disc Brake Pads,
tow
Decline
-54.05
3.57
0,54
-1.92
-7.89
-3.16
11.57
6,44
-5.92
-3.27
6.95
8.69
-2.47
-5.31
4.59
Moderate
Decline
-54.05
-17.14
-24.60
-34.62
-53.94
-100.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Uff (QEH)
ffigh
Decline
-54.05
-30.95
-49.73
-100.00
0.00
0,00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1985-2000
36. Drtun
Low
Decline
-3.54
-8.66
6.46
-0.16
-1.45
-1.95
4.85
-0.02
-3.45
-0.80
7.26
2.70
-4.62
-1.59
7.43
(%>

Brake Linings (A/M)
Moderate
Decline
-3.54
-8.66
6.46
-0.16
-1.45
-6.48
0.18
-4.61
-7.40
-9.93
-4.84
-10.37
-16.05
-19.15
-7.92
High
Decline
-3.54
-8.66
6.46
-0.16
-1.45
-10.11
-3.90
-8.98
-11.53
-20.35
-7.56
-12.65
-16.39
-26.97
-11.25


37. Disc Brake Pads,
Low
Dee line
-6.25
-7.04
-1.36
-4.07
-18,35
-6.64
-4.15
-8.57
-22.28
-5.83
-1.93
-6.99
-19.60
-4.02
1.77
Moderate
Decline
-6.25
-7.04
-1.36
-4,07
-18.35
-9.13
-7.03
-11.87
-26.73
-14.25
-9.86
-16.47
-32.36
-18.12
-12.76

LMV (A/M)
High
Decline
-6.25
-7.04
-1.36
-4.07
-18.35
-10.79
-9.04
-14.29
-24 . 82
-13.31
-13.39
-21,18
-29.38
-14.70
-18.05
                          Growth rates £or 19S5-86 are based on actual information available.

-------
                                          TABLE III-ll.   QllASI-REif LOSSES ASSOCIATED WITH AN IMMEDIATE BAH OF ALL ASBESTOS PRODUCTS
O
O
o
S3
s


I
w

i.
o
H
H

1.
2.
3.
4.
5,
e.
7.
8.
<)_
10.
11.
12,
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33,
34.
35,
36.
37.

Product Category
Conraercial Paper
Sollboard
Millboard
Pipeline Wrap
Beater-add Saskets
High-grade Electrical Paper
Roofing Felt
Acetylene Cylinders
Flooring Felt
Corrugated Paper
Specialty Papers
Vinyl-Asbestos Floor file
Asbestos Diaphragms
Asbestos-Cement Pipe
Flat A-C Sheets
Corrugated A-C Sheets
A-C Shingles
Drum Brake Linings (OEM)
Disc Brake Pads, LM? (OEM)
Disc Brake Pads (HV)
Brake Blocks
Clutch Facings
Automatic Transmission Components
Friction Materials
Asbestos Protective Clothing
Asbestos Thread, Yarn, etc.
Asbestos Sheet Gasfcating
Asbestos Packing
Roof Coatings and Cements
Non-Roofing Coatings, etc.
Asbestos -Reinforced Plastics
Missile Liner
Sealant tape
Battery Separators
Arc Chutes
Drum Brake Linings (A/M)
Disc Brake Pads, LM? (A/M)

Industry Segment
Classification
Papers and Felts
Papers and Felts
Papers and Felts
Papers and Felts
Papers and Felts
Papers and Felts
Asbestos Roofing Felt
Acetylene Cylinders
Papers and Felts
Papers and Felts
Papers and Felts
Vinyl-Asbestos Floor TiJLe
Chlor-Alkali Industry
Asbestos-Cement Pipe
Asbestos-Cement Sheet
Asbestos-Cement Sheet
Asbestos-Cement Shingle
Friction Products
Friction Products
Friction Products
Friction Products
Friction Products
Friction Products
Friction Products
Textiles and Packing
Textiles and Packing
Sheet Gasketing
Textiles and Packing
Coatings and Sealants
Coatings and Sealants
Asbestos-Reinforced Plastics
Coatings and Sealants
Coatings and Sealants
Textiles and Packing
Arc Chutes
Friction Products
Friction Products

Conversion
Cost
Perpetuity
($/unit)
0.19
0.19
0.19
0.001
0.19
0.19
0.00
0.00
0,19
0.19
0.19
0.00
19,801.60
0.21
19.2?
19.27
3.31
0,005
0.005
0.005
0.005
0.005
0.005
0.005
0.00
0.00
0.16
0.00
0.00
0.00
0,00
0,00
0.00
***
**-*-
0,005
0.005

Reformulation
Cost
Perpetuity
($)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
248,500
308,000
24,500
154,000
31,500
10,500
105,000
0
0
0
0
40,600
78,400
16,800
12,600
7,000
###
Aft-fr
248,500
308,000

Domestic
Quasi-Sent
Loss
('000 $)
0.00
0.00
1.58
4.24
44.80
1,89
0.00
0.00
0.00
0.00
1.18
0.00
2,763,737,60
45,188.12
1,421.68
0.00
8,352.69
5,693.81
4,040.04
361,20
2,504.67
918.72
154.11
2,122.82
0.00
0.00
8,245.50
0.00
580.00
1,120.00
233.01
180.00
100.00
*•**
***
9,023.38
7,170.51
2,861,201.57
World
- Quasi-Rent
Loss
{'000 $)
0.00
0.00
1.58
10.61
45.70
1.89
0.00
0.00
0.00
0.00
1.18
0.00
2,763,737.60
45,766.53
1,634.93
1,062.33
11,443.19
6,547.88
4,807.65
361.20
2,529.71
1,028.97
154.11
2.122.B2
0.00
0.00
8,822.69
0.00
580.00
1,120.00
240.00
180.00
100.00
***
•fi-fi*
1Q.376.S9
8,532.91
2,871,210,37
                              ***  Product is not included  in ASCM simulations.

-------
          «    The service life of the substitute.  This information
               is used to obtain the present value of the
               substitute's price, for the life of the asbestos
               product.


     Much of this information was obtained from the IGF Asbestos Market Survey

conducted in 1986 to update existing information on asbestos product markets

and substitutes.   Appendix F reports the results of this Use and Substitutes

survey.  As indicated in that appendix, the survey results divide the product

markets into submarkets for which a given substitute is appropriate.  Hence,

there are actually far more than the 35 physically distinct product markets to

consider for purposes of defining substitution possibilities and timing.

     Table III-12 summarizes the substitutes information reported in detail in

Appendix F of this RIA on a product-by-product basis.  This table lists name of

the relevant substitute, its price, its useful life, and the market share which

this substitute would capture in the absence of the asbestos-containing

product.

               c.  Asbestos Fiber Market

               Given the. information on the amount of asbestos used per unit of

output, and the amount of output in all product markets, the additional data

elements required for this market are:

          •    Price of asbestos fiber per ton in 1985.  This price
               will be a weighted average of the prices for the
               various grades of asbestos fiber, i.e., the price of
               the "representative" asbestos fiber, which is assumed
               to be the only one used in the downstream markets.

          •    The elasticity of fiber supply.  This is used in
               conjunction with price and quantity data to obtain the
               equation for the fiber supply curve.

          •    The proportion of fiber supply imported from foreign
               nations.
                                     111-23

                  * * *  DRAFT  -- DO NOT QUOTE OR CITE  * * *

-------
                           TABLE III-12




SUMMARY OF SUBSTITUTES INFORMATION FOR ASBESTOS-CGMTAINING PRODUCTS
Product Category/
Substitute Name
1.
2.
3.

4,


5.

6.

7,
8.

Commercial Paper
Rollboard
Millboard
Standard Board
Premium Board
Pipeline Wrap
Mineral Felt
Safelt(R)
Duraglass(R)
Beater Add Gaske t s
Cellulose
Aramid
Fibrous Glass
PTFE
Graphite
Ceramic
Electrical Paper
Aramid Paper
Ceramic Paper
Asbestos Felt
Fiberglass Felt
Modified Bitumen
Single -Ply Membrane
Acetylene Cylinders
Glass Fiber Filler
Price
N/A
N/A

$2,560/ton
$6 , 800/ton

$5 , 80/square
$6.20/square
$5. 80/square

$1, 800/ton
$3,38Q/ton
$3,000/ton
$5,240/ton
$3,000/ton
$4,500/ton

$10.48/lb.
$7.04/lb.
$3,85/square
'$7.48/square
$29.26/square

$93.00/ton
Useful Life
N/A
N/A

25 years
25 years

25 years
25 years
25 years

5 years
5 years
5 years
5 years
5 years
5 years

3 years
3 years
18 years
18 years
18 years

1 per cylinder
Market Share
N/A
f
N/A

80%
20%

48%
32%
20%

25%
30%
20%
10%
10%
5%

80%
20%
40%
50%
10%

100%
                            111-24




          * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
                                 TABLE III-12

      SUMMARY OF SUBSTITUTES IIFORMATION FOR ASBESTOS-CONTAINING PRODUCTS
                                  (continued)
Product Category/
Substitute Name
 Price
Useful Life     Market Share
9-  Flooring Felt

    N/A

10,  Corrugated Paper

    N/A

11.  Specialty Papers

    Diatomaceous Earth and    $4,000/ton
      Cellulose Filter Paper
    Loose Cellulose Fiber     $2,000/ton
      Filter Paper

12.  Mnyl-4sbestos_ Floor Tile

    N/A

13.  Asbestos.,_Di_aphragnis

    Mercury and Membrane Cells  N/A

14,  A/C Pipeand Fittings
    PVC Pipe
    Ductile Iron Pipe

15. A/C Flat Sheet
$11.08
$15.87
                 1 use

                 1 use
                 N/A
 50 years
 50 years
                     50%

                     50%
                     N/A
92.63%
 7,37%
Calcium Silicate
Construction/Utility
Flat Sheet
Non-Calcium Silicate
Construction/Utility
Flat Sheet
Substitute Laboratory
Work Sheet
$182.00
$417.00
$217.00
25 years
25 years
25 years
76%
4%
20%
                                  111-25

                * * *  DRAFT --  DO NOT QUOTE OR CITE  * * *

-------
                                 TABLE III-12

      SUMMARY OF SUBSTITUTES INFORMATION FOR ASBESTOS - CONTAINING PRODUCTS
                                  (continued)
Product Category/
Substitute Name                Price          Useful Life     Market Share
16. Corrugated 4/C
FRP
Aluminum
Steel
PVC
17. A/C Shingles
Wood Siding and
Vinyl Siding
Asphalt Roofing
Aluminum Siding
Tile Roofing
Sheet
$246
$188
$157
$301

Roofing $162/square
$106/square
Shingles $ 49/square
$128/square
$173/square

20 years
20 years
15 years
20 years

30 years
50 years
20 years
50 years
50 years

48%
32%
11%
9%

32%
27%
20%
19%
2%
18. Drum Brake Linings (OEM)
NAG
Semi-Metallic
19. Disc Brake Pads
Semi -Metallic
20. Disc Brake Pads
Semi -Metallic
21. Brake Blocks
NAO
Full-Metallic
$0.79/piece
$l.G9/pieee
, LMV (OEM)
$0.67/piece
(Heavy Vehicles)
$12.50/piece

$8.04/piece
$6.89/piece
5 years
4 years
7.4 years
0 . 75 years

0.65 years
0 . 5 years
99%
1%
100%
100%

99.5%
0.5%
                                  111-26

                * * *  DRAFT --  DO NOT QUOTE OR CITE  * * *

-------
                                  TABLE 111-12

      SUMMARY OF SUBSTITUTES  INFORMATION FOR ASBESTOS-CONTAINING  PRODUCTS
                                   (continued)
Product Category/
Substitute Name
 Price
Useful Life
23. Automatic TransmissionComponents
    Cellulose

24. Friction..Jlaterials

    Fiberglass and
     Kevlar(R)

25. Pr.o.S.e_cJ:jjye__C.l.othjLng

    N/A

26. Asbestos Textiles
$2.00/piece
$34.65/piece
  4-7 years
  0.5 years
Market Share
22. Clutch Facings
Woven fiberglass
(European product)
Woven fiberglass
(U.S. Product)
Molded aramid fiber,
fiberglass, cellulose
and ceramic fiber
( Nuturn ' s pro due t )
Molded fiberglass

$2.92/piece

$2.92/piece

$2.55/plece



$2.55/pieee

7.5 years

7 . 5 years

6 . 25 years



6.25 years

50%

30%

10%



10%
    100%
    100%
Glass Fiber Mixtures
Ceramic Fiber Mixtures
Aramid Fiber Mixtures
Carbon Fiber Mixtures
FBI Fiber Mixtures
$ 3,460
$ 7,920
$19,800
$52,800
$79,200
1 year
1 year
1 year
1 year
1 year
50%
15%
15%
10%
10%
                                  111-27

               * * *   DRAFT --  DO NOT QUOTE OR CITE   *  *  *

-------
                                  TABLE III-12

      SUMMARY OF SUBSTITUTES INFORMATION FOR ASBESTOS-CONTAINING PRODUCTS
                                  (continued.)
Product Category/
Substitute Name
Price
Useful Life
Market Share
27.






28.





29.



30,


31.






Sheet Gaskets
Aramid
Fibrous Glass
Graphite
Cellulose
PTFE
Ceramic
Asbestos Packings
Aramid
Fibrous Glass
PTFE
Graphite
FBI
Roof Coatings
Cellulose Mixture
Polyethylene Mixture
Other Mixtures
Non-Roof Coatings
Fiber Mixture
Non- Fiber Mixture
Plastics
Glass -Reinforced Plastic
Teflon-Reinforced Plastic
Product X
Porcelain
Silica-Reinforced Plastic
Carbon-Reinforced Plastic

$9.72
$11.38
$11.38
$ 6.83
$19.91
$11.38

$135,900
$120,800
$211,400
$120,800
$181,200

$2.95/gal
$3.36/gal
$3.03/gal

$15.10/gal
$14,42/gal

$ 1.40/lb.
$ 2.25/lb.
$11.22/lb.
$ 4.08/lb.
$ 3.00/lb.
$47,25/lb.

5 years
5 years
5 years
5 years
5 years
5 years

1 year
1 year
1 year
1 year
1 year

10 years
10 years
10 years

10 yrs
10 yrs

1 year
1 year
1 year
1 year
1 year
1 year

30%
25%
15%
15%
10%
5%

30%
30%
15%
10%
15%

87.42%
7.62%
4.95%

70%
30%

47.9%
42.5%
7.4%
1.4%
0.5%
0.3%
                                     III-28

                  * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
                                 TABLE  III-12

      SUMMARY OF SUBSTITUTES INFORMATION FOR ASBESTOS-CONTAINING PRODUCTS
                                  (continued)
Product Category/
Substitute Name
 Price
Useful Life
Market Share
32. Missile Liner

    Kevlar(R) Liner

    Ceramic Fiber Liner

33. Sealant	Tape

    Cellulose Tape

    Structural Urethane
    Carbon-Based Tape
    Non-Curing Tape
$ 29,000/ton

$14Q,000/ton
$0.05/ft.

$0.07/ft.
$0.32/ft.
$0.10/ft.
34. Batte.ry	Sjapajrators

    N/A

35. ArcChutes

    N/A

36, Drum Brake Linings (Aftermarket)
37. Disc Brake Pads... LMV (Aftermarket)
    Semi-Metallic
$0.67/piece
  1 use
  1 use
  15 years
  20 years
  20 years
    N/A
NAO
Sen! -Metallic
$0.79/piece
$1.09/piece
- 5 years
4 years
  7.4 years
      80%
      20%
    56.4%
    36.8%
     6.6%
     0.2%
                                                                    99%
                                                                      1%
    100%
                                 111-29

              * * *  DRAFT -- DO NOT QUOTE OR  CITE  * * *

-------
     The weighted average asbestos fiber price of $323.80 is based on 1985

Bureau of Mines data.*  The same source reports the proportion of fiber

imported from foreign nations as 91,6 percent.  The derivation of the

elasticity of supply for fiber is reported in Appendix A.2.   Based on that

analysis, the elasticity of fiber supply is assumed to be 1.46.
     * U.  S. Department of the Interior,  "1986 Bureau of Mines Minerals
Yearbook."  Bureau of Mines, USBQI, Washington, B.C.
                                     Ill-30

                   * * *  DRAFT  -- DO NOT QUOTE OR CITE  * * *

-------
IV.  COST/BENEFITRESULTS




     This section reports the estimated costs and benefits of the seven




regulatory alternatives examined in this analysis.  As is true with any




modeling of complex economic behavior and highly technical exposure and dose-




response relationships, the qualitative results can be sensitive to the input




assumptions.  Thus, a number of different "runs" of the cost and benefit models




were performed using alternative input data to test and document the




sensitivity of the results to different input assumptions.  Most of these are




reported in detail In Appendix G.  The results presented here are considered to




be the "central" results of the analysis, based on mostly likely values of the




important input parameters and the relevant policy variables, and thus most




relevant for options selection.  In addition to these base case cost/benefit




results, however, this chapter also reports the results of a set of sensitivity




analyses conducted using just one of the regulatory options.  These sensitivity




analyses concern the impacts on the costs and benefits of possible declines in




the future prices'-of asbestos product substitutes and of additional information




about the levels of occupational and nonoccupational exposures for products and




exposure settings In which data were not available for the RIA.




     The regulatory alternatives examined in this RIA represent a range of




possible options for controlling asbestos exposures.  No single alternative,




however, is Identified as the preferred regulatory alternative.  Instead, these




alternatives were selected to assist in the Agency's regulatory options




selection process.  Using the results for these policy options, the costs and




benefits of alternative combinations and timing of options can be assessed




quantitatively and qualitatively.




     Finally, the quantitative estimates of the costs and benefits of the




regulatory alternatives should be Interpreted with care.  As Chapter II of this






                                      IV-1




                  * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
volume of the RIA emphasizes, the benefits estimated quantitatively in this RIA




are a. subset of all of the benefits attributable to the regulatory




alternatives.  For example, only cancer cases are considered in the analysis,




so that asbestosis and other asbestos-related diseases are not explicitly




included in the benefit estimates presented below.  In addition, exposure




information was not available for many of the product/exposure settings,




although such exposures may well occur.  Hence, additional benefits beyond




those quantitatively estimated in the base case presented in this RIA may




exist.




     Similarly, the costs estimated in this RIA are likely to be overestimates




for several reasons.  First, the central case cost estimates developed in this




analysis assume no decline in the prices of asbestos substitutes as time passes




and as additional experience using these substitutes is gained.  Second, the




model for calculating the costs of the regulatory alternatives does not include




cost-reduction benefits of using lower-cost substitutes for asbestos-containing




products, i.e., asbestos-containing product substitute prices are always




assumed to be greater than or equal to the price of the asbestos-containing




product (on an equal service life basis).  Finally, the cost estimation nodel




assumes that in the absence  of asbestos-containing products, users will switch




to non-asbestos products in  proportion to the existing market shares of these




substitutes, and not proportionately more toward the lower cost substitutes.




     A.  Costs and Benefits.. p£_ Regulatory	Alternatives.




          1.  SpecificationofRegulatoryAlternatives




          Fourteen regulatory alternatives involving product bans, fiber phase-




downs, and combinations of the two policies  (as well as exemptions of certain




product categories) were considered  in detail  for this RIA.  Product bans  in




each  of these alternatives prohibit  the  manufacture, importation, or sale  of






                                      IV-2




                  * * *  DRAFT  -- DO NOT QUOTE OR CITE  * * *

-------
the specific products banned.  Since the timing and scope of the bans in the

•various alternatives are different, the bans are referred to as "staged" bans.

Phase-downs of fiber use, on the other hand, operate as quotas, so that

gradually decreasing amount of fiber can be mined or imported  (in products or

as fiber) over time.  As the phase-down occurs, asbestos fiber is allocated to

the uses that face the highest costs of foregoing use of the fiber until the

phase-down is completed.  Thus, once the phase-down is completed, the result is

the satae as a complete ban on all asbestos products.

     The fourteen specific regulatory alternatives examined in this RIA are:

     Alternativeg;

          •    Fiber Phase-Down from 1987 to 1997

          •    Bans on Products 7, 9, 12, 14,  25  (protective clothing
               and construction products, except  for A/C sheet and.
               shingle)  in 1987

     4lternatiyeTi.iBX:

          •    Fiber Phase-Down from 1987 to 1997

          •    Bans on Products 7, 9, 12, 14,  25  (protective clothing
               and construction products, except  for A/C sheet and
               shingle)  in 1987

          •    Products  13 and 32  (diaphragms  and missile liner)
               exempt from regulation

     AlternativeD:

          «    Fiber Phase-Down from 1987 to 1997

          •    Bans on Products 7, 9, 12, 14,  15, 16, 17, 25
               (protective clothing, construction products) in 1987

     Alternative....^:

          •    Fiber Phase-Down from 1987 to 1997

          •    Bans on Products 7, 9, 12, 14,  15, 16, 17, 25
               (protective clothing and construction products)
               in  1987

          •    Products  13 and 32  (diaphragms  and missile liner)
               exempt from regulation

                                      IV-3

                   * * *  DRAFT --DO NOT QUOTE OR CITE  * * *

-------
Alternative E:
     *    Bans of Products 7, 9, 12, 14, 15, 16, 17, 25
          (protective clothing and construction products) in
          1987

     •    Bans of Products 18, 19, 20, 21, 22, 23, 24, 36, 37
          (friction products) in 1992

Alternative _F:

     *    Bans of Products 7, 9, 12, 14, 15, 16, 17, 25
          (protective clothing and construction products) in
          1987

     .    Bans of Products 18, 19, 20, 21, 22, 23, 24, 36, 37
          (friction products) in 1992

     •    Bans of all Remaining Products in 1997.

AlternativeFX:

     •    Bans of Products 7, 9, 12, 14, 15, 16, 17, 25
          (protective clothing and construction products) in
          1987

     •    Bans of Products 18, 19, 20, 21, 22, 23, 24, 36, 37
          (friction products) in 1992

     «    Bans of all Remaining Products in 1997 except
          Products 13 and 32  (diaphragms and missile
          liner).

Alternat iye ...G:

     •    Bans'of all Products  in 1987

Alternative,GX:

     •    Bans of all Products  except Products  13  and  32
          (diaphragms and missile liner)  in 1987

AlternativeH:

     *    Bans of all Products  in 1992

AlternativeHX:

     •    Bans of all Products  except Products  13  and  32
          (diaphragms and missile liner)  in 1992
                                 IV-4

              * * *  DRAFT --  DO NOT QUOTE OR CITE  * * *

-------
     AlternativeI:

          *     Bans  of all Products in 1997

     Alternative IX:

          •     Bans  of all Products except Products 13 and 32
               (diaphragms and missile liner)  in 1997

     Alternative J:

          •     Bans  of Products 1,  2,  4,  7, 9,  10,  12, 15, 16,
               17,  and 25 in 1987

          •     Bans  of Products 5,  18, 19, 20,  21,  22, 23, 24,
               and 27 in 1991

          •     Bans  of Products 14, 36,  and 37  in 1994.


     For each of these regulatory alternatives, three different baselines of

asbestos product market growth over time were modeled;  High, Moderate,  and Low

Declines, as outlined in Chapter III of this RIA.  The results presented in

this chapter reflect the "Low Decline" baseline growth rate assumptions

outlined in the previous chapter.  As Chapter III pointed out,  the "Low

Decline" baseline assumes the highest levels of future asbestos use and, as

such, probably overstates both the level of future production of asbestos

products and therefore, the costs of the regulatory alternatives.  Results

using the other two baseline growth rate assumptions are reported in Appendix G

- Sensitivity Analyses.  Two different discounting scenarios for calculating

the present value of the costs and benefits of the regulatory alternatives were

used; 3 percent for both costs and benefits, and 3 percent for costs and 0

percent for benefits.  In addition, when benefits are discounted, they are

discounted from the time of exposure  (e.g., the time of manufacture for

manufacturing-related exposures, the  time of future repair and disposal for

those types of exposures).
                                      17-5

                  * * *  DRAFT  -- DO NOT QUOTE OR CITE  * * *

-------
     In addition to the input data presented in Chapter III, two other pieces




of information are necessary to complete the model specifications for the




regulatory alternatives.   These are the fiber phase-down schedule for each case




in which it is relevant and the exact mechanism for allocating the valuable




rights to mine,  use, or purchase asbestos fiber to economic entities.




     The fiber-phase-down schedule in each relevant case is designed to reduce




fiber consumption across the time horizon of the phase-down in equal




increments, starting at the level of fiber usage in the beginning of the




scenario (1986 in these cases) ad jus ted	f or __ any p r o due t bans..  That is, the




fiber cap schedule in designed to reduce fiber consumption by non-banned




product markets in equal increments over time, so in cases in which products




are banned, the fiber usage associated with these products is first subtracted




from the total before determining the fiber phase-down schedule.  Table IV-1




shows the fiber cap schedule for Alternatives B and D, the two alternatives in




which a phase-down is used.  Finally, the value of the rights to use, purchase,




or mine asbestos fiber are assumed to accrue to the government.  Should these




instead be allocated to various of the parties associated with these asbestos




markets, their losses would be reduced by the value of these rights.




          2.  Results




          The aggregated costs and benefits of Regulatory Alternatives B, BX,




D, DX, E, F, EX, G, GX, H, HX, I, IX, and J are presented in Table IV-2.  The




table lists for each alternative  (1) the total domestic welfare cost imposed,




(2) the total number of cancer cases avoided, and (3) the cost per cancer case




avoided.  There are two sets of these results in the table corresponding to the




two different discounting assumption - - 3 percent for both costs and benefits




and 3 percent for costs and 0 percent for benefits.











                                      IV-6




                  * * *  DRAFT  -- DO NOT QUOTE OR CITE  * * *

-------
Table IV-1.   Fiber Cap Schedules for Phase-Down Scenarios
                  Low Decline  Baseline
                          (tons)
      Year      Alternative B  Alternative D
      1987        88,902.58        83,138.57
      1988        80,012,32        74,824.72
      1989        71,122.07        66,510.86
      1990        62,231.81        58,197.00
      1991        53,341.55        49,883.14
      1992        44,451.29        41,569.29
      1993        35,561.03        33,255.43
      1994        26,670.77        24,941.57
      1995        17,780.52        16,627.71
      1996         8,890.26         8,313.86
      1997             0.00             0.00
                           IV-7

        * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
                                  TABLE IV-2, SUMMARY OF COSTS AMD BEHEFItS OF ALTERNATIVES
                                                    (Low Decline Baseline)

*
*
o
l>
H
,
i
o'
o
K ._, '
O S
H f
•s °°
a
o
H
W
O
JO
o
M
M
*
Discounting Scenario Alternative
and
Costs* and Benefits B BX D DX
3-Costs/3-Benefits
DiscpuBtiGB
Total Cost
($l,000,000's): $ 3,560 1,079 3,607 1,126
Total Cancers
Avoided: • 208 208 210 210

Cost Per Case
($l,OOQ,000«s): . 17.1 5.2 17,2 5,4


3-Costs/O-Benefits
Discounting


Total Cost
($l,OOOrOOO's): $ 3,560 1,079 3,607 1,126

Total Cancers
Avoided: 266 266 268 268

Cost Per Case
($l,000,000's): 13.4 4.1 13,5 4,2
E F FX



603 3,486 1,008

145 150 150


4,2 23.2 6.7







603 3,486 1,008


193 200 200


3.1 17.4 5.0
* Total doitiestic cost

Note;  Table contains rounded entries.

-------
                             TABLE IV-2.  SUM«SY OF COSTS AMD BENEFITS  OF EXEMCTIQB ALTERNATIVES
                                                    (Low Decline Baseline)
                                                         (continued)

*

o

§
H

1
o
o
3 M
S f
•2 *
g
H
W
O •
0
H
PI

*
*
sfr
Discounting Scenario Alternative
and
Costs* and Benefits 6 GX H . HX I
3-Costs/3-Benefits
PiscguntinB

Total Cost
($l,000,000's>: $ 6,934 2,286 4,868 1,385 3,085

Total Caaeers
Avoided: 266 266 154 . • 153 63

Cost Per Case
($1,000, OOO'a): 26.0 fl.6 31.7 9.1 49.3

3-Costs/O-Benefits
piscounting

Total Cost
($1,000, OOO's): $ 6,934 2,286 4,868 1,385 3,085
Total Cancers
Avoided; 329 328 206 205 91

Cost Per Case
($1,000, OOO's): 21.1 7.0 23.7 6.8 34.1


IX J




607 748


62 122


9.7 6.1





607 748

90 167


6.7 4.5


*  Total domestic cost

Hote: Table contains rounded entries.

-------
     Table IV-2 indicates that the aggregate U.S. welfare losses attributable




to the fourteen regulatory alternatives range from a low of about $603 million




(Alternative E) to just under $7 billion (Alternative G),  depending on the




regulatory alternative considered.  The lowest welfare costs for the U.S. are,




of course, the regulatory alternatives that ban the fewest products




(Alternatives E and J) and the highest are those that ban more products (or




phase down all fiber usage) and ban them earlier -- Alternatives B, G, and H.




Clearly, the costs of each regulatory alternative are reduced significantly by




excluding certain products, such as asbestos diaphragms and missile liner, from




both the asbestos fiber phase down and product bans, as both the "X"




alternatives and Alternatives E and J indicate.




     The figures in the table reporting the quantitatively estimated benefits




also indicate that the number of cancer cases avoided changes dramatically




across the alternatives (using the undiscounted cancer cases avoided figures),




from a low of 90 cases avoided (for Regulatory Alternative IX) to a high of 329




cases avoided  (Regulatory Alternative G).  To some extent, however, the costs




imposed by the regulatory alternatives rise and fall as the numbers of cancer




cases avoided rise and fall.  This produces a cost-per-cancer-case-avoided




(using the 3 percent discount rate for both costs and benefits) that ranges




from a low of about $4.2 million per case avoided (Alternative E) to a high of




about $49 million per case avoided (Alternative I).  Most of the overall cost-




per-cancer-case-avoided figures, however, are in the $5 million to $30 million




range.  Alternatives that exempt diaphragms and missile liner from the phase




down and product bans, of course, are those with costs per case avoided at the




lower end of the range, and those that do not typically are in the higher end




of the range.











                                     IV-10




                  * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
     While the aggregated costs and "benefits of the fourteen regulatory

alternatives presented in Table IV-2 are Informative, product-by-product

comparisons are also useful.  Appendix G for this RIA contains detailed tables

for each of the fourteen regulatory alternative under each baseline (Low,

Moderate, and High Declines).  Clearly, these are too numerous to place in the

body of this chapter.  Instead, detailed cost and benefit results are presented

here only for Alternative J.  Appendix G contains Identical detailed

information for each of the other combinations of regulatory alternatives and

baselines,

     Tables IV-3 through IV-5 present detailed cost and benefit information for

Regulatory Alternative J.  The first table reports the welfare losses and gains

of each distinct set of parties affected by Regulatory Alternative J, e.g.,

domestic miners and millers, domestic primary processors, foreign product

purchasers, etc., using the 3 percent discount rate for costs.  These are the

gains and losses of each set of parties in their capacities as, for example,

                   *&
primary processors.

     Table IV-3 also reports the aggregate world welfare loss and the aggregate

welfare change for the U.S. taken as a whole due to Regulatory Alternative J.

Tables IV-4 and IV-5 report detailed product-by-product cost and benefits

results for Regulatory Alternative J using the 3 percent discount rate for

costs and benefits for Table IV-4 and 3 percent for costs and 0 percent for

benefits in Table IV-5.  These tables present the welfare cost imposed by the

regulatory alternative on II.S. entities for each separate product In column
       Under phase downs of asbestos  fiber which occur  in  alternatives B, BX,
D, and DX, however, valuable rights to use and purchase asbestos  fiber during a
phase down might be allocated to some of these parties,  so that their net gains
or losses might be affected by ownership of  these rights.   Hence,  detailed
results  tables in Appendix G for these phase down scenarios reflect  these
valuable rights during the phase down, but these are  allocated to the
government alone rather than any individual  parties.

                                      IV-11

                  * * *  DRAFT --DO  NOT QUOTE OR CITE   *  * *

-------
          TABLE 17-3. WELFARE EFFECTS Bt PARTY FOR ALIEHHAIIVE  J - LOW DECLINE BASELIHE




                      (Present values, in million dollars, discounted at 3%)
Party
Domestic Miners & Millers
Foreign Miners & Millers
Importers of Bulk Fiber,
Mixtures, and Products
Domestic Primary Processors
Foreign Primary Processors
Domestic Product Purchasers
Foreign Product Purchasers
Government
Fiber Value
CS Loss PS Loss Allocation
7.31
79,76
,00

77.58
8.64
663,34 .00
.00 .00

.00
.00
.00

.00
.00
.00
,00
.00
Het Loss
7.31
79.76
.00

77.58
8.64
663.54
.00
.00
                                   SET WELFARE LOSSES
                              0.  S. Welfare:




                              World Welfare:
748.43




836.84
Note:  Kegafcive entrias  ajrs welfare gains.
                                      IV-12




            *  *  *   DRAFT  --  DO  NOT QUOTE OR CITE  *  *  *

-------
           TABLE IV-4. COSTS AM) BENEFITS BY PRODUCT CATEGORY FOR ALTERNATIVE J - LOW DECLINE EASELIHE

                              (Costs discounted at 3S; Benefits discounted at 0%)
Product
TSCA #
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38

Product
Description
Commercial Paper
Sollboard
Millboard
Pipeline Wrap
Beater-Add Saskets
High Grade Electrical Paper
Hoofing Felt
Acetylene Cylinders
Flooring Felt
Corrugated Paper
Specialty Paper
V/A Floor Tile
Asbestos Diaphragms
A/C Pipe
A/C Sheet, Flat
A/C Sheet, Corrugated
A/C Shingles
Drum Brake Linings (OEM)
Disc Brake Pads LKV (OEM)
Disc Brake Pads HV
Brake Blocks
Clutch Facings
Aatonatic trans. Components
Friction Materials
Asbestos Protective Clothing
Asbestos Thread, etc.
Sheet Gaskets
Asbestos Packing
Soof Coatings
Hon-Soofing Coatings
Asbestos-leinforced Plastics
Missile Liner
Sealant Tape
Battery Separators
Arc Chutes
Drum Brake Linings (Aftensarket)
Disc Brake Pads LMV (Aftermarket)
Mining and Milling
fotal
Domestic
Consumer
Surplus
Loss
(10*6 $)
.00
.00
-.43
1.96
207.38
-.73
8.90
-.45
.00
.00
-.09
.00
-.97
189.34
1.35
.62
63.31
. 9.69
.08
.01
17.10
24.66
.17
.20
.00
-.83
157.60
.00
-21.50
-2.35
-.73
-.69
-1.63
.00
,00
12.31
-.74
.00

Domestic
Producer
Swrplus
Loss
{KT6 $)
.00
.00
.00
.01
,04
.00
.00
,00
.00
.00
.00
.00
.00
35.67
1.38
.00
8.10
4.74
3.46
.31
2,17
.81
.13
1.86
.00
.00
7.00
,00
.00
.00
.00
.00
.00
.00
,00
7,55
4.33
7.31

Gross
Domestic
Total
Loss
(10*6 S)
,00
.00
-.43
1.97
207.42
-.73
8.90
-.45
.00
.00
-.09
.00
-.97
225.01
2,73
.62
71.42
14.43
3.54
.33
19.27
25.48
.30
2.06
.00
-.83
164.60
.00
-21.50
-2.35
-.73
-.69
-1.63
.00
.00
19.87
3,59
7.31
748.43 *
Total
Cancer
Cases
Avoided
.0000
.0000
.0000
1.741$
7.7573
.0000
1.5116
.0000
.0000
.0000
.0000
.0000
.0000
3.1110
1.0504
.1435
.6395
8.3800
.9927
.2165
14,4204
.6049
,0005
.5244
.0000
.0000
2.4658
.0000
.0000
.0000
.0000
.0000
.0000
.0000
.0000
106.2551
15.8541
1 , 1258
166.7950
Cost per
. Cancer Case
Avoided
n/a
n/a
n/a
1.13
26.74
n/«
5.89
n/a
n/a
n/a
a/a
n/a
n/a
72.33
• 2.60
4.30
111,68
1.72
3.57
1.51
1.34
42.12
637.88
3.92
n/a
n/a
66.75
n/a
n/a
n/a
n/a
a/a
n/a
n/a
n/a
.19
.23
6.50
4.49
n/a;  Hot applicable
***  Market is not banned, exempted, or exposure data is not available.
  *  U.S. net welfare cost
                                              IV-13

                     *  * *  DRAFT  -- DO NOT  QUOTE  OR CITE   *  * *

-------
            TABLE IV-5. COSTS AHB BENEFITS BY PRODUCT CATEGORY FOR ALTERNATIVE J - LOW DECLINE BASELINE

                               (Costs discounted at  3%; Benefits discounted at 3%)
Product
f SCA f
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38

Product
Description
Commercial Paper
Rail-board
Millboard
Pipeline Wrap
Beater-Add Gaskets
High Grade Electrical Paper
Hoofing Felt
Acetylene Cylinders
Flooring Felt
Corrugated Paper
Specialty Paper
V/A Floor Tile
Asbestos Diaphragms
A/C Pipe
A/C Sheet, Flat
A/C Sheet, Corrugated
A/C Shingles
Dron Brake Linings (OEM)
Disc Brake Pads LMV (OEM)
Disc Brake Pads HV
Brake Blocks
Clutch Facings
Automatic Trans. Cosiponents
Friction Materials
Asbestos Protective Clothing
Asbestos Thread, etc.
Sheet Saskets
Asbestos Packing
Roof Coatings
Hon-Roofing Coatings
Asbestos-Reinforced Plastics
Missile Liner
Sealant Tape
Battery Separators
Arc Chutes
Drum Brake Linings (Aftermarket)
Disc Brake Pads IMV ( Af termarket )
Mining and Milling
Total
Domestic
Consuner
Surplus
Loss
(10-6 S)
,00
,00
-,43
1.96
207,38
-.73
8.90
-.45
,00
,00
-.09
.00
-.97
139.34
1.35
.62
63.31
9.69
.08
.01
17.10
24,66
.17
.20
.00
-.83
157.60
.00
-21,50
-2,35
-.73
-.69
-1.63
.00
.00
12.31
-.74
,00

Domestic
Pr oduc er
Surplus
Loss
(10" 6 $)
,00
.00
.00
.01
.04
.00
.00
.00
.00
.00
,00
.00
.00
33.67
1.38
.00
8,10
4.74
3.46
.31
2.17
.81
.13
1.S6
.00
.00
7.00
,00
.00
.00
.00
.00
.00
.00
.00
7.35
4.33
7.31

Gross
Domestic
Total
Loss
C10"6 $}
.00
.00
-.43
1.97
207.42
-.73
8.90
-.45
.00
.00
-.09
,00
-.97
225.01
2.73
.62
71.42
14.43
3.54
,33
19.27
25.48
.30
2.06
.00
-.83
164.60
.00
-21.50
-2.35
-.73
-.69
-1.63
.00
.00
19.67
3.59
7.31
748.43 *
Total
Cancer
Cases
Avoided
.0000
.0000
.0000
1.4052
5.8793
.0000
1.2196
,0000
.0000
.0000
.0000
.0000
,0000
2.2514
.8475
.1158
.5160
6,3280
.7495
.1641
10.9292
.4585
.0004
.3974
.0000
,0000
1,8688
.0000
,0000
.0000
,0000
.0000
.0000
,0000
,0000
76.7895
11.5777
.8457
122.3435
Cost par
Cancer Case
Avoided
(10*6 $/case)
n/a
n/a
n/a
1.40
35.28
n/a
7,30
n/a
n/a
n/a
n/a
n/a
n/a
99,94
3,22
5.33
138. 42
2.28
4,72
1.99
1.76
55.57
841.65
5.18
n/a
n/a
88.08
a/a
ii/a
n/a
n/«
n/a
n/a
n/a
n/a
.26
.31
8.65
6,12
ji/a:  Hot applicable
***  Market is not banned,  e«»pted, at exposure data is not available.
  *  U.S. net welfare cost
                                                  IV-14

                        * * *   DRAFT  -- DO  NOT  QUOTE  OR CITE   *  *  *

-------
three,  which Is also divided into consumer and producer welfare losses in




columns one and two.  The fourth column of these two tables reports the number




of cancer cases avoided on a product-by-product basis.  The fifth column of




these tables reports the cost-per-eancer-case-avoided for the regulatory




alternative, which is simply the number of cancer cases avoided divided by the




cost of the regulatory alternative In each market.




     Finally, listed at the bottom of these tables are (1) the cost of the




regulation to U.S. entities taken as a whole, (2) the total number of cancer




cases avoided across all products, and (3) the implied cost-per-cancer-case-




avoided for all products taken together.




     These detailed tables provide a significant amount of information




concerning the costs and benefits of Regulatory Alternative J.  First, several




of the product markets (e.g., Commercial Paper, Rollboard), as the tables




Indicate, contribute neither costs nor benefits, since these products are no




longer produced or consumed in the U.S.  Second, a number of products that are




still either produced or Imported to the U.S. are not banned in this scenario.




These products (e.g., diaphragms, thread, acetylene cylinders) actually gain




from the regulation because the product bans cause the price of asbestos fiber




to fall (the consumer surplus loss and total loss entries are negative




indicating welfare gains).  This yields increased consumer surplus to consumers




of these products.  Third, the bulk of the costs of the regulatory alternative




is borne by consumers through higher costs for asbestos products and




substitutes for these products.  That is, the producer surplus losses amount to




only about 10 percent of the total domestic cost of the regulation.  Fourth,




the product-by-product details indicate that although there is a wide range for




the product-specific cost-per-cancer-case-avoided figures, the cost per case




tends to be•lower for products that contribute the largest number of cancer






                                     IV-15




                  * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
cases (e.g., the friction product categories).  Thus, the cost-per-case-avoided




for this set of products are among the lowest, for example, $260,000 per case




for drum brake linings in the aftermarket using the 3 percent discounting for




both costs and benefits.  Overall, the cost-per-case-avoided ranges from the




$230,000 per case for aftermarket drum brakes to a high of over $800 million




per case for automatic transmission components (although this latter figure is




produced by the extremely small estimated cases avoided for this product).




     These product-by-product costs and benefits are quite useful in




understanding which markets yield high benefits and which impose relatively




higher costs.  This information, contained in its entirety in Appendix G of




this RIA, can be used to "fine tune" the regulatory alternatives and to explore




other combinations of policies.




     B,  Sensitivity Analyses




     Appendix G presents more detailed output from these model runs.  The




tables presented in Appendix G provide tabulations of welfare effects, by party




affected and by market under the two different discounting scenarios, under the




three possible baseline growth rate assumptions, and for each of the fourteen




regulatory  alternatives.  The results for these numerous distinct cases are




consistent with expectations.  For example, using the High and Moderate Decline




baselines (in which the decline of asbestos products over  time is more rapid




than in  the Low Decline baseline) reduces the costs  of the regulatory




alternatives and their benefits.  Similarly, using high discount rates reduces




the benefits and the costs.  The total costs for these alternatives  discounted




at 3 percent ranges from a  low of about  $243 million (J -  High Decline) to over




$6 billion  (G  - Low Decline).




     Appendix G also reports some illustrative results for some regulatory




options  and baseline conditions not considered in  the  fourteen alternatives






                                      IV-16




                  * * *  DRAFT  -- DO  NOT QUOTE OR"CITE  *  *  *

-------
discussed In detail in this Regulatory Impact Analysis.  One regulatory option




is to require engineering controls for some of the asbestos products to reduce




asbestos exposures.  To Illustrate this possibility, model runs using




engineering controls on replacement brake markets (for drum brakes and 1MV disc




brakes), rather than bans on these asbestos brakes, are presented in




Appendix G.




     Finally, two potentially important factors not included in the "central




case" analysis of this RIA could have a significant impact on both the costs




and the benefits of the regulatory alternatives.  First, there is the distinct




possibility that substitutes for asbestos products might become cheaper over




time as both experience with their use and the cumulative volume of their




production increase.  Substantial empirical evidence for downward trends in




prices due to "experience" exists.  This suggests that the costs estimated in




this RIA may be higher than they ultimately will turn out to be as asbestos




product substitute costs decline over time.  Second, in many cases data on




releases of and exposures to asbestos were not available.  The "base case"




analysis in this RIA assumes that in these cases these releases and exposures




are zero, which is not likely to be true.  This assumption could impart a




substantial downward bias to the quantitative benefits estimates for the




regulatory alternatives.




     To illustrate the potential impact on the costs and benefits of 1)




allowing for declining prices of asbestos product substitute prices over tine,




and 2) Introducing release and exposure information where such Information is




available, a number of sensitivity scenarios were estimated using Regulatory




Alternative J.   For declining substitute prices, an across-the-board decline




of one percent per year is assumed.  The basis for the possible decline in




asbestos substitute prices over time is primarily the empirical observation in






                                     IV-17




                  * * *  DRAFT -- DO"NOT QUOTE OR CITE  * * *

-------
the business and economics literature of both economies of scale and experience

curves (both of which lead to reduced prices for goods over time).    However,

the results presented for this scenario are designed to indicate the

sensitivity of the costs of the regulatory alternatives to changing substitute

prices over time, hence the one percent fall per year in all asbestos

substitute prices is an assumption made for illustrative purposes.   Although

this may overestimate the rate of decline for some products that have been in

existence for some time, it »ay underestimate the rate of decline for other,

newer products or products with new applications.

     For products and exposure settings in which no data were available to

estimate releases and asbestos exposures directly, two different alternative

exposure scenarios were developed, as described in detail in Appendix A-6,

First, where possible, for occupational exposures in manufacturing,

installation, and repair and disposal, exposures in these settings were

estimated based on analogous exposure settings for product for which exposure

information exists.  This was done for one product's manufacturing stage, eight

products' repair and disposal stage, and nine products' installation stage.

The basic rationale for this procedure is that similar activities involving

roughly similar probable exposure paths and concentrations are likely to result

in similar exposures.  Tables IV-6 through IV-8 tabulate'the additional

occupational exposure information developed for this sensitivity analysis for

these three different exposure settings (primary manufacturing,  installation,

and repair and disposal).

     In some non-occupational exposure settings for which data did not exist

but in which exposures are likely, one percent of the asbestos content of the
     * Recent articles concerning pricing, costs,  and the  experience  (or
learning) curve  include Bass  (1980), Lieberman  (1984),  and Oilman (1982).

                                     IV-18

                  *  * *'  DRAFT  -- DO NOT QUOTE  OR  CITE  *  * *

-------
                                              TABLE IV-6, ADBHIOML OCCUPAIIOHAL EXPQSUB! ASSUMPTIONS fQR PRIMARY MANUFACIBRIKG




                                                                             Occupational                            Wonoeeupational

                                                                    Ho. of People     Mil. Fi*./Yr      Ho. of People         Mil. Fib./Yr
~r
                                    1.   Comnercial Paper
*                                   2.   Bollboard
•j.                                   3.   Millboard
                                    4.   Pipeline Wrap
Q                                   5.   Beater-add Gaskets
fg                                   6.   High-grade Elect. Paper
£                                   ?.   goofing Felt
H                                   8.   Acetylene Cylinders                                200
 ,                                   9.   Floorins Felt
 1                                  10.   Corrugated Paper
j-j                                 11.   Specialty Pa|ser
O                   .              12.   V/A Floor Tile
53    t-<                           13.   Diaphragms
O    <3                           14.   A/C Pipe
H    ^j                           15.   A/C Flat Sheet

-------
*
*
O
O


§
O
H
PJ

O
JO

O
t-l
H
w
                                            TABLE IV-7. ABDIIIOHAL QCCOTATIQNAL EXKJSURl ASSUMPTIOBS FOR  IHSIAULATION OF  PRODUCTS







                                                                            Occupational                            Honoccupafcional


                                                                   So. of People     Mil. Fib./Yr      No. of People         Mil. Fib./Yr
1.
2.
3.
4.
5.
6,
7.
8.
9.
10,
11.
12.
13.
14.
15.
16,
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
Commercial Paper
RollBoard
Millboard 20
Pipeline Wrap 2,725
Beater-add Gaskets 53,417
High-grade Elect. Paper 300
Roofing Felt
Acetylene Cylinders
Flooring Felt
Corrugated Paper
Specialty Paper 350
V/A Floor Tile
Diaphragms
A/C Pipe
A/C Flat Sheet
A/C Corrugated Sheet
A/C Shingles
Drum Brake Linings (OEM)
Disc Brake Pads, LOT (OEM)
Disc Brake Pads, HV
Brake Blocks
Clutch Facings
Auto, fransmiss. Comp.
Friction Materials
Protective Clothing
Thread, yarn etc.
Sheet Gaskets 5,741
Asbestos Packings 2
Hoof Coatings
Non-Roofing Coatings 1,780
Asb. Seiuforeed Plastics
Missile iinsrs 260
Sealant laps
Battery Separators
Arc Chutes
Drum Brake Linings (A/SI)
Disc Brake Pads, LM? (A/M)
Mining and Milling


57
52
57
57




57















276
276

364

57







-------
                                          TABLE IV-8. ADDITIONAL OCCUPATIONAL EXPOSURE ASSWTIQRS FOR HEPAIR/DISPOSAL OF PRODUCTS




                                                                            Occupational          -                  Nonoccupational

                                                                   Ho,  of People     Mil.  Fib.Ar      Ho.  of People         Mil.  Fib./Yr
1.
2.
3,
4.
5.
6.
7.
Contn©rcial Pepsi;
RoUboard
Millboard
Pipeline Wrap
Beater-add Gaskets
High-grade Elect, Paper
Roofing Felt


20
2,725
53,417
300



57
18
57
57

 i                                 8.  Acetylene Cylinders
„                                9.  Flooring Felt
O                                10.  Corrugated Paper
„    H                          11.  Specialty Paper                   350                 57
O    <                          12.  V/A Floor Tile
*"3    *                           13.  Diaphragms
XD    M                          1*.  A/C Pipe                        1,458                296
g                                15.  A/C Flat Sheet
rt                                16.  A/C Corrugated Sheet
W                                17.  A/C Shingles
O                                18.  Drum Brake Linings (OEM)
f*5                                19.  Disc Brake Pads, UN  (OEM)
Cj                                20.  Disc Braka Pads, HV
jj                                21.  Brake Blocks
£0                                22..  Clutch Facings
                                  23,  Auto. Transtniss. Comp.
 >{.                                24,  Friction Materials
 y,          •                      25.  Protective Clothing
                                  26.  Thread, yarn etc.
 *                                27.  Sheet Gaskets                   5,741                276
                                  28,  Asbestos Packings                  2                276
                                  29,  Roof Coatings
                                  30,  HoiK~Roofing Coatings
                                  31.  Asb. Reinforced Plastics
                                  32.  Missile Liners
                                  33,  Sealant Tape
                                  34,  Battery Separatees
                                  35.  Arc Chutes
                                  36.  Drum Brake Linings (A/M)
                                  37.  Disc Brake Pads, LMV  
-------
product was assumed to be released per year over the life of the product.




These releases would be caused by normal weathering of products or by various




activities, such as cutting, sawing, and sanding that occur to the products in




the course of .their use.  The assumptions are described in greater detail in




Appendix A-6 of this RIA.  Table IV-9 tabulates these additional




nonoccupational exposure assumptions for exposures in use of asbestos products.




describes the procedures used to develop these additional non-occupational




exp o s ur e data.




     Table IV-10 tabulates the results of these sensitivity analyses using




Regulatory Alternative J (the 3-stage product ban at dates 1987, 1991, and




1994, exempting a number of products such as missile liner and diaphragms,




regulating original equipment and aftermarket drum and disc brakes separately).




The table lists the total costs, total cancer cases avoided, and the implied




cost per cancer case avoided, using (1) both the 3 percent discount rate for




both costs and benefits and the alternative discounting scenario of 0 percent




for benefits  and 3 percent for costs, and (2) the Low Decline baseline.  Five




distinct scenarios are presented; 1) the base case presented above for




Regulatory Alternative J, 2) declining substitute prices alone, 3) additional




occupational  exposure assumptions, 4) additional non-occupational exposure




assumptions,  and 5) declining substitute prices and both sets of additional




exposure assumptions simultaneously.




     As the figures in  the table indicate, allowing for a decline of all




asbestos product substitute prices at a rate of one percent per year reduces




the estimated costs by  almost one-third.  Because it is the difference between




the asbestos  product price and the cost of substitutes that is counted as a




cost in the consumer surplus losses, not  the absolute level of the prices of




substitutes,  even moderate declines over  time of the prices of substitutes can






                                     I?-22




                  * * * DRAFT  -- DO NOT QUOTE OR CITE  * * *

-------
                                               TABLE IV-9. ADDITIOIAL NOHOCCUPATIOHAL EXPOSURE ASSUMPTIONS FOR USE OF PRODUCTS
O
a    M
o    <
s
O
H
H
PJ
                                                                            Occupational


                                                                   Ho. of People     Mil. Fib,/¥r
             Efonoccupatd onal


Ho. of People         Mil, Fib./Yr
1.
2.
3,
4.
5.
fi.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20,
21.
22.
23.
24.
25,
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
Coranercial Paper
Roilioard
Millboard
Pipeline Wrap
Beater-add Gaskets
High-grade Elect. Paper
Roofing Felt
Acetylene Cylinders
Flooring Felt
Corrugated Papes
Specialty Paper
V/A Floor Til*
Diaphragms
A/C Pipe
A/C Flat Sheet
A/C Corrugated Sheet
A/C Shingles
Drum Brake Linings (OEM)
Disc Brake Pads, LMV (OEM)
Disc Brake Pads, B¥
Brake Blocks
Clutch Facings
Auto. Transiaiss. Comp,
Friction Materials
Protective Clothing
Thread, yarn etc.
Sheet Gaskets
Asbestos Packings
Soof Coating*
Non-Roofing Coatings
Asb. Seinforced Plastics
Missile Liners
Sealant f ape
Battery Separators
Arc Chutes
Drum Brake Linings 
-------
                                                 IABLI IV-10.  SENSITIVITY ANALYSIS FOR BECLINIHS SUBSTITUTE PRICES AND ALTERHATIVE
                                                               ASBESTOS EXFOSIKE ASSUMPTIONS OSIKG KEGBLATQSY ALTERKiTIVE Jt
                                                                                   (Low Decline Baseline)
                Discotinting Scenario
                       and
                Costs* and Benefits
                                            Base Case
                                                Declining               Additional                 Additional                   All
                                            Substitute Prices**    Occupational Exposure    Honoeeupatioual Exposure       Sensitivity
*

cs
               3-Costs/3-B
-------
produce fairly large reductions in the costs of banning asbestos products.  The




added occupational exposures, as the table indicates, suggest that an




additional 41 cancer cases (undiscounted) might be avoided by Alternative J if




the additional occupational exposures assumed are accurate,  An even, larger




number of cancer cases, some 73 additional cases, might be avoided by this




alternative if the additional non-occupational exposures developed are




accurate.  Costs and benefits allowing for both declining substitute prices




over time and the two additional sets of exposures are shown in the final




column of the table.  As these figures indicate, the impacts of each of the




three sensitivity assumptions are independent and additive, at least for this




regulatory alternative.  That is, the decline in costs for this combination of




sensitivity assumptions is the same as for the declining substitutes prices




alone scenario, and that the increased benefits for this scenario equal the sum




of the increased benefits for the two benefit-side sensitivity analyses




conducted independently.




     Finally, the cost per cancer case avoided  (using the 3 percent discounting




for both costs and benefits) falls from the base case level of about $6 million




to $2.5 million for all three sensitivity assumptions combined.  Again,




although these are sensitivity analyses, on the exposures side the assumptions




concerning added exposures to asbestos are intended to address lack of data --




exposure settings in which exposures are believed to occur, but for which data




do not exist.  On the costs of substitutes side, the assumption of a 1 percent




decline in all substitute prices is illustrative only.  However, for many




substitute products, over time costs and prices may well decline as accumulated




production and manufacturing experience make these cheaper to produce and to




use in place of asbestos products.











                                     IV-25




                  * * *  DRAFT -- DO NOT QUOTE  OR CITE  * * *

-------
V.  REFERENCES
Advisory Committee on Asbestos.  1979a,  Asbestos volume 1: final report of the
Advisory Committee.  London, UK: British Health and Safety Commission (as
reported in USEPA 1986).

Advisory Committee on Asbestos.  1979b.  Asbestos volume 2: final report of the
Advisory Committee.  London, UK: British Health and Safety Commission (as
reported in USEPA 1986),

Axtell, LM, Asire, AJ, Myers, MH.-  1976.  Cancer Patient Survival.  Report
No, 5.  Washington, B.C.; U.S. Government Printing Office.

Berry, G and Kewhouse, ML.  1983.  Mortality of Workers Manufacturing Friction
Materials Using Asbestos.  Br, J. Ind. Med: 40,  pp. 1-7.

Bertrand, R.,  Pezerat H.   1980.  Fibrous Glass: carcinogen!city and dimensional
characteristics.  In Biological effects of mineral fibers,  IARC 2:901-911.

Chahinian, AP.  1982.  Malignant Mesothelioma.  In: Cancer Medicine, 2nd
edition, Holland, JE and Frie, E, eds., Philadelphia: Lea and Febiger,

Chronic Hazard Advisory Panel of Asbestos.  1983 (July).  Report to the U.S.
Consumer Product Safety Commission by the Chronic Hazard Advisory Panel on
Asbestos.  Washington D.C.: Consumer Products Safety Commission.

Cooper, R, Cohen, R, Amiry, A.  1983.  Is the Period of Rapidly Declining Adult
Mortality in the U.S. Coming to an End?  Am, J. Public Health :73.      pp.
1091-1093.

Dement, JM, Harris, RL, Symons, MJ, et al.  1982.  Estimates of Dose-Response
for Respiratory Cancer among Chrysotile Asbestos Textile Workers.  In:  Inhaled
Particles ¥.,  Walton, TO, ed,, Oxford  : Pergamon.

Dement JM, Harris RL, jr., Symons MJ, Shy CM.  1983.  Exposures and mortality
among chrysotile asbestos workers,  PArt II: Mortality,  Am J Ind Med 4:421-
433.

Doll, R and Peto, R.  1981,  The Causes of Cancer: Quantitative Estimates of
Avoidable Risks of Cancer in the United States Today.  J. Nat, Cancer
Inst.:  66.  pp. 1191-1308.

Doll, R and Peto, R.  1985.  Asbestos: Effects on the health of exposure to
asbestos.  London, UK:  Health and Safety Commission.

Eddy, DM.  1980.  Screening for Cancer: Theory, Analysis, and Design.
Englewood Cliffs, N.J.: Prentice-Hall.

Henderson, VI and Enterline, PE.  1979.  Asbestos Exposure: Factors Associated
with Excess Cancer and Respiratory Disease Mortality.  Annals NY:  Academy of
Sci: 330.  pp. 117-126.
                                      V-l

                  * * *  DRAFT -- DO NOT QUOTE OR CITE  * * *

-------
Hobbs, MST.,  Woodward,  SD, Murphy, B et al.  1980,  The Incidence of
Pneumoconiosis,  mesothelioma, and other respiratory cancer In men engaged in
mining and milling crocidolite in Western Australia.  Biological Effects of
Mineral Fibers:  2.  pp. 615-625, IARC Scientific Publication No, 30.

Hughes, J and Weill, H.  1980.  Lung Cancer Risk Associated with Manufacture of
Asbestos-Cement Products. Lyon, France; IARC Scientific Publication No.  30,
pp. 627-635,

IGF Incorporated.   1988 (March),  Asbestos Exposure Assessment.  Prepared for
Dr Kin Wong,  Chemical Engineering Branch, Office of Pesticides and Toxic
Substances, U.S. EPA- Draft Report.

Jacob, G and Anspach, M.  1964,  Pulmonary Neoplasia among Dresden Amosite
Workers.  Annals N.Y. Academy of Sci.: 316.  p. 536.

Jones, JSP, Smith, PG,  Pooley, FD et al.  1980.  The Consequences of Exposure
To Asbestos Dust in a Wartime Gas Mask Factory.  Biological Effects of
Mineral Fibers:  2.  pp. 637-653, Lyon, France: IARC Scientific Publication  No.
30.

Langer, AM.  1986 (April 18).  Letter to Document Control Officer (&S-793),
Office of Toxic Substances, U.S. Environmental Protection Agency from Dr.
Arthur M. Langer,  Associate Director, Environmental Sciences Laboratory, Mount
Sinai Medical Center, NY.

McDonald, JC, Liddell,  FDK, Gtbbs, GW et al.  1980.  Dust Exposure and
Mortality in Chrysotile Mining, 1910-1975. Br, J. Ind. Med. :  37. pp. 11-24.

McDonald AD,  Fry JS, Wooley AJ, Mcdonald JC.  1983.  Dust exposure and
mortality in an American chrysotile textile plant.  Br J Ind Med 40:361-367.

National Research Council.  1984.  Nonoccupational Risks of Asbestiform Fibers,
Washington D.C.: National Academy Press.

Nicholson, WJ, Selikoff, IJ, Seidman, H et al.  1979.  Long-Term Mortality
Experience of Chrysotile Miners' and Millers in Thetford Mines, Quebec. Annals
NY Academy of Sci. : 330,  pp. 11-21.

Nicholson, WJ.  1983.  Quantitative Risk Assessment for Asbestos-Related
Cancers.  Washington, D.C.: U.S. Department of Labor, Occupational Safety and
Health Association, Contract J-9-F-2-0074,

Peto, J.  1979.   Dose-Response Relationships for Asbestos-Related Disease:
Implications for Hygiene Standards, Part II, Mortality.  Annals N.Y.  Academy
Sci  :330.  p. 195.

Peto, J.  1980,   Lung Cancer in Relation to Measured Dust Levels in an Asbestos
Factory.  In: Biological Effects of Mineral Fibers.  Wagner, JG, ed. Lyon,
France  : IARC Scientific Publication No. 30, pp.  829-836.

Peto, H, Seidman, H, and Selikoff, IJ. 1982.  Mesothelioma Incidence In
Asbestos Workers:  Implication for Models of Carcinogenesis and Risk
Assessment.   Br. J. Cancer  :45.  pp. 124-135.

                                      ¥-2

                  * * *  DRAFT  -- DO NOT QUOTE OR CITE  * * *

-------
Rubino, GF,  Piolatto,  G,  Newhouse,  ML et al.   1979.  Mortality of Chrysotile
Asbestos Workers at the Balangero Mine, Northern Italy.  Br. J. Ind. Med: 36.
pp. 187-194.

Seldman, H, Selikoff,  IJ and Hammond, EC.  1979.  Short-Term Asbestos Work
Exposure and Long-Term Observations.  Annals of N.Y. Academy Sci,:  330. pp.
61-89.

Selikoff, IJ, Hammond,  EC, Seidman,  H.  1979,   Mortality Experience in
Insulation Workers in the United States and Canada.  Annals of N.Y. Academy of
Sci.:  330.  pp. 91-116.

Stanton, MF, Layard M,  Tegeris, A.,  et al.,.  1981.  Relation of particle
dimension to carcinogenicity in amphibole asbestos and other fibrous minerals.
JNCI 64:965-975.

U.S. Department of Health and Human Services.   1981.  Vital Statistics of the
United States 1977:  Volume II -- Mortality Part A, Hyattsville, Md:
National Center for Health Statistics.

U.S. Department of Labor.   1986 (June 11).  Occupational- Safety and Health
Administration, Office of Regulatory Analysis.  Final Regulatory Impact and
Regulatory Flexibility Analyses of the Revised Asbestos Standard.

USEPA 1986.  Airborne Asbestos Health Assessment - Update.  Environmental
Criteria and Assessment Office, EPA/600/8-84/003F, Research Triangle Park, SO
June.

USCPSC.  1983.  U.S. Consumer Product Safety Commission.  Chronic hazard
advisory panel on asbestos (CHAP). Washington, DC; U.S. Consumer Product Safety
Commission.

Versar Incorporated.  1988.  Asbestos Modeling Study.  Prepared for Exposure
Evaluation Division, Exposure Assessment Branch, Office of Pesticides and
Toxic Substances, U.S. EPA Final Report.

Versar Incorporated,  1987 (September 25).  Nonoccupational Asbestos Exposure.
Prepared for Exposure Evaluation Division, Exposure Assessment Branch, Office
of  Pesticides and Toxic Substances, U.S. EPA Final Report.

WHO,  1985.  World Health Organization.  Environmental health criteria document
on  asbestos and other natural minerals.  Draft.
                                      V-3

                   * * *  DRAFT  -- DO NOT QUOTE OR CITE   * *  *

-------
REGULATORY IMPACT ANALYSIS OF CONTROLS
      ASBESTOS AND ASBESTOS PRODUCTS
                  FINAL REPORT
                    VOLUME II
                  APPENDIX A~E
                    Prepared for:
                , Christine Augustyniak
               Office of Toxic Substances
           U.S. Environmental Protection Agency
                     Prepared by:
                   ICF Incorporated
               Fairfax Virginia 22031-1207
                   January 19,  1989

-------

-------
                                  VOLUME II
                              TABLE OF CONTEHTS
Appendix A  - - Models and Computation Procedures	  A-l


   A. 1  Baseline Projections Models	  A.1-1

   A. 2  Fiber Supply Function Estimation  	,	  A.2-1

   A. 3  Ban/Phase-Down Simulation Model	,»	  A. 3-1

   A. 4  Exposure and Benefits Models Calculation Methods	  A.4-1

   A.5  Health Effects Computer Model	  A.5-1

   A.6  Additional Occupational and Nonoccupational Exposure
         Assumptions for Sensitivity Analysis	  A.6-1


Appendix B  -- Capital Convertibility and Quasi-Rents Determination ....  B-l

Appendix C  -- Economic Impacts Analyses	  C-l

Appendix D  -- Cost for Engineering Controls for Brake
                Maintenance/Repair	    D-1

Appendix E  -- Welfare Effects Under Alternative Fiber
                Supply Conditions	    E-l

-------

-------
           APPENDIXA,,",-,,MODELS AND  COMPUTATIONAL PROCEDURES
Sect.ion A. 2 - -
   This appendix reports the details of the specific computational techniques
and computer models developed for the analysis of the regulatory alternatives
for asbestos.  The appendix is organized  into five separate sections, each of
which presents details concerning different models and computational
procedures developed.  These five sections are as follows:

   Section A.I - - Presents procedures and models associated with estimating
                  the baseline growth rates for the asbestos products modeled
                  in this analysis.  These consist of growth rate projections
                  methods for non-brake products and a model of baseline
                  growth rates for brake  products.

                  Outlines the method used by Research Triangle Institute
                  (1985) to estimate the  supply function for fiber to the U.S.
                  This provides the elasticity of fiber supply for use in the
                  Asbestos Regulatory Cost Model (ARCM).

                  Presents the exact calculations performed and the computer
                  model for the ARCM.

                  Presents information on the calculations required to develop
                  health model exposure inputs from data reported in ICF
                  (1988) and Versar (1987) and an overview of the
                  computational methods of the health model.

   Section A,5 - - Presents the computer model used to estimate the health
                  effects in the baseline and under the different regulatory
                  alternatives considered in this analysis.

   Section A.6 -- Reviews the procedures used and the results of efforts to
                  estimate occupational and nonoccupational exposure
                  information for products and exposure settings for which  '
                  exposures are suspected by for which no quantitative data
                  are available,
Beetion A.3 --
Section A.4 --

-------

-------
A.I  BAS ELIHE  PRDJECTIOiS:i::: MODELS

   This appendix presents the  analyses  performed to estimate  baseline
quantities of  outputs  for each of  the asbestos  product markets  and to estimate
the baseline growth  rates for  asbestos  products over the course, of the several
decade timeframe considered  in this  study.   The baseline quantities of
asbestos product outputs were  developed based on the information collected in
the survey of  asbestos product manufacturers , which is reported in detail  in
Appendix F.  However, because  information for some  manufacturers of asbestos
products was not available,  techniques  were  required for developing total
production volume estimates  in light of these nonrespondents .   Thus,  the first
section of this appendix reports the methods used to estimate total production
volumes for each asbestos product  market based  on the survey  results ,

   Given these total production volumes for  each asbestos product markets,  the
next step is to define the future  outputs of these  markets in the absence  of
regulatory controls, that is,  the  baseline.   These  baseline growth rates are
important in the simulation  modeling because they determine the evolution  of
the asbestos fiber and products markets over time and thus determine the
characteristics of the markets that  will be  affected by the various regulatory
alternatives examined,
                             *

   Two different analyses' were conducted to  develop baseline  growth rate
estimates for  the numerous asbestos  product  markets.   Growth  rates for the
vast majority  of these product markets  were  developed using a very          <
straightforward projection technique based on the 1981 to 1985  growth
experienced in each  market.  Using this information,  as outlined in the second
section below, three different baseline growth  rate scenarios were developed,
ranging from a scenario in which the future '  output  of each product was simply
set equal to its 1985  (in most cases) output, to one in which the baseline
future growth  rates  for each product were set equal to their  1981 to 1985
growth rates .  Section 2 below outlines this method and the resulting growth
rate series in detail.

   The second  analysis undertaken  to develop baseline growth  rate figures
focused on two products exclusively  --  disc  brake pads and drum brakes for
light and medium weight vehicles.  Unlike most  of the other product markets, a
great deal is  known  about current  and past use  of asbestos in brakes and -about
trends in substituting non-asbestos  brakes in newer vehicles.   Coupled with
the facts that future sales  forecasts for automobiles are available (and of
reasonably high quality) and that  scrappage  rates for older vehicles are
reasonably well -documented,  this implies that a more sophisticated model of
future asbestos brake product  may  be warranted.   That is,  given the quantity
and quality of information available about the  future determinants of asbestos
brake production, a  model that captures the  influences of these determinants
in a coherent  fashion seems  appropriate.  Thus,  a "brake model" was developed
to predict future baseline 'growth  rates "for  asbestos  brake production.  This
model is presented in detail in Section 3 below.

   1.  Derivation of Total ..... ]?Jg|^acJ^.pJ3m^JL1SMfe§J.^fiJ^As|?^g-tQS ..... Products
   This section describes the three possible methods of  accounting for non-
respondents to the survey and presents the results for the methods that  appear
to be the best estimates for actual output of asbestos -containing products in
1985..

                                    A. 1-1

-------
    210  firms  were  surveyed and  responses were received  from  191 of them.  The
balance of 19 are  classified as non-respondents and  are listed in Exhibit
A,1.1-1 along with their  products.  Of  the  191 firms that have responded, 118
processed  asbestos in  1985 and  73  did not.

         1.1  Adjustment Methods

         Because  the asbestos regulatory cost aodel (ARCM) estimates the total
costs of regulating asbestos, the  model requires total  production of asbestos-
containing products to obtain accurate  results.  Some firms  have been
unwilling  to  provide this information,  so it must be estimated using the other
information to which we have access --  1981 TSCA 8
-------
                Exhibit A.1.1-1.   Asbestos  Survey Non-Respondents
         Company
                     Products
Abex Corporation
Allied Automotive
Alsop Engineering Company

American Cyanamid

Beaver Industries, Inc.

Boise Cascade Corporation

Brake Systems


Brassbestos


Capco Pipe Company, Inc.

Crane Packing

Karnak Chemical Corporation

Koch Asphalt Company


Koppers Company

Minnesota Mining &
  Manufac tur ing C omp any

Mortell Company

National Paint & Oil
  Company
Drum Brake Linings  (18)a
Disc Brake Pads for Light and Medium Vehicles (19)
Brake Blocks  (21)

Drum Brake Linings  (18)
Disc Brake Pads for Light and Medium Vehicles (19)
Disc Brake Pads for Heavy Vehicles  (20)
Brake Blocks  (21)

Specialty Paper (11)

Non-Roofing Adhesives, Sealants, and Compounds (30)

Specialty Paper (11)

Beater-Add Gaskets  (5)

Drum Brake Linings  (18)
Disc Brake Pads for Light and Medium Vehicles (19)

Drum Brake Linings  (18)
Disc Brake Pads for Light and Medium Vehicles (19)

Asbestos-Cement Pipe  (14)

Asbestos Packing (28)

Roof Coatings and Cements (29)

Roof Coatings and Cements (29)
Missile Liner (32)

Roof Coatings and Cements (29)

Non-Roofing Adhesives, Sealants, and Compounds (30)


Non-Roofing Adhesives, Sealants, and Compounds (30)

Roof Coatings and Cements (29)
                                    A.1-3

-------
                          Exhibit A.1.1-1  (Continued)
         Company
                     Products
Raymark Corporation
Brake Blocks (21)
Clutch Facings (22)
Automatic Transmission Components (23)
Friction Materials (24)
Steelcote Manufacturing     Non-Roofing Adhesives, Sealants, and Compounds (30)
Wheeling Brake Block
  Manufacturing
Brake Blocks (21)
Friction Materials (24)
aNumbers In parentheses indicate new TSCA product category numbers.
                                    A.1-4

-------
in several Industries be removed.  Second, BOM's method of data collection
involves the possibility (indeed, a strong -likelihood) that significant
double-counting and misclassification could occur.  As a result, it is likely
that for many of the BOM product groups the BOM totals are not reliable.
Similarly, it may also be the case that BOM's total' fiber consumption figure
(171,6 thousand short tons) is also probably in excess of the actual 1985
fiber consumption.  These considerations are explored further in the final
section below.  Finally, the 1985 survey results combined with the 1981 survey
strongly suggest that the rates of output change among the component products
that compose many of the BOM product groups were different.  Hence, to
allocate (apparently) missing fiber defined as the difference between the BOM
and ICF estimates would not be appropriate since the evidence suggests that
the component product categories in the BOM groups change at different rates.

        1.2  Results

        The problem that this analysis attempts to solve is a difficult one
since trying to determine the outputs of nonrespondents based on several
related pieces of information can yield multiple answers.  Nevertheless, there
are guides to selecting adjustments.  First, any adjustments should appear to
be reasonable and consistent with common sense.  Second, adjustments should
result in estimates that are consistent, to the extent possible, with all of
the information available.  Finally, adjustments should attempt to use all of
the information in the survey, including information obtained from respondents
concerning the activities of non-respondents.  Hence, in selecting the
recommended adjustment for each product category all of these considerations
were taken into account and are described below.

    Exhibit A.1.1-2 presents 1981 asbestos production data, reported 1985
asbestos production data (quantities reported in the 1985 survey), and Method
1 and Method 2 adjusted 1985 asbestos production data.  Adjusted 1985 asbestos
production data are the same as reported 1985 asbestos production data for 22
of the 36 product categories because there are no non-respondents in these
product categories.  Adjusted 1985 data using Methods 1 and 2 were computed
for 12 of the remaining 14 products.  These adjustment methods could not
generate estimates for 2 product categories (specialty paper and automatic
transmission components) because the only respondents have ceased processing
asbestos,

    Both methods of adjustment yield the same total production estimates
whenever all the respondents processed asbestos in 1985.  This occurs in 2 of
the 12 cases.  In all other cases, Method 2 yields a higher estimate because
it models non-respondents based on only the non-zero respondents, while Method
1 models them based on all respondents.  The difference between the two
estimates ranges widely, however, in most cases the difference is
approximately 15-25 percent.

    Method 2 is recommended in almost all cases for making the required
adjustments for two reasons.  First, it is fair to assume that a company that
refused to provide production information is probably still processing
asbestos.   Many of the non-respondents cited the cost and difficulty of
obtaining this information as the reason for their refusal.  If they did not
process asbestos, this probably would not be true.  Second, Method 2 yields
estimates which are broadly more consistent with BOM data.  Although both
                                    A.1-5

-------
                                                    Exhibit A.1.1-2  Adjusted 1985  Domestic Asbestos Production
Product
Commercial Paper (1)
Rot (board (2)
Millboard (3)
Pipeline Wrap (4)
Beater-ftdd Gaskets (5)
High-Grade Electrical Paper (6)
Roofing Felt (7)
Acetylene Cylinders (8)
Flooring Felt (9)
Corrugated Paper (10)
Specialty Paper (11)
Vinyl -Asbestos Floor Tile (12)
Asbestos Diaphragms (13)
Asbestos- Cement Pipe (14)
Asbestos-Cement Flat Sheet (15)
Asbestos -Cement Corrugated
Sheet (16)
Asbestos -Cement Shingle (17)
Drum Brake Linings (18)
Oisc Brake Pads - l«V (19)
Disc Brake Pads - HV (20)
Brake Blocks (21)
Clutch Facings (22)
Automatic Transmission
Components (23)
Friction Haterials (24)
Asbestos Protective Clothing (25)
Asbestos Cloth, Yarn, and
Thread (26)
Sheet Gaskets (27)
Asbestos Packing (28)
Roof Coatings and Cements (29)
Non-RoofSng Adhesives, Sealants,
arid Compounds. (30)
Asbestos-Reinforced Plastic (31)
Missile Liner (32)
Sealant Tape (33)
Battery Separator (34)
Arc Chutes (35)
Miscellaneous Products (36)
1981 Production
936 tons
0 tons
2,767 tons
2,150,615 squares
26,039 tons
706 tons
3,107,538 squares
819,212 pieces
127,403 tons
46 tons
2,090 tons
58,352,864 sq. yds,
N/A pieces
25,060,263 feet
452,683 squares
105,628 squares
266,670 squares
162,263,833 pieces
110,644,603 pieces
896,720 pieces
21,284,408 pieces
7,396,110 pieces
381,500 pieces
17,732,455 pieces
0 tons

5,901 tons
10,353,431 sq. yds.
714 torts
80,795,905 gallons
35,544,826 gallons
12,388 tons
4,006 tons
328,347,768 feet
2,226 pounds
20,406 pieces
d/
Reported
198S Production
0 tons
0 tons
581 tons
296,949 squares
15,023 tons
698 tons
0 squares
392,121 pieces
0 tons
0 tons
0 tons
18,300,000 sq. yds.
50 pieces
13,432,916 feet
22,621 squares
0 squares
176,643 squares
71,673,204 pieces
27,285,544 pieces
9,964 pieces
2,652,010 pieces
7,233,476 pieces
530,000 pieces
8,592,178 pieces
0 tons

1,125 tons
3,607,408 sq. yds.
149 tons
67,031,499 gallons
7,352,819 gallons
4,835 tons
1,008 tons
423,048,539 feet
2,046 pounds
900 pieces
0 tons
Adjusted
1985 Production
(Hethod 1)
0 tons
0 tons
581 tons
296,949 squares
16,463 tons
698 tons
0 squares
392,121 pieces
0 tons
0 tons
a/ tons
18,300,000 sq. yds.
b/ pieces
14,983,125 feet
22,621 squares
0 squares
176,643 squares
129,042,578 pieces
56,208,100 pieces
16,678 pieces
4,143,346 pieces
7,237,112 pieces
c/ pieces
8,718,609 pieces
0 tons

1,125 tons
3,607,408 sq. yds,
3 tons
73,781,734 gallons
9,019,715 gallons
4,835 tons
14,236 tons
423,048,539 feet
2,046 pounds
900 pieces
0 tons
Adjusted
1985 Production
(Hethod 2)
0 tons
0 tons
581 tons
296,949 squares
16,505 tons
698 tons
0 squares
392,121 pieces
0 tons
0 tons
Q 1 IhQflC
18,300,000 sq. yds.
b/ pieces
15,062,708 feet
22,621 squares
0 squares
176,643 squares
129,042,578 pieces
65,869,172 pieces
156,820 pieces
4,570,266 pieces
7,237,112 pieces
c/ pieces
8,719,541 pieces
0 tons

1,125 tons
3,607,408 sq. yds.
3 tons
75,977,365 gallons
9,612,655 gallons
4,835 tons
14,526 tons
423,048,539 feet
2,046 pounds
900 pieces
0 tons
a/  Hethod 1 and Method 2 adjusttnents could not be made  for  this product category.  See text for explanation.

bi  Method 1 and Method 2 adjustments could not be made  for  this product category because most of the firms were not surveyed in 1981
    or 1985.  Total industry production  is estimated based on  information supplied by Chlorine Institute.

c/  S.K. Wellman was the only positive 1985 respondent,  but  it plans to stop processing in 1987.  There is one non-respondent,
    however, we do not believe it Is appropriate to make an  adjustment on the basis of only one company which no longer processes
    Hence, the non-respondent's 1985 production is assumed to be equal to its 1981 production.

d/ Consistent units for this category do not exist.

-------
methods yield estimates that are lower than BOM's data,  Method 2 yields
estimates of total asbestos use that are closer to BOM's total.

    Exhibit A.1.1-3 reports the final adjusted quantities for all of the 36
asbestos-containing products.  In addition to the product quantities, both the
implied amount of fiber consumed in each category and the method of adjustment
are shown in the table.  The "Method of Adjustment" column reflects the 22
products for which no adjustment was required ("No Adjustment") and the 10 for
which Method 2 is recommended  ("Method 2").

    Exhibit A.1.1-3 also indicates that other methods are recommended for
three product categories -- specialty paper (11), automatic transmission
components (23), and missile liner (32).  As stated above, method 2 could not
be used to make corrections for specialty paper (11) or automatic transmission
components (23) because all of the respondents in those categories indicated
that they had stopped (or plan to stop) processing asbestos.^  Since the
adjustments use information on respondents' production levels, clearly these
corrections are infeasible.  Furthermore, the BOM estimates for the broader
product categories cannot be used to determine 1985 production for these two
products because so many other products are included in the BOM totals.
Hence, in these cases, setting 1985 production equal to 1981 production for
the non-respondents is reconnaended because no other adjustment method appears
to be feasible.  This assumption is likely to overstate the production levels
for these products, but this is not quantitatively important because 1981
asbestos fiber consumption by  these companies was less than 400 tons.

    An alternative method for  adjusting the 1985 reported quantities for and
missile liner (32) is recommended.  In this case, Method 2 produced results
that diverged widely from expectations and the BOM data.  Method 2 estimated
that consumption of asbestos fiber in missile liner was 2,180 tons while BOM
estimated that fiber consumption for Insulation Materials was 700 tons.  The
reason Method 2 yields such large estimates in this case is that the 1985
respondents in these categories produced small amounts in 1981, while the 1981
industry leaders refused to respond to the 1985 survey.  However, output from
these small companies increased .greatly from 1981 to 1985.  Consequently, when
the large growth rate of these small firms is applied to the 1981 industry
leaders, a very large estimate of 1985 production results.

    Finally,  the Method 2 adjustment for missile liner (32) is"an order of
magnitude greater than the 1981 fiber consumption level, again because of the
same problem that affected the packings and "gaskets category.  Adjusting the
estimate of fiber consumption  in missile liner (32) by assuming the BOM figure
for insulation material to be  correct -- missile liners is the only product
that falls into this category  -- is recommended.  Although the BOM data are
not always accurate due to aisclassification and multiple-classification,
missile liner is the only product in this BOM category.  Furthermore, given
the nature of the product,  -it  seems less likely that much miselassification
could occur in this category.  Hence, assuming that the single non-respondent
in this category accounts for  the entire difference between our survey data
and BOM data in this category  seems reasonable.   Therefore, the IGF and BOM
estimates for this category are identical.
     *- The only processing respondent in automatic transmission components
(23) had indicated it planned to stop processing asbestos in March 1987.

                                    A.1-7

-------
              Eshibit A.1.1-3  Final Adjusted 1985 Doraasfcic Aabeatos  Production
Product
Commercial Paper (1)
Roll board (2)
Millboard (3)
Pipeline Wrap (4)
Beater -Add Gaskets (5)
High-Grade Electrical Paper (6)
Roofing Felt {7)
Acetylene Cylinders (8)
Flooring Felt (9)
Corrugated Paper (10)
Specialty Paper (11)
Vinyl -Asbestos Floor Tile (12)
Asbestos Diaphragms (13)
Asbestos-Cement Pipe (14)
Asbestos -Cement Flat Sheet {15)
Asbestos -Cement Corrugated
Sheet (16)
Asbestos -Cement Shingle (17)
Drum Brake linings (18)
Disc Brake Pads - LMV (19)
Disc Brake Pads - H¥ (20)
Brake Blocks {21)
Clutch Facings (22)
Automatic Transmission
Components (23)
Friction Materials (24)
Asbestos Protective Clothing (25)
Asbestos Cloth, Yarn, and
Thread (26)
Sheet Gaskets (27)
Asbestos Packing (28)
Roof Coatings and Cements (29)
Non-Roofing ftdhesiws, Sealants,
and Compounds (30)
Asbestos-Reinforced Plastic (31)
Hissile Liner (32)
Sealant Tape (33)
Battery Separator (34)
Arc Chutes (35)
Miscellaneous Products (36)
Final Adjusted
1985 Production
0 tons
0 tons
581 tons
296,949 squares
16,505 tons
698 tons
0 squares
392,121 pieces
0 tons
0 tons
434 tons
18,300,000 sq. yds,
9,770 pieces
15,062,708 feet
22,621 squares
0 squares
176,643 sejuares
129,042,578 pieces
65,869,172 pieces
156,820 pieces
4,570,266 pieces
7,237,112 pieces
585,500 pieces

8,719,541 pieces
0 tons

1,125 tons
3,607,408 sq. yds.
3 tons
75,977,365 flat Ions
9,612,655 gallons

4,835 tons
4,667 tons
423,048,539 feet
2,046 pounds
900 pieces
0 tons
1985 Fiber
Consumption
0.0 tons
0.0 tons
435.8 tons
1,333.3 tons
12,436.4 tons
744.0 tons
0.0 tons
584.1 tons
0.0 tons
0,0 tons
92.1 tons
10,374.0 tons
977.0 tons
32,690.8 tons
2,578.8 tons
0.0 tons
3,893.0 tons
24,691.8 tons
7,119.2 tons
117.6 tons
2,643.6 tons
993.5 tons
2.5 tons

1,602.5 tons
0.0 tons

558.0 tons
5,441.1 tons
2.1 tons
29,551.2 tons
2,951.4 tons

812.1 tons
700.0 tons
1,660,2 tons
1.0 tons
13.5 tons
0.0 tons
Adjustment
«ethod
Bo Adjustment ml
Ho Adjustment
Mo Adjustment
Wo Adjustment
Method 2 b/
Ho Adjustment
No Adjustment
No Adjustment
No Adjustment
No Adjustment
Other c/
No Adjustment
Other d/
Method 2
Mo Adjustment
No Adjustment
No Adjustment
Method 2
Method 2
Method 2
Rethod 2
Hethod 2
Other e/

Method 2
Method 2

Method 2
Method 2
Method 2
Method 2
Method 2

No Adjustment
BOM estimate f/
No Adjustment
No Adjustment
No Adjustment
No Adjustment
Footnotes on next page.

-------
Exhibit A.1,1-3 (Continued)

FOOTHOTES

a/  Ho adjustment was made in product categories where all companies responded.

b/  Method 2 adjustment is described in the text,

c/  1085 asbestos production in this category was set equal to the 1981 production of the two non-respondents
    because all respondents no longer process asbestos.

d/  1985 asbestos production in this category was estimated based on information supplied by the Chlorine Institute,

e/  1985 asbestos production for this category has been asjuatetj by assuming that the nonrespondenb
    produced at its 1981 level.  See text for explanation.

f/  1985 asbestos production for this category was set equal to the BOM estimate for insulation.   See
    text for explanation.

-------
         1.3,   Comiparisonwith BOM Data

         In addition to the,1981 and 1986 production 'data,  the recommended
 adjusted figures can also be compared with the BOM's 1985  fiber usage.
 However,  because BOM uses only 13 product categories,  both the ICF reported
 and the  ICF recommended adjusted production data have  been multiplied by
 fiber-to-output ratios to yield fiber consumption for  each product category,
 These fiber consumption quantities were then sorted and summed according to
 the groups of products that compose each BOM category,

     Exhibit A.1.1-4 shows the resulting ICF reported fiber consumption,  the
 ICF adjusted consumption, and the BOM estimate of total fiber consumption for
 each BOM product category.   In most cases,  the adjusted ICF estimates are
 fairly close to the BOM estimates.   Except for a few cases,  differences
 between  the ICF and BOM estimates are small over- and  under-estimates.   The
 explanation for these small divergences could be the result of several
 factors:   (1)  applying fiber-to-output ratios to the ICF production data (to
 obtain fiber consumption) that do not exactly match those  experienced by all
 consumers of fiber;  (2)  misreporting of fiber use by survey respondents;  and
 (3)  misreporting of fiber use by the BOM survey respondents.

     This  last possible reason for the many small differences  between  the two
 sets of  estimates is important to point out.   In 1985  BOM  altered  the method
 by  which  it obtains asbestos consumption information.   The current method uses
 a survey  of domestic miners and millers in combination with import data  from
 the Census Bureau to estimate fiber consumption.

     In addition to the small positive and negative divergences between the BOM
 and ICF estimates of fiber consumption in these BOM categories,  two larger
 differences  are  in the two estimates of fiber consumption  in the Coatings and
 Compounds category and the total fiber used.   The Adjusted ICF estimate  for
 Coatings  and  Compounds is 3.0 thousand short  tons and  the  BOM estimate is 25.5
 thousand  short  tons.   Note that this is the ICF Adjusted estimate.

     At first  glance one  might conclude that the ICF estimate  for this category
 is  too low.   However,  it is possible that it  is the BOM estimate that is not
 quite  accurate.   There are  several reasons  that argue  for  the ICF  estimate an
 against the BOM  estimate.   First,  the adjusted ICF estimate makes  sense  when
 one  considers  the 1981 quantity,  the reported 1985 quantity,  and the  1981
 production levels of the non-respondents  in this  category.  There  are five
 non-respondents  in this  category which accounted  for about 25 percent of the
 1981 production  quantity of about 35,000,000  gallons.   The reported 1985
 production level  for the respondents  was  only slightly  above  7,000,000 gallons
 (see Exhibit A.1.1-2 for these  figures),  while  the ICF  adjusted quantity for
 1985  (using Method 2)  is almost 10,000,000  gallons.  This  implies  that the
 estimated production levels  for the  nonrespondents is slightly less than half
 of  their  level in 1981,  which  does not seem to  be unreasonable in  a market in
 which the  respondents' production (75  percent  of  1981 output)  declined by 70
 percent between  1981 and 1985.

     Second, if the  BOM estimate of fiber  consumption for Coatings  and
 Compounds  is correct for 1985,  then  this  implies  that the  nonrespondents  in
 this category would  have  to  have  produced more  than 7 times their  total  1981
 production  in 1985.   This does  not seem to  be reasonable given that production
by respondents declined  by  about  70 percent during that  period.

                                    A.1-10

-------
   Exhibit A.1.1-4.   1985 Domestic Asbestos Fiber Consumption
                  (in thousands of short tons)
Product Category
Asbestos -Cement Pipe
Asbestos -Cement Sheet
Coatings and Compounds
Flooring Products
Friction Products
Insulation Materials
Packings and Gaskets
Paper Products
Plastics
Roofing Products
Textiles
Other
Total
IGF
(Reported)3
29.6
6.4
2,3
10.4
20.2
0.2
5.1
13.7
0.8
26.1
0.6
3.2
118.6
IGF
(Adjusted)11
32.7
6.5
3.0
10.4
37.2
0.7 .*
5.6
15.0
0.8
29.6
0.6
iri 3,2
145.1
BOMC
30.9
7.3
25.5
7.7
37.4
0.7
7.1
18.5
0.8
28.9
1.3
171.6
aICF survey of prinary processors of asbestos.

blCF estimates.

CU.S. Department of the Interior, Bureau of Mines, Bureau of
Mineral Minerals Yearbook.
                            A.1-11

-------
    Another reason to believe that the ICF estimate for this category is
probably more accurate is that the possibility of misclassifying, and more
serious, double-classifying fiber use is particularly severe in the case of
Coatings and Compounds.  Coatings and compounds are very similar to Roofing
Products,  We believe that a substantial amount of fiber use in the BOM data
is double-classified in these two categories.  BOM's estimates of fiber
consumption in these two categories over the 1981 to 1985 period are quite
revealing.  These are tabulated in Exhibit A.1.1-5.

    The table shows that for these two categories, BOM's estimate of fiber
usage for the two products together until 1985 seem reasonable.  The 1985
total, however, is much higher than any previous year.  Furthermore, the split
of the total fiber used between the Coatings and Compounds and Roofing
Products categories changed dramatically across the years.  Note, however,
that the ICF estimate of total fiber use in these two categories (33 thousand
tons) is approximately the same as the BOM total for 1984 (31.6 thousand
tons).

    Another aspect of the BOM survey is also relevant here.  The BOM survey
attempts to determine fiber purchases, not necessarily use of fiber during the
year.  To the extent that firms are stockpiling fiber for use in future years,
the BOM estimates of fiber purchases will be larger than actual fiber use
during 1985.

    Finally, the reported 1981 production level in 1981 for Coatings and
Compounds and for Roofing Products were about 35 million gallons and 80
million gallons respectively.  These imply that 1981 fiber usage was about
31.5 thousand tons for Roofing Products and 11 thousand tons for Coatings and
Compound.  Thus, in 1981 the amount of fiber used in Coatings and Compounds
was far less than that used in Roofing Products, which is consistent with the
ICF estimates for 1985 but inconsistent with BOM's 1981 figures for fiber
usage in 1981.

    Based on these considerations, using the ICF estimate for Coatings and
Compounds and, consequently, the ICF estimate for total 1985 fiber
consumption, is recommended.
                                    A.1-12

-------
          Exhibit A.1.1-5.  Selected Bureau of Mines (BOM)
                  Asbestos Fiber Consumption Data
                    (in thousands of short tons)
                           1981     1982     1983     1984     1985


Coatings and Compounds     14.4     27.7     13.0     23.8     25.5

Roof Products              17.6      7.7      7.2      7.8     2g::g9

     Total                 32.0     35.4     20.2     31.6     54.4
                              A.1-13

-------
                                  ATTACHMENT
Method 1

    Mathematical Formulation:

    Let X^ represent 1981 asbestos production for a  1985 respondent  (i ranges
from 1 to R, where R Is the number of respondents).

    Let Xj represent 1981 asbestos production for a  1985 non-respondent  (j
ranges from 1 to N, where N is the number of non-respondents).

    Let Y£ represent 1985 asbestos production for a  1985 respondent.

    Let ¥4 represent corrected 1985 asbestos production for a 1985 non-
respondent .

                                      R
                                      t
                                     1-1 Yt
                                Y* -	x X*
                                 J    R        J
                                      e
                                     i-l Xj_

    Example:

    Suppose three companies produced asbestos-cement pipe  in 1981.   Company A
produced 200 tons,  Company B produced 500 tons, and  Company C produced 100
tons.  In 1985, Company B has told us it produced 450 tons of asbestos-cement
pipe, Company C has told us it produced 0 tons of asbestos-cement pipe,  and
Company A has refused to respond.  Total production  for Companies B  and  C was
600 (500 + 100) tons .in 1981,  and it fell to 450 (450 4- 0) in 1985.  Thus,
1985 output of respondents was 75 percent (450/600)  of 1981 production.  We
would then assume that the same decline was true for Company A. and estimate
its 1985 output to be 150 (0.75 x 200) tons.
                                    A.1-14

-------
Method:i::2

    Mathematical _. .Formulation :

    Let Zj, represent 1981 asbestos production for a 1985 non-zero respondent
(k ranges from 1 to P, where P is the number of non-zero respondents).

    Let Zj represent 1981 asbestos production for a 1985 non- respondent  (j
ranges from 1 to N, where N is the number of non - respondents ).

    Let Y|j represent 1981 asbestos production for a 1985 non-zero respondent,

    Let Yj represent corrected 1985 asbestos production for a 1985 non-
respondent .

                                      P
                                      £
                                     K-l Yk
                                      R
                                      fi
                                      -1 Zk
    Example :
    Suppose three companies produced asbestos -cement pipe in 1981.  Company A
produced 200 tons, Company B produced 500 tons, and Company C produced 100
tons.  In 1985, Company B has told us it produced 450 tons of asbestos -cement
pipe, Company C has told us it produced 0 tons of asbestos-cement pipe, and
Company A has refused to respond.  Total production for the non-zero
respondents (Company B) was 500 tons in 1981, and fell to 450 in 1985.  Thus,
1985 output of the non-zero respondents was 90 percent (450/500) of 1981
production.  We 'would then assume that the same was true for Company A and
estimate its 1985 output to be 180 (0.90 x 200) tons.
                                    A.1-15

-------
     2.   Baseline. Jgrowth:Rate  Projectlpns,jfor Asbestos Products

     This section  describes  the methods and rationale for .the alternative
baseline growth rate  assumptions used in the calculations  of costs  and
benefits.   The projections  of product growth rates presented in this  section
are  based on the  large  amount of information generated in  the course  of
conducting the survey of asbestos  products described in Appendix F.  ,Along
with historical information concerning the evolution of asbestos markets, the
information obtained  in the survey concerning 1985 production quantities is
invaluable as a guide,to developing appropriate assumptions  for the future
development of these  markets.

     The  remainder of  this section  is organized as  follows:

         «   Subsection 2.1 reviews  the findings of  the ICF  survey of
            1985 production  volumes for asbestos products and computes
            the growth rates actually experienced during the  1981 to
            1985 period,  and

         »   Subsection 2.2 outlines the methods used to develop
            alternative  baseline growth rates for the asbestos
            products.

         2.1   1985 Survey Results and Actual  Growth Rates from__1981  to  1985

         Exhibit A.1.2-1  shows  the  1981 production  quantities for the  asbestos
products,  the ICF adjusted  1985 quantities of these products developed from
the  ICF  survey, the implied annual rates of  growth for the products from the
1981 to  1985  experience,  and  the amount of fiber used in each product  in 1985.
Note first  that 5 of  the  36 products are no  longer produced  in 1985 according
to the ICF  survey.  Of  the  remaining 31 products,  3 do not have definable
rates of growth because  in  two cases (products 2 and 25) both 1981 and 1985
quantities  are zero,   and in the case of Miscellaneous Products (36), no
consistent units or definitions exist.  This leaves 28 products for which
meaningful non-zero growth  rates are definable.

     In most cases, the  actual  experience during the 1981 to  1985 period was
fairly steep  declines in output.   There are,  however,  a few  cases in which
actual experience during the  1981  to 1985  period was an increase, suggesting
that new uses or expanded use  of these products  occurred during that period.
However, in all cases in which positive growth occurred (including the newly
classified products 32 and  33),  the  amount of fiber used in  the product
category is extremely small relative to the  total,  as  shown  in the column
listing the amount of fiber for each product market.   Furthermore, in  the case
of product 23, the source of the positive  growth between 1981 and 1985 is the
introduction  of a new product  line which is  now being  phased out by the
product's- maker.   In  this case,  the  ICF survey contains detailed information
concerning the 1985,   1986,  1987, and 1988  production volumes  for this  company,
so projecting the  future  production  volumes  for  this market  is  reasonably
straightforward as discussed below.
                                    A.1-16

-------
                       Exhibit A, 1.2-1,  Comparison of Actual and Estimated Product Growth  Rates
Product
Coiwiercial Paper (1)
Rollboard (2)
Hillboard (3)
Pipeline Wrap (4)
Beater-Add Gaskets (5)
Hifh-Grade Electrical Paper (6)
Roofing Felt <7>
Acetylene Cylinders (8)
Flooring Felt (9)
Corrugated Paper (10)
Specialty Paper (11)
Vinyl -Asbestos Floor Hie (12)
Asbestos Diaphragms (13)
Asbestos -Cement Pipe (14J
Asbestos-Cement Flat Sheet {15}
Asbestos-Cement Corrugated
Sheet (16)
Asbestos-Cement Shingle (17)
Drum Brake Linings (18)
Disc Brake Pads - LHV (19)
Disc Brake Pads - HV (20)
Brake Blocks {21 5
Clutch Facings (22)
Automatic Transmission
Components (23)
Friction Materials (24)
Asbestos Protective Clothing C25)
Asbestos Cloth, Tarn, and
Ihread (26)
Sheet Gaskets (27)
Asbestos Packings (28)
Roof Coatings and Cements (29)
Non-Roofing Adhesives, Sealants,
and Compounds (30)
Asbestos-Reinforced Plastic (11)
Hissile Li|ier (32)
Sealant Tape (33)
Battery Separator (34)
Arc Chutes (35)
Miscellaneous Products (36)
1981 Production
936 tons
0 tons
2,767 tons
2,150,615 squares
26,039 tons
706 tons
3,107,538 squares
819,212 pieces
127,403 tons
46 tons
2,090 tons
58,352,864 sq. yds.
N/A pieces
25,060,263 feet
452,683 squares
105,628 squares

266,670 squares
162,263,833 pieces
110,644,603 pieces
896,720 pieces
21,284,408 pieces
7,396,110 pieces
381,500 pieces
17,732,455 pieces
0 tons

5,901 tons
10,353,431 sq. yds.
714 tons
80,795,905 gallons
35,544,826 gallons

12,388 tons
4,006 tons
328,347,768 feet
2,226 pounds
20,406 pieces
a/
Final Adjusted Growth Rate Original 1985 Fiber
1985 Production 1981 - 1985 Growth Rate Consumption
0 tons
0 tons
581 tons
296,949 squares
16,505 tons
698 tons
0 squares
392,121 pieces
0 tons
0 tons
434 tons
18,300,000 sq. yds.
9,770 pieces
15,062,708 feet
22,621 squares
0 squares

176,643 squares
129,042,578 pieces
65,869,172 pieces
156,820 pieces
4,570,266 pieces
7,237,112 pj«ce«
585,500 pieces
8,719,541 pieces
0 tons

1,125 tons
3,607,408 sq. yds.
S tons
75,977,365 gallons
9.612,655 gallons

4,835 tons
4,667 tons
423,048,539 feet
2,046 pounds
900 pieces
0 tons
-100.0QX
N/A
-32.31%
-39.04%
-10.77%
-0.28X
-100.00X
-16.82%
-100.00%
•100.00%
•32. SOX
-25.17X
N/A
-11,95%
-52,72%
-100.00X

-9.78X
-5.57%
-12.16%
-35.33%
-31.93%
-0.54%
11.30X
-16.26X
N/A

-33.92%
-23.17%
-74.54%
-1.53%
-27.89%

-20,96%
3.89%
6.54%
-2.09%
-54.17%
N/A
-3 .83%
M/A
-3.83X
-12.50%
-2.22%
-12,50%
-13.02%
If/A
-6.41%
-3,83%
-3.83X
-6.41X
N/A
-6.11X
-3. 18%
-3.18X

-3.18X
2.60%
3.30% b/
4.81% b/
4.78%
4.78%
4.78%
4.78%
-15.60%

-15,60%
-2.22%
-2.22%
-10.74X
-10.09%

-53.60X
N/A
U/A
N/A
N/A
-10.09%
0.0 tons
0.0 tons
435.8 tons
1,333.3 tons
12,436.4 tons
744.0 tons
0.0 tons
584.1 tons
0.0 tons
0.0 tons
92.1 tons
10,374.0 tons
977.0 tons
32,690.8 tons
2,578.8 tons
0.0 tons

3,893.0 torn
24,691.8 tons
7,119.2 tons
117.6 tons
2,643.6 tons
993.5 tons
2.5 tons
1,602.5 tons
0.0 tons

558.0 tons
5.441.1 tons
24
•* tons
29,551.2 tons
2,951.4 tons

812.1 tons
700.0 tons
1,660.2 tons
1.0 tons
13.5 tons
0.0 tons
»/  Consistent  units do not exist for this product,
b/ These are the growth rates actually used in the PEM.  Thay are not th* same as the arotrth rates In the «IA.
ti/A:  This information is either not available or not  applicable.

-------
          2.2   Baseline_Zroduct Growth Rates •

          In brief,  the basic approach for developing baseline  product growth
  rate  projections  is to define three alternative scenarios  for the  non-brake
  markets  (treated  separately in the next section).  'These are:

          •  Low Decline --  growth rates  equal to zero for all  products
            except where more detailed information  is available;

          «  High Decline --  growth rates equal to actual  1981  to  1985
            experience;  and

          »  Moderate Decline --  growth rates  equal  to one-half of the
            actual  1981 to  1985  declines.

     The  Low Decline scenario is very likely  to overstate the  amount  of
  asbestos used in  the future as  well as  the outputs of the  asbestos products
  because  the actual experience has been  substantial declines over time.
  However, this  scenario provides,  in a sense,  an upper bound for  the  amount of
  asbestos and  the  outputs of the asbestos  products  for the  future,  thereby
  probably overstating both  the costs and the  benefits of  the regulatory
  alternatives.   The High Decline scenario  may well  understate  the future.
  outputs  of these products  since it is conceivable  that the high  declines in
  the outputs of these products in the recent  past may not continue.   Thus, one
  might argue that  the High Decline scenario offers  a lower  bound  for  the costs
  and benefits of the Regulatory  Alternatives.   Finally, the Moderate  Decline
  scenario represents the midpoint of the two  extrenes.

     There  are  a few exceptions  to the general assumption that  future
  production for these products will either be  the same as in 1985 or  that the
  future growth  rates will be equal to (or  one-half  of)  the  1981 to  1985
  experience.  "These are  cases in which the IGF survey produced  additional
  information about  various companies'  production plans in 1986  and  1987.  In
  some cases companies indicated  that their 1986  production  levels would be
  zero, and  in one case,  a company provided its 1986 production  level  and
  indicated  that it  would cease processing  asbestos  during 1987.   In these
  cases, this additional  information is taken  into account for setting the 1986
  and 1987 production levels,  but that from these years forward, the future
  growth rates follow the assumption listed above.

     The  special cases  in which  additional information beyond 1985 is  available
  are products 8, 12,  15,  23,  28,  29,  30, and 31.  Hence,  in Table 2A  for
  example, the 1985  to 1986 growth rate for the Low  Decline  scenario is not
  zero, as it is  for  the  other products.  In one  case,  the 1985 to 1986 growth
  rate recommended is  -100 percent,  because  the survey indicated that  the
3 product quantity would  be zero  in 1986.   In the other cases,  the 1985 to 1986
  growth rate is negative, but  not  large  in absolute value,  indicating  that some
  additional information  about  1986  production  plans was available from the
  survey.   Finally,   in the Low  Decline  Scenario,  except  in the case of  product
  23 (for which  there  is  information on 1987 production as well),  the
 recommended growth  rate  after 1986 -for  these  special  cases is zero.

     The Low Decline  growth  rates  from 1985 to 1988  for product 23 were
 developed based on very  detailed  information  provided by one of  the  two
 producers of this  product.   This  company provided  its production quantities

                                     A. 1-18

-------
 for 1985, 1986, and 1987 for product 23, so specific rates of growth can be
 associated with each year.  However, this product also is produced by one
 nonrespondent company for whom little, if any, information is available.
 Hence, as outlined in a the previous subsection, the 1985 quantity of product
 23 is assumed to be equal to the 1981 production of the nonrespondent plus the
 reported production for the respondent company.  The 1985 to 1986 growth rate
 for this product is computed from the reported drop in production by the
 respondent based on continued production by the nonrespondent equal to its
 1981 production level.  Similarly, the 1986 to 1987 growth rate for this
 product is computed from the reported drop in production by the respondent and
 an unchanged level of production for the nonrespondent.  Since the respondent
 indicated that it would cease producing this asbestos product during 1987, the
 1987 to 1988 growth rate reflects this exit from the market and the growth
 rate for the product after this time is assumed to be zero, consistent with
 the assumption that the nonrespondent would continue to produce at its 1981
 level (because no other information is available).

     Finally, there are a few cases in which the 1981 to 1985 experience was
 positive growth.  These are products 23, 32, and 33.  Product 23, as discussed
 above, has growth rates for post-1985 years based on the actual experience of
 a company in this market,  andsthis information suggests that this market will
 experience declines in 1986 and 1987.  However, several considerations suggest
 that in the cases of products 32 and 33, the future growth rates will not be
 positive.  The case of sealant tape, product 33, is one in which growth
 occurred during the 1981 to 1985 period.  However,  the .IGF survey suggests
 that during the same period,  the quantity of asbestos fiber used per foot of
 .tape declined.   Hence, the rate of increase of sealant tape footage production
 is not indicative of the rate of increase of fiber:usage in this category --
 which was about 2 percent  per year during this period,  rather than the 6
 percent output growth listed in the table.   Furthermore,  the ICF survey also
 indicates that many competitive substitute materials are now available or are
 nearly on the market.   Thus,  one would not necessarily expect the 1981 to 1985
 trend in asbestos usage to continue for this product.  In light of these
 considerations,  the zero future growth assumption in all scenarios for this
 product seems reasonable.

     Missile liner (32) is  another category.in which positive growth appears to
.have occurred during the 1981 to 1985 period.   However, one should consider
 two important facts for this  product.  First,  the 1985  total production figure
 is based on the  BOM estimate  of 1985 fiber usage.   As outlined in the previous
 section,  this procedure was necessary because the respondents in this category
 produced very small amounts of missile liner in 1981, but grew substantially
 (in percentage terms)  between 1981 and 1985.   Applying  this percentage growth
 to the single non-respondent  results in a very large estimate for "1985 missile
 liner because the non-respondent's 1981 production was  large.   Given the data
 problems  for this category, and the fact that the BOM category including this
 product contains only missile liner,  using the BOM estimate Is reasonable.
 However,  as outlined in that  same previous  memorandum and as indicated in
 Exhibit A. 1.2-2  above,  the BOM estimates should not necessarily be regarded as
 absolutely correct.   Second,  the amount of fiber used in missile liner is,  for
 the most  part,  confidential information given the nature  of the ultimate
 product into which the fiber  goes.   Most of this information is classified by
 DoD and,  hence,  not available to the study.   Finally,  the future course of
 missile production is  extremely difficult to predict because it depends on the
 economic  viability  of the  space shuttle and on future strategic arms policies.

                                    A.1-19

-------
                    Exhibit A.1.2-ZA  ARCH Product Growth Rates - Low Decliaa
Product
Commercial Paper (15
Rollboard (2)
Millboard (3)
Pipeline Wrap (4)
Beater-Add Gaskets (5)
High-Grade Electrical Paper {6}
Roofing Felt (7)
Acetylene Cylinders (8)
Flooring Felt (9)
Corrugated Paper (10)
Specialty Paper (11)
Vinyl-Asbestos Floor Tile (12)
Asbestos Diaphragms Ct3)
Asbestos -Cement Pipe {14)
Asbestos- Cement Flat Sheet (15)
Asbestos -Cement Corrugated
Sheet (16)
Asbestos-Cement Shingle (17)
Drum Brake Linings (18)
Disc Brake Pads - L«V (19)
Disc Brake Pads - HV (20)
Brake Blocks (21)
Clutch Facings (22)
Automatic Transmission
Components (23)
Friction Materials (24)
Asbestos Protective Clothing (25)
Asbestos Cloth, Yarn, and
Thread (26)
Sheet Gaskets (27)
Asbestos Packings (28)
Roof Coatings and Cements (29)
Non-Roofing Adhesives, Sealants,
and Compounds (30)
Asbestos-Reinforced Plastic (31)
Missile Liner (32)
Sealant Tape (33)
Battery Separator (34)
Arc Chutes (35)
Miscellaneous Products (36)
Recomnended Recommended Recommended Recommended
Growth Rate Growth Rate Growth Rate Growth Rate
1985-1986 1986-1987 1987-1988 1988-2000
N/A
N/A
0.00%
0.00%
0.00%
0,00%
N/A
-21.42%
N/A
N/A
O.OOX
-100.00%
0.00%
0.00%
-77.17%

0.00%
0.00%
a/
a/
0,00%
0.00%
0,00%
-54.70%

0.00%
N/A
0,00%

0,00%
-66.67%
-26.33%
-19.41%

-12.10%
0.00%
0,00%
b/
b/
N/A
N/A
H/A
0.00%
0.00%
0.00%
O.OOX
N/A
0,00%
«/A
«/A
0.00%
M/A
0.00%
0.00%
0.00%

0,00%
0.00%
a/
a/
0.00%
0.00%
0.00%
-78,30%

0.00%
N/A
0.00%

0.00%
0.00%
0.00%
0.00%

0.00%
0.00%
0.00%
b/
b/
N/A
N/A
N/A
0.00%
0.00%
0.00%
0.00%
N/A
0.00%
N/A
N/A
0,00%
«/A
0.00%
0.00%
0.00%

0.00%
0.00%
a/
a/
0.00%
0.00%
0.00%
-4.40%

0.00%
K/A
0.00%

0,00%
0.00%
O.OOX
0.00%

0.00%
0.00%
0,00%
b/
b/
»/A
»/A
»/A
0.00%
0.00%
0,00%
0.00%
N/A
0.00%
N/A
N/A
0.00%
N/A
0.00%
0.00%
0.00%

0.00%
0.00%
a/
a/
0,00%
0.00%
0.00%
0.00%

0.00%
N/A
0,00%

0,00%
0.00%
0.00%
0.00%

0.00%
0.00%
0.00%
b/
b/
N/A
a/  Growth rates for this product were estimated using a separate model and are presented In the ntxt section,
b/  These categories were not included in the ARCH.
N/A: Growth  rates are not applicable for this product because qantfty produced is zero.

-------
                     Exhibit A.1.2-2B ARCM Product Growth Rates - Modsrata Decline
Product
Commercial Paper {1}
Roil board {2}
Millboard (3)
Pipeline Wrap (4)
Beater-Add Gaskets (5)
Hfgh-Grade Electrical Paper (6)
Roofing Felt (7)
Acetylene Cylinders (8)
Flooring Felt (9)
Corrugated Paper (10)
Specialty Paper (11)
Vinyl -Asbestos Floor Tile (12)
Asbestos Diaphragms {13}
Asbestos-Cement Pipe {14)
Asbestos-Cement Flat Sheet (15)
Asbestos-Cement Corrugated
Sheet (16}
Asbestos-Cement Shingle (17)
Drum Brake Linings {18}
Disc Brake Pads - LHV {19}
Disc Brake Pads - HV {20}
Brake Blocks (21 J
Clutch Facings {22)
Automatic Transmission
Components (23)
Friction Materials (24)
Asbestos Protective Clothing {25}
Asbestos Cloth, Yarn, and
Thread (26)
Sheet Gaskets {27}
Asbestos Packings {28}
Roof Coatings and Cements (29)
Non- Roof ing Adhesives, Sealants,
and Conpounds {30}
Asbestos-Reinforced Plastic {31}
Missile Liner {32}
Sealant Tape {33}
Battery Separator {34}
Arc Chutes {35}
Miscellaneous Products {363
Recommended Recommended Reeoiroended Reeonmended
Growth Rate Growth Rate Growth Rate Growth Rate
1985-1986 1986-1987 1987-1988 1988-2000
H/A
M/A
-16.15%
-19.51%
-5.39%
-0.14%
N/A
-8.41%
N/A
N/A
-16.25%
-100.00%
0.00%
-5.98%
-26.36%

O.OOX
-4.89%
«/
a/
-17.67%
-15.96%
-0.27%
-54.70%

-8.13%
N/A
-16.96%

-11.59%
-66.67%
-0,76%
-13.94%

-10.48%
0.00%
3.27%
b/
b/
N/A
N/A
N/A
-16.15%
-19.51%
-5.39X
-0.14%
N/A
-8.41%
N/A
N/A
-16.25%
N/A
0.00%
-5.98%
-26.36%

0.00%
-4.89%
a/
a/
-17.67%
-15.96%
•0.27%
-78.30%

-8.13%
N/A
-16.96%

-11.59%
-14.92%
-0.76%
-13.94%

-10.48%
0.00%
3.27%
b/
b/
N/A
N/A
N/A
-16.15%
-19.51%
-5.39%
-0.14%
N/A
-8.41%
N/A
N/A
-16.25%
N/A
0.00%
-5.98%
-26.36%

0.00%
-4.89%
B/
a/
-17.67%
-15.96%
-0.27%
-4.40%

-8.13%
N/A
-16,96%

-11.59%
-14.92%
-0.76%
-13.94%

-10.48%
0.00%
3.27%
b/
b/
N/A
N/A
N/A
-16.15%
-19.51%
-5.39%
-0.14%
N/A
-8.41%
N/A
K/A
-16.25%
N/A
0.00%
-5.98%
-26.36%

0.00%
-4.89%
»/
a/
-17.67%
-15,96%
-0.27%
0.00%

-8.13%
N/A
-16.96%

•11.59%
-14.92%
-0.76%
-13.94%

-10.48%
0.00%
3.27%
b/
b/
N/A
a/  Growth rates for this product were estimated using a separate model and are presented in the next section.
b/  These categories were not included in the ARCM.
H/A:  sronth rates are not applicable for this product because qanttty produced is zero.

-------
                     Exhibit A.1.2-2C  ARCH Product Growth Satas - High Daelino
Product
Commercial Paper (1)
Rotlboard (2)
Millboard (3)
Pipeline Wrap (4)
Beater-Add Gaskets (5)
High-Grade Electrical Paper <6>
Roofing Felt (7)
Acetylene Cylinders (8)
Flooring Felt (9)
Corrugated Paper {10}
Specialty Paper (11)
Vinyl -Asbestos Floor Tile {12}
Asbestos Diaphragms (13)
Asbestos-Cement Pipe (14)
Asbestos-Cement Flat Sheet (15)
Asbestos-Cement Corrugated
Sheet (16)
Asbestos-Cement Shingle <17>
Drum Brake Linings <18)
Disc Brake Pads - LMV <19)
Disc Brake Pads - HV <20)
Brake Blocks (Z1)
Clutch Facings (22)
Automatic Transmission
Components (23)
friction Materials (24)
Asbestos Protective Clothing (25)
Asbestos Cloth, Yarn, and
Thread (26)
Sheet Gaskets (27)
Asbestos Packings (28)
Roof Coatings and Cements (29)
Bon-Roofing Adhesives, Sealants,
and Compounds (30)
Asbestos-Reinforced Plastic (31)
Missile Liner (32)
Sealant Tape (33)
Battery Separator (34)
Arc Chutes (35)
Miscellaneous Products (36)
Recommended Recommended Recommended Recommended
Growth Rate Growth Rate Growth Rate Growth Rate
1985-1986 1986-1987 1987-1988 1988-2000
N/A
N/A
-32.31%
-39.03%
-10.77%
-0.28%
N/A
-16.82%
N/A
N/A
-32.50%
-100.00%
0,00%
-11.95%
-52.72%

0.00%
-9. 78%
a/
a/
-35,33%
-31.93%
-0.54%
-54.70%

-16.26%
H/A
-33.92%

-23.17%
-66.67X
•1.53%
-27.89%

-20.96%
0.00%
3.27%
b/
b/
N/A
N/A
H/A
-32.31%
-39.03%
-10.77%
-0.28%
N/A
-16.82%
N/A
H/A
-32.50%
H/A
O.OOX
-11.95%
-52.72%

0.00%
-9,78%
a/
a/
•35.33%
-31 .93%
-0.54%
-78.30%

-16.26%
N/A
-33.92%

-23.17%
-29.84%
-1.53%
-27.89%

-20.96%
0.00%
3.27%
b/
b/
N/A
N/A
N/A
-32.31%
-39.03%
-10.77%
-0.28%
H/A
-16.82%
H/A
N/A
-32.50%
N/A
0,00%
-11.95%
-52.72%

0.00%
-9.78%
a/
a/
-35.33%
-31.93%
-0.54%
-4.40%

-16.26%
N/A
-33.92%

-23.17%
-29.84%
-1.53%
-27.89%

-20.96%
0.00%
3.27%
b/
b/
N/A
N/A
H/A
-32.31%
-39.03%
-10.77%
-0.28%
H/A
-16.82%
H/A
H/A
-32.50%
H/A
0.00%
-11.95%
-52.72%

0.00%
-9.78%
a/
a/
-35.33%
-31 .93%
-0.54%
0.00%

-16.26%
N/A
-33.92%

-23.17%
-29.84%
-1.53%
-27.89%

-20,96%
0.00%
3.27%
b/
b/
N/A
a/  Growth rates for this product were estimated using a separate model  and are presented in the  next section.
b/  These categories were not included in the ARCM.
H/A:  Growth rates are not applicable for this product because qantlty produced Is  zero.

-------
Therefore, It again does not seem unreasonable to assume a zero growth rate in
all scenarios for this product as well.
                                   A,1-23

-------
     3.  Asbesto_s_Brakje...Produc.$ii.o^:.Forecast;

        3.1   Introduc t ion

        This  section presents  the three  sets of baseline growth rates  for
 asbestos drum brakes in light  and medium vehicles (product category 18)  and
 asbestos disc brakes in light  and medium vehicles (product category 19)  to  be
 used in the Asbestos Regulatory Cost Model (ARCM).   It reviews  the  methodology
 underlying the model and presents the input data used,  the assumptions made,
 and  the results obtained.   This model generates forecasts of changes in  output
 of asbestos drum brakes and asbestos disc brakes which,  along with  the 1985
 levels of  output of  these categories,  provide the .baseline forecast of
 asbestos product quantities for these two categories in the ARCM.   Growth
 rates for  the other  products being modeled are derived separately.

     Drum brake systems  consist primarily of two parts --a round brake drum
 which is attached  to the rotating wheel  and axle and a pair of  curved,
 semi-circular brake  shoes which are  inside the drum.   The vehicle is stopped
 when the brake shoes are forced out  against the brake drum.   This action
 creates friction,  which arrests the  motion of the axle and the  wheel.  The
 brake shoes are lined with asbestos  because of its  thermal stability,
 reinforcing properties,  flexibility,  and resistance to wear.  Because each
 wheel is attached  to a  drum and each drum contains  two brake shoes  and
 asbestos linings,  there are eight linings on a vehicle that has front and rear
 drum brakes.

     Disc brake systems  consist primarily of two parts --a flat, circular
 rotor which is attached to the rotating  wheel and axle and a caliper which
 contains two  flat  disc  brake pads that are suspended on either  side of the
 rotor.  The vehicle  is  stopped by pressing the brake pads onto  the  rotor in
much the same way  that  bicycle hand  brakes are pressed onto a bicycle wheel.
This creates  friction which arrests  the  motion of the axle and  the  wheel.   The
brake pads consist of asbestos because of its thermal stability, reinforcing
properties, flexibility,  .and resistance  to wear.  Because each  wheel is
 attached to a rotor  and each rotor requires two disc pads to  stop it, there
 are  eight pads on  a  vehicle that  has  front and rear disc brakes.

     Estimating total sales  of  asbestos disc brakes  and asbestos drum brakes
 involves two distinct exercises.   One  is  estimating sales of  brakes in new
vehicles and  the other  is  estimating  sales of replacement brakes on existing
vehicles.   Further complicating the projection analysis  is the  fact that many
future brakes will not  be  made of asbestos mixtures.   Some will continue to be
asbestos,  but others will  be composed  of substitutes  such as  serai-metallic  or
aramid fiber mixtures.

    The task of estimating new brake  sales  is  relatively straightforward --
depending primarily  on  the  forecasts  for  new car  sales and the  type of brake
system installed as  original equipment --  however,  forecasting  replacement
sales is much more complex.  Replacement  brake  sales  depend on  a number  of
factors including:

        •   sales of new  light  vehicles in previous  years;

        •   the type of brakes  installed  as  original equipment (i.e.,
           disc vs, drum) ;

                                   A.1-24

-------
         •   the  composition of brakes  installed as  original  equipment
            (i.e.,  asbestos vs. non-asbestos)';

         •   the  expected life of brakes, which,  in  turn,  depends  on;

                the number  of miles  a  brake  lasts;

                the type of surface  and environment the vehicle is
                driven on;  and

                the number  of miles  the vehicle  on  which  it  is
                placed is driven annually;

         •   the  survival probability or scrappage rate for existing
            vehicles which  depends on:
               new vehicle prices;
               used vehicle prices;
               scrap values; and
               repair costs.
    Correctly accounting for all these influences is quite difficult.  Our
methodology tries to address all of these issues in an operational and
systematic manner by making a number of assumptions drawn from aggregated
data.  These assumptions pertain to the following:  type of future brake
systems (proportion of drum brakes to disc brakes), composition of future
brake systems (proportion of asbestos brakes to non-asbestos brakes), average
life of brake systems, survival probabilities for light vehicles  (cars and
light trucks), current stock of light vehicles, and future sales  of  light
vehicles,

    The rest .of this memorandum consists of five sections.  Section  3.2
outlines the methodology used; Section 3.3 deals with the key assumptions made
and data used for producing our forecasts; Section 3.4 reports the results of
our forecasts; Section 3.5 discusses the sensitivity of these results to
various data inputs; and Section 3.6 summarizes the conclusions.

        3.2  Methodology

        Brake forecasts have been developed for four product categories:
asbestos disc brakes on trucks, asbestos drum brakes on trucks, asbestos disc
brakes on cars,  and asbestos drum brakes on cars.  Although the same
procedures have been used to develop forecasts for all four categories, the
methodology will be described in detail using the first category as an
example.

    There are four major steps in forecasting asbestos brake sales:

        •  estimate the outstanding stock of asbestos brake pads or
           linings,  by model year,  in 1985;

        •  compute the future stock of brake pads or linings on
           existing vehicles, by model year;
                                   A.1-25

-------
         *   compute the future stock of asbestos brake pads  or linings
            on vehicles not yet "built,  by model year,  and

         »   compute annual replacement  and new asbestos brake pad. or
            lining sales.

     The  outstanding stock of asbestos  disc brake pads in trucks,  by model
year,  in 1985 is obtained by multiplying the outstanding number of trucks  in
1985 by  three factors:   the number of  brake pads or linings (8) on each  truck
(this  gives us the number of brake pads or linings  on the existing stock of
trucks), the percentage of total brake pads or linings which are  disc brake
pads (this  gives us the total number of disc brake  pads on  the  existing  stock
of  trucks),  and the percentage of disc brake pads which are asbestos (this
gives  us the total number of asbestos  disc brake pads on the existing stock of
trucks),

     The  future stocks  (1986 and beyond) of asbestos disc brakes on existing
trucks, by  model year,  are obtained by multiplying  the existing stock of
brakes by the appropriate survival probabilities.   This can best  be
illustrated through an example.

     Suppose there are  100 disc brake pads on 1970 model year trucks
outstanding in 1985.   To  compute the number of disc brake pads  on 1970 model
year trucks outstanding in 1986,  we multiply 100 by the conditional
probability that a truck  that has survived fifteen  years will survive into its
sixteenth year.   The conditional probability can be computed by dividing the
sixteen year survival  probability by the fifteen year survival  probability
(38.5  percent/44,8 percent or 0.859 in this case).  This computation is
performed for each year from 1986 until the year 2000 for each  model year.
For  example,  multiplying  100 by 0,859  yields 86 as  the number of  disc brakes
on  1970 model year trucks outstanding  in 1986,

     The future stocks  (1986 and beyond)  of asbestos disc brake  pads in trucks
not  yet built is computed in two steps.   We first compute the-number of  new
asbestos disc brake-pads  that will be  installed in  trucks each  year.  This is
forecasted  truck sales  multiplied by the percentage of total brake  pads  and
linings which are disc  pads (assumed to be 55 percent),  the percentage of disc
brake  pads  which are asbestos (assumed to be 15 percent), and the number of
brake  pads  or linings  per truck (8).   The second step is to take  this number
and  to project it into  the future by multiplying it by the  appropriate truck
survival probability.   For instance, if 100 asbestos  disc brakes on 1987
trucks are produced in 1987,  we  multiply 100 by the one year survival
probability  for  trucks  to generate the  stock of these brake pads existing on
surviving trucks  in 1988.   To generate  the stock of these brake pads existing
on surviving trucks in  1989 we multiply 100 by the  two year survival for
trucks; this  process is repeated for each year of the forecast.

     To estimate  the number of disc brake pads that  were replaced in 1986, we
computed the  number of  trucks that were built in 1982,  1978,  1974,  1970, 1966,
1962,  and 1958,  (all brakes are  assumed to be replaced every four years, as
discussed below)  that are still  surviving.   The number of surviving trucks of
each model year  is  then multiplied by  8  (to get the total number of brake
pads),  by the  percentage  of disc  brake  pads installed on trucks of  that model
year,  (to get  the number  of disc  brake  pads),  and by  the  percentage  of disc
brake pads which were asbestos  in that  model year (to get asbestos  disc brake

                                    A.1-26

-------
pads).  This gives us  the number  of  replacement asbestos  disc  brake  pad  sales
for  trucks  in 1986.  When we  add  this number  to the  number of  new asbestos
disc brake  pads on 1986  trucks, we have  our forecast for  total 1986  asbestos
disc brake  pad sales for trucks.  This step is  repeated for each year  of the
forecast,

     This methodology is  then  repeated for  the other  three categories --
asbestos drum brake linings on trucks, asbestos disc brake pads on cars,  and
asbestos drum brake linings on cars.  Appendix  A presents the  mathematical
formulation which underlies the model,

        3.3  Key Assumptions  and  Data Inputs

             3.3.1  Type of JBrake.	Systerns

             The data  on types of brake  systems are  derived from data  in
various issues of Wardf,5 Automotive Yearbook.^   The  data  had to be derived
using certain simplifying assumptions because it was either unavailable  for
some years  or not exactly the information we  needed.   Specifically,  we need to
know the percentage of all brake  systems on cars and on trucks that  are  disc
and  the percentage that  are drum  for each model year.

     The first data series we  examined was percentage of domestic cars  with
disc brake  systems,  Ward's Automotive	.Yearbook 1986 provides  this information
for  domestic cars for  the years 1954-1985.  Because  no domestic cars had disc
brake systems prior to 1966,  we have assumed  that all brakes on cars of
earlier model years are  drum  brakes.  Second, we have assumed  that disc  brakes
were placed only on front axles.  Therefore,  to obtain the percentage  of total
brake systems, we must multiply the percentage  of cars with front disc brakes
by 0.5.  All remaining brakes are assumed to  be drum brakes.   This method is
used for the years 1963-1974.  Separate data  for imported cars is not
available.  Therefore, it has been assumed that the  domestic percentages  also
apply to imports.

    Ward's Automotive  Yearbook 1976 and subsequent issues provide separate
data for imported cars.  Therefore, we used this information for model years
1975-1985 to compute a weighted average of the  percentage of all cars  with
disc brakes.  Once again, it  was  assumed that all other brakes are drum
brakes.  Ward's Automotive Yearbook 1978 and  subsequent issues provide data on
cars with disc brakes  on both the front and rear axles.   Accordingly,  this
information is used in computing  the weighted average of  the percentage  of all
cars with drum brakes  for model years 1977-1985,

    This last computation is  the  one we would have ideally used for  all model
years if the data had been available.  However,  the  simplifying assumptions we
have made should not alter our results greatly.  Domestic cars accounted  for
approximately 75 percent of all U.S. sales for  model  years  1963-1974 so  the
percentage of disc brakes on  domestic cars and  the percentage  of disc  brakes
on all cars will not differ significantly.  In  addition,  the numbers are
similar in the years for which we have data --  1975-1985.   Second, data  on
cars with disc brakes  on both front and rear  axles is  not available  prior to
model year 1977 (model year 1978  for imports).   Since only 3.2 percent of all
     2 Ward's Automotive Yearbook, 1976-1986,
                                    A.1-27

-------
cars had disc brakes  on both  axles  in  1977,  It  is not  likely  that a
significant number of cars, if  any,  in earlier  model years had disc brakes on
both axles.  Table A.1.3-1 presents  the data for the percentage of brakes that
are disc.

    The data for  trucks is not  as complete as the car  data.   First of all,
data on disc brakes on trucks for model years prior to 1976 is unavailable.
In addition, separate data for  imported trucks  is not  available.  Finally,
there is no information on trucks with front and rear  disc brakes.

    As a result,  we have assumed that  the percentage of disc  brakes on trucks
is the same as the percentage of disc  brakes on cars for model years prior to
1976.  Furthermore, we have assumed  that the percentage of disc brakes on
domestic cars is  the  same as  the percentage  of  disc brakes on all (domestic
and imported) cars,   Because  disc brakes are placed on the rear wheels of
predominantly luxury  and high-performance cars, it is  likely  that a very small
percentage, if any, of trucks have rear disc brakes.   Therefore, we have
assumed that no trucks have rear disc  brakes.   Finally, it should be noted
that Ward's Automotive Yearbook 1982 and subsequent issues only provide data
for power disc brakes.  In model years 1979  and 1980,  100 percent of trucks
had either manual or  power disc brakes.  It  has been assumed  that this holds
true for subsequent years and all front brakes  which are not  power disc are
manual disc for model  years 1981-1985.

    The final assumptions, we  need are  for the percentage of future brake
systems that will be  disc brakes.  We  have assumed that the 1985 percentages
for both cars and trucks will apply  for model year 1986 and all future model
years.  Thus, 53.4 percent of all car  brake  systems will be disc brakes while
50 percent of all truck brake systems  will be disc brakes.  It should be noted
that this may understate the  number  of disc  brakes and overstate the number of
drum brakes slightly because  more cars may move to front and  rear disc brakes
in the future, but this will  be examined in  the sensitivity analysis.  Table
A.1.3-1 presents  the  data for the percentage of car brakes that are disc while
Table A.1.3-2 presents the data for  the percentage of  truck brakes that are
disc.

             3.3.2  Composition of BrakeaiSystems

             Before 1982, almlrii.brakemmpads	and .linings .were made using,,, asbestos.
However, currently between 80 percent  and 90 percent of all disc brake pads
are made using asbestos substitutes, and between 5 percent and 10 percent of
all druni brake linings are made using  asbestos  substitutes (IGF 1987).  We
have assumed that 85 percent  (the midpoint of the 80 percent  to 90 percent
range) of all current  and future original equipment market (OEM) disc, brakes
will not contain  asbestos.  We  have also assumed that  7.5 percent (the
midpoint of the 5 percent and 10 percent range) of all  current and future OEM
drum brakes will not  contain  asbestos.  These are conservative assumptions
because they assume that no further substitution away  from asbestos will
occur.

    We could not  find  data on the percentage of disc and drum brakes made
using asbestos for vehicles manufactured between 1982  and 1986.  However, we
know that 1982 was the first  year that non-asbestos disc and  drum brakes were
used (IGF 1987).  Therefore,  we have assumed a  linear  decline in asbestos
brake composition from 100 percent in  1981 to the known 1986  levels.  Thus,

                                    A.1-28

-------
                                      Table A.1,3-1  Disc Brake as A Percentage of Total Brakes
                                                      for Modal Years 1963-2000 Cars
Mode 1 Yea r
1963
1961
1965
1966
1967
1968
1969
19TO
1971
1972
1973
1971
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986-2000
Percentage
or Domestic
Domestic Cars with front
Car Safes Disc Brakes Only
»
#
*
*
#
N
*
*
tt
#
»
*
6,789,707
8,391,811
H
9,239,287
9,500,893
6,957,191
7,086,129
5,585,01*1
6, 156,861
8,621,712
8,172,599
-»
0.0%
0.0%
0.0%
1.0%
6.1%
12.7%
27.8%
11.0%
63.1%
73.6%
85.7%
81.1%
92.6%
98.8%
96.8%
96.8%
96.9%
97.1%
97.8%
98.6%
97.0%
97.0%
97.3%
N/A
Percentage of Percentage
Domestic Cars of Imported
with Front and Imported Cars with front
Rear Disc Brakes Car Sales Disc Brakes Only
0.0%
0.0%
0.0%
0.0%
0.0%
o.oj
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
3 . 2%
3.2%
3.1%
2.9%
2.2%
1.1%
3.0%
3.0%
2.7%
N/A
•tt
#
*
#
*
#
»
*
*
*
*
*
1,662,278
1,687,715
*
1,976,516
2,301,331
2,362,727
2,211,768
2, 191,937
2,305,512
1,878,169
2,176,586
#
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
91.5%
90.8%
N/A
90.1%
87.7%
81.5%
80.3%
80.7%
79.1%
67.1%
79.1%
N/A
Percentage
of Imported Cars
wi th Front and
RTea r Disc Brakes
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0.0%
0.0%
N/A
9.9%
12.3%
15.5%
19.7%
19.3%
20.9%
32.9%
20.9%
N/A
Oi sc Brakes
ass
Percentage
of Totnl
Car Brakes
0.0%
0.0%
0.0%
2.0%
3.1%
6.1%
1 3 . 9%
20,5%
31.6%
36.8%
12.9%
12.1%
16.5%
18.7%
5J.6%
52.2%
52.1%
53,0%
53.2%
53.2%
53.9%
51.2%
53.1%
53.1%
*  Not  appIicable.
N/A = Not available.
Source:   Ward's Automotive Yearbook (1976-1986),  see text  for explanation.

-------
Table A.1.3-2,
 Disc Brakes as a Percentage of Total Brakes
  for Model  Years  1955-2000  Trucks
Model Year
Percentage of Domestic
  Trucks with Front
     Disc Brakes
 Disc Brakes as a
  Percentage of
Total Truck Brakes
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986-2000
Source: Ward's
0,0%
0,0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
'0.0%
0.0%
0.0%
4.0%
6.1%
12.6%
27.8%
63.1%
73.6%
85.7%
84.1%
92.6%
98.8%
97.8%
99 . 2%
99.9%
100 . 0%
100 . 0%
100 . 0%
100.0%
100.0%
100 . 0%
100.0%
100.0%
Automotive Yearbook
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2.0%
3.1%
6.3%
13.9%
31.6%
36,8%
42.9%
42.1%
46.3%
49.4%
48.9%
49.6%
50.0%
50.0%
50.0%
50.0%
50,0%
50.0%
50.0%
50.0%
50.0%
(1977-1986), see text
         for explanation.
                          A.1-30

-------
 asbestos disc brake composition declines linearly from 100 percent in 1981 to
 15 percent in 1986 (17 percent each year),  and asbestos drum brake composition
 declines linearly from 100 percent In 1981 to 92.5 percent In 1986 (1.5
 percent each year).'  Table A.1.3-3 and Table A.1.3-4 present a summary of the
 type and composition of existing and future brake systems on the wheels of
 cars and light trucks.

     One further assumption we made related to the type and composition of
 brakes is that brakes used for replacement would be of the same type as those
 placed originally on the vehicle. ' For instance, if a car was originally
 produced with an asbestos disc brake pad, we will assume that it will be
 replaced by an asbestos disc brake pad, even though it may be possible to
 replace an asbestos disc brake pad with a non-asbestos disc brake pad.  This
 assumption has been made after having detailed discussions with automobile
 manufacturers who recommend this practice for safety reasons.   See Appendix F
 to this RIA.   They claim that replacing asbestos disc brake pads with
 non-asbestos disc brake pads Involves redesigning the whole brake system, and
 a simple exchange of one pad for another may cause safety hazards.
 Furthermore,  the American Society of Mechanical Engineers (ASME) concluded
 that use of asbestos-free materials as direct substitutes in vehicles designed
 for asbestos-based linings ma$r be restricted for the following reasons:  (1)
 braking balance between front and rear breaks may be adversely affected; (2)
 parking brake capacity may be reduced; and (3) no meaningful brake lining
 effectiveness ratings exist (ASME 1987).   It should be noted that this
 assumption is probably also a conservative  one and will cause us to
 overestimate the sale of asbestos brakes if asbestos brakes are actually
 replaced with non-asbestos brakes,

              3.3,3  Average Lifeof Brakes

              The rate at which vehicles in operation have their brakes
 replaced is a key assumption having a direct bearing on replacement brake
 sales.  The rate of replacement installation for a given collection of
 vehicles is influenced by (1) the number of miles an average vehicle is
 driven, (2) the age of existing brake systems, and (3) the useful life of
 brake linings.   The useful life of brake linings, in turn, depends on the
 weight and other characteristics of the vehicle, the driving habits of the
-operator,  and the location of vehicle operation (city/highway).  A detailed
 study of the influence of each one of the listed variables on replacement
 sales should be done to determine the size  of the brake replacement market.
 Such a study,  however,  is outside the scope of the present assignment.  For
 the purpose of this forecast the average number of miles that brakes are
 expected to last is estimated and then divided by the number of miles an
 average vehicle is expected to be driven in a year.  This computes the average
 useful life for the brakes on a given collection of vehicles.

     The U.S.  Department of Transportation (DOT) estimated annual average miles
 travelled per passenger car to the year 2000 to be 10.5 thousand miles (DOT
 1976).  This  is a dated forecast, so we decided to review more recent data
 which are presented in Table A.1.3-5.  An average car was driven 9,809 miles
 in 1984 while an average light truck was driven 9,974 miles.  For forecasting
                                    A.1-31

-------
Table A.1.3-3.
Type and Composition of Brake Systems on the
Wheels of Passenger Cars, by Model Year
                (percent)

Year
1954-1965
1966 '
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984 .
1985
1986-2000
Sources :
Asbestos
Drum
100.0
98.0
96.9
93.6
86.1
79.5
68.4
63.2
57.1
57.9
53.5
51.3
48.4
47.8
47.6
47.0
46.8
46.1
44.7
43.7
43.8
43.1
Non- Asbestos
Drum
0.0
0,0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.7
1.4
2.1
2.8
3.5
Ward's Automotive Yearbook
Total Asbestos
Drum
100.0
98.0
96.9
93.6
86.1
79.5
68.4
63.2
57.1
57.9
53.5
51.3
48.4
47.8
47.6
47.0
46.8
46.8
46.1
45.8
46.6
46.6
(1976-1986)
Disc
0.0
2.0
3.1
6.4
13.9
20.5
31.6
36.8
42.9
42.1
46.5
48.7
51.6
52.2
52.4
53.0
53.2
44.1
35.6
26.6
17.1
8.0
and IGF,
Non- Asbestos
Disc
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
"9.1
18.3
27.6
36.3
45.4
see text for
Total
Disc
0.0
2.0
3.1
6.4
13.9
20.5
31.6
36.8
42.9
42.1
46.5
48.7
51.6
52.2
52.4
53.0
53.2
53.2
53.9
54.2
53.4
53.4

 explanation.
                          A.1-32

-------
Table A.1.3-4,
Type and Composition of Brake Systems on the
Wheels of Light Trucks, by Model Year
                (percent)

Year
1954-1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986-2000
Sources :
Asbestos
Drum
100.0
98.0
96.9
93.7
86.1
68.4
63.2
57.1
57.9
53.7
50.6
51.1
50.4
50.0
50.0
50.0
50.0
49,3
48.5
47.8
47.0
46.3
Non-Asbestos
Drum
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.7
1.5
2.2
3.0
3.7
Ward's Automotive Yearbook
Total Asbestos
Drum
100.0
98.0
96.9
93.7
86.1
68.4
63.2
57.1
57.9
53.7
50.6
51.1
50.4
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
(1977-1986)
Disc
0.0
2.0
3.1
6.3
13.9
31.6
36.8
42.9
42.1
46.3
49.4
48.9
49.6
50.0
50.0
50.0
50.0
41.5
33.0
24.5
16.0
7.5
and ICF,
Non-Asbestos
Disc
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
8.5
17.0
25.5
34.0
42.5
see text for
Total
Disc
0.0
2.0
3.1,
6.3
13.9
31.6
36.8
42.9
42.1
46.3
4S-.4
48.9
49.6
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0

 explanation.
                          A.1-33

-------
     Table A.1.3-5.  Average Annual Miles Travelled
              Passenger Cars           Single Unit Trucks
Year              (miles)                    (miles)
1965
1970
1975'
1980
1982
1983
1984
9,387
9,978
9,634
9,135
9,533
9,654
9,809
10,003
9,807
8,882a
10,070
9,805
9,704
9,974
According to the source for this data series, this
entry is not comparable to previous years for reasons
not explained in the source.

Source:  Motor Vehicle Manufacturers Association,
         Motor Vehicle. Fa_cts andFigures  '86. 1986,
         p. 52.
                        A.1-34

-------
 purposes,  we have used a figure of 10,000 miles for the average number of
 miles a car or light truck is driven each year,^

     Reliable brake life data are not readily available.  In part,  this is
 because data on brake replacement are expensive to collect primarily because
 replacement occurs in service stations,  independent repair shops,  self-service
 fleet shops,  and new car and truck dealerships throughout the country.   In
 December 1980,  DOT reported that front brake drum linings and/or disc pads
 would be replaced every 30-35 thousand miles and rear brake drum linings
 and/or disc pads would be replaced every 45-50 thousand miles (DOT,  1980).4
 These data are consistent with the opinions of industry experts who  estimate
 that brakes last between 30,000 and 50,000 miles with 40,000 being average
 (IGF 1986),   Thus,  on average all four brakes have been assumed to be replaced
 every 40,000 miles.   Combining this with the assumption of 10,000  miles driven
 per year on average,  we have concluded that all brake linings (or  pads) are
 replaced every four years.

              3.3.4  Survival Probabilities

              Table A.1,3-6  presents the  survival probabilities for passenger
 cars and light trucks that  were used to  make the forecasts (Wharton
 Econometrics  1983).   Sixty-eight percent of all cars manufactured  10 years ago
 are in operation today,  while 78 percent of all light trucks manufactured 10
 years  ago  are in operation  today.   Cars  are not expected to survive  in
 significant numbers  for more than 21 years while trucks are not expected to
 survive in significant numbers for more  than 30 years.   These survival
 probabilities are  assumed to apply to both the current stock of outstanding
 cars•and to all  future cars.

              3.3.5   Outstanding Stock of Light Vehicles

             .The data on the outstanding stock of light vehicles (cars  and
 trucks), by model year,  as ..of 1985  were  obtained from two sources.   The data
 for cars produced  after 1970 and the data for trucks produced after  1969 were
 obtained from R.L. Polk & Co.   Because this source  did not provide
 disaggregated data  for earlier years,  we estimated  the outstanding stock of
 earlier model years by multiplying  the vehicles produced in those years by the
 appropriate survival  probabilities.   The data used  are presented in  Table
A. 1.3-7.   Because  cars  are assumed  not to survive in significant quantities
 after  21 years,  the first car model year we have presented is  1964.   Because
     •3
       It is important to note that the miles-driven assumptions have to be
chosen so that the brake like is an integer number of years for the
forecasting model as discussed below.

     4 DOT cited the 1975 Hunter Job Service Analysis which reported 35
million axle sets (1 axle set contains 4 pads or linings) of replacement sales
in 1976.  This figure was adjusted to 50 million in order to account for
facilities that are not covered by the Hunter survey.  This figure corresponds
to five axle sets being replaced for every 100,000 miles.  It is not clear
whether this data included truck brakes, but we have assumed that truck brakes
and car brakes have the same expected life, because we could not obtain
separate data.
                                    A.1-35

-------
Table A.1.3-6.
Cumulative Survival Probabilities for
Passenger Cars and Light Trucks
             (percent)
Vehicle
Age
1
2
3
4
• 5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Cars
99.8
99.5
98.8
97.7
95.9
93.3
89.5
83.9
77.1
68.1
56.6
45.1
34.9
26.5
20.0
14.9
11.2
8.4
6.2
4.4
3.1
0.0









Light Trucks
99.6
98.9
97.8
96.6
95.0
93.0
90.5
87.2
82.9
77.7
71.9
65.2
58.2
51.4
44.8
38.5
32.5
27.1
22.1
17.8
14,1
11.1
8.6
6.5
4.9
3.7
2.7
2.0
1.5
1.1
0.0
  Source:   Wharton Econometric Forecasting
           Associates,  1983.
                       A.1-36

-------
Table A.1.3-7.
Light Vehicles Outstanding In 1985 By Model Year
               (in thousands)
    Model Year
         Passenger  Cars
Light Trucks
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976 -
1977
1978
1979
1980
1981
1982
1983
1984
1985
Total
0
0
0
0
0
0
0
0
0
0
251
411
560
700
1,081
1,428
2,154
2,534
3,713
4,883
5,196
4,836
7,195
8,735
9,503
9,602
8 , 502
8,039
7,322
7,716
10,401
11 . 042
115 , 804
0
11
14
18
21
36
47
61
95
141
196
276
362
419
595
1,005
1,105
1,105
1,603
1,952
2,050
1,677
2,437
3,059
3,429
3,669
2,088
2,075
2,181
2,495
3,819
4.682
'- 42 , 723
    Sources:  Cars after  1969  and Trucks  after 1970 --
              R.L. Polk & Co,  published in MotorVehicle
              Factsi::l&::i:Figures  f86t pps,  26-7,

              Cars before 1969 and Trucks before 1970 --
              Derived by  IGF using Motor  Vehicle
              Manufacturers Association,  Moitpriiiyehicle
              Facts &.JFigur.es  '86. 1986,  p. 7  and survival
              probabilities provided by Wharton Econometric
              Forecasting Associates,  1983 (as explained in
              text).

                             A.1-37

-------
 cars  are  assumed not to survive in significant quantities after 21 years,  the
 first car model  year we have presented in 1964,   Because trucks are assumed
 not to survive  in significant quantities after 30 years, the first truck model
 year  presented  is 1955.

              3.3.6  Future,,Sales of ...Light Vehicles

              Forecasting consumer behavior is  always difficult.  Vehicle sales
 are subject  to  large year-to-year fluctuations.   This point is illustrated by
 Table A.1.3-8 which presents new car and light truck sales and percentage
 changes in these sales.  In  addition,  new car  sales  are  influenced strongly by
 factors that are difficult to predict -- business cycles,  energy prices, and
 the prices of alternative transportation such  as  used cars or public transit.
 We  have used DRI's 1986 forecasts for new car  and light  truck sales and have
 relied on them  to have  taken most of the relevant factors into account  in
 making their forecasts.  These data are  presented in Table A.l.3-9.5

    A summary of all the major assumptions and data  inputs for this analysis
 is  provided  in Table A.1.3-10.

        3-4   Results

        Table A,1.3-11  presents the forecasts  for asbestos disc brake pads and
 for total disc brake pads for both cars  and light trucks.   Notice that  sales
 of  total  disc brake  pads  are increasing  while  sales  of asbestos disc brake
 pads  are  decreasing.  Total  disc brake pad sales  are increasing for a number
 of  reasons.   First of all, disc brakes will claim a  larger share of the total
 stock of  brakes  as we move into the future,  This will occur because older
 vehicles  which had drum brakes  on both axles or only the rear axle will be
 scrapped  and replaced with vehicles that have  disc brakes  on the front  axle or
 on  both axles.   Second,  the  total stock  of brakes will increase as we move
 into  the  future.   This  will  occur because the  number of  new vehicles solid
 exceeds the  number of vehicles  scrapped.   These two  factors will both cause
 replacement  sales  of total disc brakes to increase.   Finally,  new vehicle
 sales  are forecast to be  cyclical with a rising trend.   As a result,  new total
 disc brakes  will  increase over  time.   The net  result of  these three effects is
 an  increase  in sales  of total disc brakes.   It is important to note that the
 cyclical  nature  of- the-car -and  truck industries-may  result in some years in
 which  there  is actually a decline in forecasted sales, even though the  trend
 is  clearly positive.

    Asbestos  disc brake pad  sales are  decreasing  despite the  facts  that the
 stock  of vehicles  is  growing and that  new car  sales  are  increasing.   This
 occurs because the stock  of  asbestos disc  brakes  is  decreasing.   Cars with
 asbestos  disc brakes  are  being  scrapped  and replaced with  cars with
 semi-metallic disc brakes.   Because we assume  that only  15 percent  of new  disc
brakes contain asbestos,  this effect dominates the other two  and the  net
 effect is a  decline  in  asbestos  disc brake  sales.  Figure  A.1.3-1  graphically
       It should be noted that we examined forecasts of light vehicle sales
made by General Motors and concluded that they were not significantly
different from the Data Resource's Inc. forecasts.  The General Motors
forecasts are confidential business information (CBI).

                                   A.1-38

-------
Table A.1,3-8.
New Car and Light Truck Sales, 1970-1985
            (in  thousands)
Percent Change

Year
1985
1984
1983
1982
1981
1980
1979
1978
1977
1976
1975
1974
1973
1972
1971
1970
Source :

Passenger
Cars
11,042
10,391
9,182
7,982
8,536
8,979
10,673
11,314
11,183
10,110
8,624
8,853
11,424
10 , 940
10,242
8,400
From
Previous Year
6.3
13.2
15.0
-6.5
-4.9
-15.9
-5.7
1.2
10,6
17.2
-2.6
-22.5
4.4
6.8
21.9
-
Motor Vehicle Manufacturers
Facts and
Figures '86, 1986.
Light
Trucks
4,682
4,093
3,129
2,560
2,260
2,48?
3,480
4,109
3,675
3,181
2,478
2,688
3,148
2,629
2,096
1,811
Association,
p, 7.
Percent Change
From
Previous Year
14,4
30.1
22.2
13.3
-9.1
-28.5
-15.3
11.8
15.5
28.4
-7.8
-14.6
19.7
25.4
15.7
-
Motor, 	 Vehic le

                         A.1-39

-------
Table A,1.3-9.  Annual Sales Forecasts for Passenger
                Cars  and  Light  Trucks (in thousands)
Year
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Source :
Passenger Cars
10 , 900
11 , 300
11 , 300
11,100
11,300
11,500
11 , 700
11,900
12,100
12,300
12,300
12 , 200
12 , 200
12,300
12,400
Data Resources, Inc.. U.S.
Light Trucks
4,510
4,660
4,750
4,630
4,650
4,680
4,770
4,910
5,040
5,180
5,250
5,270
5,330
5,410
5,520
Long-Tenn Review
     (Spring 1986).
                       A.1-40

-------
           Table A.1.3-10.  Summary of Assumptions and Data Inputs
       Assumption/Data Input
               Description
Type of Brake System
Composition of Brake System
Average Life of Brakes
Survival Probabilities
Outstanding Stock of Light Vehicles
Future Sales of Light Vehicles
Type of brake system is derived from
data in Ward's Automotive Yearbook
(1976-1986); it is assumed that 53.4
percent of new car brakes will be disc
and 46.6 percent will be drum; and it
is assumed that 50 percent of new truck
brakes will be disc and 50 percent will
be drum,

Composition of brake system is based on
transcribed telephone conversations
with industry experts; it is assumed
that 15 percent of all new disc brakes
will contain asbestos; and it is
assumed that 92.5 percent of all new
drum brakes will contain asbestos.

Disc and drum brakes on both cars and
light trucks are assumed to have an
average life of 4 years based on a 1980
DOT report and transcribed telephone
conversations with industry experts.

Survival probabilities for cars and
light trucks are based on a 1983
Wharton Econometrics report.

The outstanding stock of cars and light
trucks is based on data from R.L. Polk
& Co.

Future sales of cars and light trucks
is based on forecasts published by Data
Resources, Inc.
                                   A.1-41

-------
   Table A.1.3-11.   Sales Forecast of Total Disc Brake Pads and
 Asbestos Disc Brake Pads, 1986-2000, for A Four Year Brake Life
                          (in thousands)
Year
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Total
Light
Total
Disc Pads
47 , 741
46,901
45,228
45,316
56,157
55,098
55,050
55,580
64,059
62,926
64,472
66,369
72,082
70,345
73.351
880,673
Trucks
Asbestos
Disc Pads
32,407
31,057
29,078
29,540
26,725
25,717
23,945
23,782
20,619
19,941
18,991
18,801
16,218
15,698
15.588
348 , 104
Passenger
Total
Disc Pads
126,319
121,759
122,407
116,936
136,703
132,532
136,634
133,235
148,561
144 , 704
152,570
155,924
160,638
154,975
164.451
2,108,350
Cars
Asbestos
Disc Pads
86,739
80,726
81 , 374
76,630
60,995
56,495
56,239
51,008
39,224
36,665
37,369
35,218
29,113
27,670
28.836
784,302
Detail may not add to totals due to rounding.

Source:  ICF, see text.
                              A.1-42

-------
                                  Figure A.1,3-1
1 70 -i


160 -


ISO -;


140 -


I30 H
     I;

120 -j


1 1 0


100 -


 90 -


 80 -


 70 -


' GO


 50 ~-


 40


 30


 20 -I
   Q-,
                                                  £r—--,-
0
 1986  1987  1988  1989  1990  1991  1992  1993  1994  1995  1996  1997  1998  1999  2000
    D
            ASB. DISC PADS
TOTAL DISC PADS

-------
presents  the  results  for  cars  while  Figure A.1.3-2  graphically presents the
results for trucks.

    Table A. 1.3-12 presents  forecasts  for asbestos  drum brake linings and for
total drum brake  linings  for both  cars and light trucks.  Two general points
are worth noting.  First,  sales  of asbestos drum brake linings closely mirror
sales of  total brake  linings.  This  occurs because  more than 92.5 percent of
all drum  brakes sold  in any  year are asbestos.  Second, the difference between
asbestos  drum brakes  and  total drum  brakes is growing over time.  This is a
direct result of  the  assumptions which underlie these forecasts.  In any given
year, 92.5 percent of all new  drum brakes are asbestos, and between 92.5
percent and 100 percent of all replacement brakes are asbestos,  fhe exact
percentage of replacement drum brakes  that is asbestos is a function of the
stock of  drum brakes.  It starts out being exactly  100 percent in 1986 and
approaches 92.5 percent over time.   (It would reach exactly 92.5 percent in
trucks in 2017 (1986  -f 31) and in  cars in 2008 (1986 -f- 22).)

    It is also important  to  note that  the behavior  of asbestos drum brake
sales in  cars and in  trucks  differs.  The basic underlying trends are the
same, but some number differ in'  magnitude, and this causes the net effects to
diverge.  First of all, the  percentage of drum brakes that are asbestos in
declining for both types  of  vehicles.  Second, the  stock of asbestos drum
brakes is declining for cars but incteasing for trucks.  The share of asbestos
drum brakes to total  brakes  is declining for both vehicles.  However, the
stock of  total truck  brakes  is growing so fast that the net effect is an
increase  in replacement asbestos drum brakes sales.  The stock of total truck
brakes is growing fast because new truck sales greatly outnumber truck
scrappage.  Because the stock  of total car brakes is growing more slowly, the
net effect is that replacement asbestos drum brake  sales do not change much.
The same  arguments apply  to  the  new  vehicle market.  Because truck sales grow
faster than car sales, new asbestos  drum brakes in  trucks increase faster than
new asbestos  drum brakes  in  cars.  The net result of all these effects is that
sales of  asbestos drum brakes  in trucks increase while sales of asbestos drum
brakes in cars fluctuate  but remain  fairly constant.  Figure A.1.3-3
graphically presents  the  results for trucks while Figure A.1.3-4 graphically
presents  the results  for  cars.   Two  points are worth noting.  First, sales of
asbestos  drum brake linings  closely  mirror sales of total brake linings.  This
occurs because more than  92.5  percent of all drum brakes are asbestos in any
year.  Second, the difference  between asbestos drum brakes and total drum
brakes is growing over time.   This makes sense when we consider the
assumptions which underlie these forecasts.  In any given year, 92.5 percent
of all new drum brakes are asbestos, and between 92.5 percent and 100 percent
of all replacement brakes  are  asbestos.  The percentage of replacement drum
brakes that is asbestos is a function of the stock  of drum brakes.  It starts
out being almost  100  percent and approaches 92.5 percent over time.  (It would
reach exactly 92.5 percent in  trucks in 2017 (1986  + 31) and in cars in 2008
(1986 + 22).  Figure  A.1,3-3 graphically presents the results for trucks while
Figure A. 1.3-4 graphically presents  the results for cars.

    Table A.1.3-13 presents  the  forecasts for asbestos brake sales in four
categories; light truck asbestos drum brake sales,  light truck asbestos disc
brake sales, passenger car asbestos  drum brake sales, and passenger car
asbestos  disc brake sales.   The  following points summarize the major findings
already discussed;
                                    A.1-44

-------
                              A.1.3-2
                           E
3 A n c
RUC
                                                              .&-
                                                                  -er'
                              -A—-
D    TOTAL DISC PADS
        A    ASB- DISC PADS

-------
  Table A.1,3-12.   Sales Forecast  of  Total  Drum Brake  Linings  and
    Asbestos Drum Brake Linings, 1986-2000,  Four Year Brake Life
                           (in thousands)
 Year
  Total
                 ....Likht Trucks
                                    PassenEer Cars
   Total
Drum Linings
  Asbestos
Drum Linings
   Total
Drum Linings
  Asbestos
Drum Linings
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
61,045
58 , 644
60,624
61,244
62,466
61,071
63,912
66,500
66,755
65,874
69,478
73,425
73,064
71,652
75.881
59,692
57,246
59,199
59,852
59,869
58,478
61,167
63,695
62,923
62,081
65,465
69,228
68,135
66,830
70.785
137,762
130,125
136,771
134,742
131,113
128,290
138,005
139,147
133,824
131,710
142,139
147,593
141,316
136,901
146.380
134,714
126,965
133,612
131,639
125,283
122,435
131,815
132,815
125,405
123,391
133,269
138,298
131,189
127,098
135.938
  991,636
  944,645
 2,055,818
 1,953,867
Detail may not add to total due to rounding.

Source;  ICF, see text.
                              A.1-46

-------
                                    Flgurs A.l.3~3
                 )  -.'11
                 >   K /
o -   ..— — T — ....... -,
  fj86   1987  1988
                                    :, I'uPLCASI
                                                      -A-
                                                             •A"
                                                                         .B--
                                                                         . A—
                              -r- -------- 1 ..... ------ 1 -------- ..... -j ------------- 1 ............ --'i      r" ..... ~""r '  ' ~T ...... T
                              990  1 99 1   1992  1993  1 99^1  199^  1996  1997   1998  1999  2000
H     h if Al.  [j(JHM  I Hill !
-------
                                 Figure A,1,3-4
          ~F~
                 CHUM  BRAKE  	N N
                             SALES FORECAST,  1 986--2000
                'T
"T
                                                T"
                           T		r
                                                       i    —}—
;987  1988  1989  1990' 1991  1992  1993  1994  1995 1996  1997  1998 1999  2000
r:.i    TOTAL DRUM LIMINGS
                         ASB, DRUM LININGS

-------
    Table A.1.3-13.   Sales Forecast of Asbestos Drum Brake Linings  and
        Asbestos Disc Brakes Pads,  1986-2000,  Four Year Brake Life
                              (in thousands)
Year
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Total
Light
Drua
59,692
57,246
59,199
59,852
59,869
58,478
61,167
63,695
62,923
62,081
65,465
69,228
68,135
66,830
70.785
944/645
Trucks
Disc
32,407
31,057
29,078
29,540
26,725
25,717
23,945
23,782
20,619
19 , 941
18,991
18,801
16,218
15,698
15.588
348 , 104
Passenger
Drum
134,714
126,965
133,612
131,639
125,283
• 122,435
131,815
132,815
125,405
123,391
133,269
138,298
131,189
127,098
135.938
1,953,867
Cars
Disc
86,739
80,726
81,374
76,630
60,995
56,495
56,239
51,008
39,224
36,665
37,369
35,218
29,113
27,670
28.836
784,302
Total
Drum
194,406
184,211
192,811
191,491
185,152
180,914
192,982
196,510
188,327
185,473
198,733
207,526
199,324
193,928
206.723
2,898,512 1,

Disc
119,146
111,783
110,452
106,170
87,719
82,211
80,184
74,790
59,843
56,606
56,360
54,019
45,331
43,368
44.425
132,406
Detail may not add to total due to rounding.

Source:  ICF, see text.
                                  A.1-49

-------
         •  future asbestos drum brake sales In trucks are cyclical,
            but rising;.

         •  although total future disc brake sales in trucks increase,
            asbestos disc brake sales IB trucks decline;

         •  future asbestos drum brake sales in cars are  cyclical with
            no discernible upward or downward trend; and

         *  although total future disc brake sales in cars increase,
            asbestos disc brake sales in cars decline over time.

    A more  detailed understanding of the factors driving the market  can be
obtained by looking at a breakdown of brake sales into new brakes and
replacement brakes.   These results are presented in Tables A.1.3-14  through
A.1.3-17 and in Figures A.1.3-5 through A.1.3-8.

    Table A.1.3-14 presents the results for asbestos drum brake  sales  in
trucks.   We can see that new sales cycle with a slight upward trend  and
replacement sales rise slightly.   This occurs because new brake  sales  closely
mirror new  truck sales,  and the stock of existing trucks grows slightly over
tine.  The  breakdown is shown graphically in Figure A.1,3-5.

    It is worth noting that replacement sales of asbestos drum brakes  drop
significantly in 1987,   The major reason for this drop is that asbestos drum
brakes in model year 1971 and 1975 trucks are noticeably fewer than  asbestos
drum  brakes in model year 1970 and 1974 trucks (see Attachment B-2).   Because
the model assumes that all 1971 and 1975 brakes will be  replaced in  1987 and
that  all 1970 and 1974 brakes will be replaced in 1986,  there is a significant
decline  in  1987 forecasted replacement sales relative to 1986.   The  effects of
these two model years can be observed In 1991,  1995,  and 1999, although it is
less  pronounced as fewer of these vehicles  continue to survive.

    Table A,1.3-15 presents the results for asbestos disc brake  sales  in
trucks.   We can see that new sales cycle with a. slight upward trend  while
replacement sales decline dramatically.   This decline occurs  because the
existing trucks with asbestos disc brakes are being scrapped and replaced with
trucks with non-asbestos disc brakes.   Thus,  the stock of asbestos disc brakes
in trucks is  declining across time.   Once again new brake sales  closely follow
new truck sales.   The breakdown is shown graphically in  Figure A. 1.3-6.

    It is worth noting that replacement sales of asbestos disc brakes  decline
noticeably  in 1990,  1994, -and 1998.   The major reason for this decline is that
we assume all truck  brake are replaced every fourth year.   Thus,  in  1990, we
are replacing brakes  on 1966,  1970,  1974,  1978,  1982,  and 1986 model year
trucks.   The  two most recent model years (1982  and 1986)  are  assumed to have a
lower percentage of  asbestos disc brakes (substitution starts  in 1982).  In
1989, we  replace  brakes  on  1965,  1969,  1973,  1977,  1982,  and  1985.   Only the
1985  trucks are assumed  to  have  a lower percentage  of asbestos disc brakes.
The fact  that two  model  years  in  the  1990 replacement group have a reduced
asbestos percentage  while only one model year in the  1989 replacement  group
has a reduced asbestos percentage accounts  for this  significant  decline.  The
same event  occurs  in 1994.   The only  difference  is  that  three model years in
the replacement group (1982,  1986,  and 1990)  have  a lower asbestos percentage
and only  two  model years  in the  1993  replacement group (1983  and 1987)  have a

                                    A.1-50

-------
Table A.1.3-14.  Asbestos Drum Brake Linings  for  Light Trucks
                  Sales Forecasts, 1986-2000 (in thousands)
Year
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Total
Total Sales
59,692
57,246
59,199
59,852
59,869
58,478
61,167
63,695
62,923
62,081
65,465
69,228
68,135
66,830
70.785
944,645
New Sales
16,687
17 , 242
17,575
17,168
15,910
15,318
16,872
18,019
17,353
16,946
17,871
19,388
19,277
18,500
19.425
263,551
Replacement Sales
43,005
40,004
41,624
42,684
43,959
43,160
44,295
45,676
45,570
45,135
47,594
49,840
48,858
48,330
51.360
681,094
Detail may not add to total due to rounding.

Source;  IGF, see text.
                           A.1-51

-------
H
3
to
             en
                                                                               \  \
                                   Y//////
                                   \ / / /.,_/ //
                                                                                                            en
                                                                                                            en
                                                                                                            CO
                                                                                                            en
                                                                                                            cn
                                                                                                            cn
                                                                                                            CD
UD
cn
en
                                                                                                            cn
                                                                                                            cn
                                                                                                            K)
                                                                                                            CM
                                                                                                            cn
                                                                                                            cn
                                                                                                            cn
                                                                                                            cn
                                                                                                            oo
                                                                                                            cn
                                                                                                            CO
                                                                                                            CO
                                                                                                            03
                                                                                                            cn
                                                                                                                    in
                                                                                                                    LU
                                                                                                                    	i
                                                                                                                    <
                                                                                                                    cn
                                                                                                                     
-------
 Table A. 1.3-15.
Asbestos  Disc  Brake  Pads  for  Light  Trucks
Sales Forecast, 1986-2000 (in thousands)
Year .
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Total
Total Sales
34,407
31,057
29,078
29 , 540
26,725
25,717
23,945
23,782
20,619
19,941
18,991
18,801
16,218
15,698
15.588
348,104
New Sales
2,706
2,796
2,850
2,784
2,580
2,484
2,736
2,922
2,814
2,748
2,898
3,144
3,126
3,000
3.150
42,738
Replacement Sales
29,701
28,261
26,228
26,756
24,145
23,233
21,209
20,860
17,805
17,193
16,093
15,657
13,092
12,698
12.438
305 , 366
Detail may not add to total due to rounding.

Source:  IGF, see text.
                           A.1-53

-------
                              Figure A.1.3-6
fc



4
  -H
1986  1987
   -I--..




1 Q O O
! JULJ
                                                  TRUCKS
                                  \
                                  \ \
                                            V

                                                                       _,
                  989 1990 1991 1992 1993 1994 1995  1996  1997  1998 1999 2000
                                      REPLACEMENT SALES

-------
 lower  asbestos  percentage.   Finally,  this occurs again in 1998  for the  same
 reason.   This time  we have  four model years rather than three model years with
 a  lowered asbestos  content  in the replacement group.

    Table A.1.3-16  presents the results  for asbestos  drum brake sales In cars.
 We can see that new sales exhibit year fluctuations with an upward trend,
 while  replacement sales  exhibit yearly fluctuations with no upward or downward
 trend.  One might expect the replacement sales to show a slight decline since
 new cars  have fewer drum brakes than  older cars,  but  this is outweighed by the
 fact that the stock of outstanding cars  is rising as  we move further into the
 future.   New brake  sales again closely follow new car sales.  The  breakdown  is
 shown  graphically in Figure A. 1.3-7.

    A  close examination  of  Table A. 1.3-16 reveals an  interesting pattern.
 Asbestos  drum brake replacement sales decline in 1987,  1991,  1995,  and  1999,
 but they  increase in 1988,  1992,  1996, and 2000.   The primary reason for this
 drop is the asbestos drum brakes on 1971 and 1975 model year cars  are
 significantly fewer than asbestos drum brakes on 1970 and 1974  model year
 cars.  The primary  reason for this increase is that there are more asbestos
 drum brakes on  1976 and  1984 model year  cars than on  1975 and 1983 model year
 cars.  Once again,  we see that  a noticeable pattern repeats • itself every four
 years.                       *

    Table A.1.3-17  presents the results  for asbestos  disc brake sales in cars.
 We can see that new sales rise  while  replacement sales  decline  dramatically.
 This parallels  the  case  of  disc brake sales in trucks.   Cars with  asbestos
 disc brakes are being scrapped  and replaced with cars with non-asbestos disc
 brakes.   Thus, the  stock of asbestos  disc brakes  is declining across time.
 Once again new brake sales  closely follow new car sales.   The breakdown is
 shown  graphically in Figure A. 1.3-8.   It is worth noting that replacement
 asbestos  disc sales on cars decline significantly in  1990,  1994, and 1998.
 These  are  the same  years in which *& noticeable decline  in replacement asbestos
 disc sales  on trucks decline significantly,  and the reason is the  same.
 Specifically, the number of model years  in the replacement group which  have a
 lower  asbestos percentage increases relative to the previous  year.   The only
 difference between  cars  and trucks  is that the decline  in cars  is  steeper.
 This occurs because the  stock of total disc brakes for  cars  is  not growing as
 fast as the stock of total  disc brakes for trucks.  Detailed printouts  of all
 the results, by model  year,  are presented in Attachments  A-D.

        3,5  Sensitivity Analysis

        There are six  key assumptions and data inputs that have been used for
making the  forecasts.  The  assumptions pertain to:

        •   type of  brake systems  (disc versus drum brake  system) --we
           have assumed  a 55  percent/45  percent split for cars  and a
           50 percent/50 percent  split for trucks  in  1986 and the
           future years;

        •  composition of brakes  -- we have  assumed 15  percent  of  new
           disc brakes and  92.5 percent  of new drum brakes  to contain
           asbestos  throughout  the forecast period; and

        «  average  life  of  brakes-- we have  assumed a four year life.

                                    A.1-55

-------
      Table A.1.3-16.  Asbestos Brian Brake Linings for
          Passenger Cars Sales Forecast, 1986-2000
                       (IB thousands)
Year
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Total
Total Sales
134,714
126,965
133,612
131,639
125,283
122,435
131,815
132,815
125,405
123,391
133,269
138,298
131,189
127,098
135.938
1,953,867
New Sales
37,588
38,967
38,967
38,277
35,174
34,139
38,277
40,691
37,932
36,553
39,312
42,760
41,381
38,967
40.691
579,676
Replacement Sales
97,127
87,998
94,645
93,361
90,109
88,296
93,538
92,124
87,472
86,838
93,957
95,538
89,808
88,131
95.247
1,374,191
Detail may not add to total due to rounding,

Source:  ICF, see text.
                           A.1-56

-------
(£>
00
\   \
                                                                                    \
                                                                                                            O
                                                                                                            O
                                                                                                            O
                                                                                                            CM

                                                                                                            en
                                                                                                            en
                                                                                                            CO
                                                                                                            00

                                                                                                            en




                                                                                                            en
                                                                                                            CD
                                                                                                            en
                                                                                                            en
                                                                                                            en
                                                                                                            en
                                                                                                           en
                                                                                                           en
                                                                                                           en
                                                                                                           en
                                                                                                           CM
                                                                                                           en
                                                                                                           en
                                                                                                           en
                                                                                                           en
                                                                                                           O
                                                                                                           en
                                                                                                           en
                                                                                                           en
                                                                                                           GD
                                                                                                          • en
                                                                                                           03
                                                                                                           CO
                                                                                                           en
                                                                                                           C3D
                                                                                                           en
                                                                                                           CO
                                                                                                           en
LLJ

2
UJ
CJ
<
	I
Q.
UJ
cr
                                                                                                                     LU
                                                                        O
                                                                                            O        O

-------
       Table A.1.3-17.  Asbestos Disc Brake Pads for
          Passenger Cars Sales Forecast,  1986-2000
                       (in thousands)
Year
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Total
Total Sales
86,739
80,726
81,374
76,630
60,995
56,495
56,239
51,008
39,224
36,665
37,369
35,218
29,113
27,670
28.836
784,302
New Sales
6,985
7,241
7,241
7,113
6,536
6,344
7 , 113
7,561
7,049
6,792
7,305
7,946
7,690
7,241
7.561
107,718
Replacement Sales
79,755
73,485
74,133
69,517
54,459
50,151
49,126
43,446
32,175
29,872
30,064
27,272
21,424
20,429
21.275
676,584
Detail may not add to total due to rounding.

Source:  IGF, see text.
                          A.1-58

-------
            Figure A.1.3-8
1989 -1990  1991  1992 1993  1994  1995 1996  1997  1998 1999 2000

-------
     In this  section,  we present the impact of changing these key assumptions
 on the results of our forecasts.

     Tahle  A.1,3-18 presents the results for brake sales if we assume a five
 year brake life,  while Table A,1.3-19 presents the results for brake sales if
 we assume  a  three year brake life.   Obviously, a shorter brake life leads  to
 more sales in all categories.   For  example,  a one year decrease in brake life
 from 4 years  to 3 years increases the asbestos disc brake pad sales in light
 trucks in  1986 from approximately 31,163,000 to 37,987,000,   In addition,  a
 longer brake  life leads to fewer  sales in all categories,  for instance, a one
 year increase in brake life from  4  years to 5 years decreases the asbestos
 disc brake pads in light trucks in  1986 from 31,163,000 to 22,434,000.   The
 more subtle  changes occur in the  trends in each category.  As the brake life
 changes, different groups of model  years take on either more or less
 importance.   This is  particularly important for model years in which a large
 swing in vehicle  production or a  large decline in the percentage of brakes
 composed of  asbestos  took place.

     These  points  are  illustrated  in a number of instances.   For example, if we
 look at the  forecasted sales of drum brakes in light trucks assuming a five
 year brake life,  we see a large decline in 1990 and 1995.  The major reason
 for  this is  the steep decline  in  truck sales between 1979 and 1980.   In 1985,
 there were approximately 3.7 million outstanding 1979 trucks and only 2^1
 million outstanding 1980 trucks.  Because the brakes on all the 1979 trucks
 are  assumed  to be replaced in  1989  and 1994 and the brakes on all the 1980
 trucks are assumed to be replaced in 1990 and 1995 when the brake life is  five
 years,  there  is a large fall in forecasted sales for these particular years.

     The car market is characterized by more declines than the truck market.
 In particular,  we see declines in 1988,  1990,  1991,  1995,  1999,  and 2000 in
 drum Brake sales.   The decline is not always attributable to the same model
 years.  For instance,  the 1988 decline occurs  mainly because there are fewer
 1968  and 1973 model year cars  than  1967 and 1972 model year cars.   By 1993,
 these cars represent, a small fraction of the outstanding vehicles, and the
 decline does  not  recur.  .The 1991 decline is similar in that is does not recur
 in 1996.   The 1990 decline,  however,  does recur in 1995 and 2000 because in
 this  case  there are declines in 1990,  1980,  and 1975 model  year cars and their
 effects are able  to endure.

     This disc brake market will follow these declining patterns in general,'
 and  it will be augmented by the overriding decline expected as a result of the
 shift to non-asbestos disc brakes.   For example,  we see a large decline in
 forecasted disc brake sales between.1989 and 1990 in trucks.   Fart of this
 decline is attributable  to' the drop in truck sales between 1979 and 1980, and
part  is attributable  to  the drop  in asbestos disc brakes on 1985 trucks
 relative to 1984  trucks.   Because the  drum brake forecasts  are driven
primarily  by  the  stock of outstanding vehicles,  any year in which drum brake
 sales  are  forecasted  to  fall will correspond to a fall in disc brake sales.
 In some cases,  this fall will  be  large because of the compounded effects shift
 to non-asbestos brakes.

    The patterns  discussed for a  five  year brake  life can be seen when the
brake  life is  assumed to be three years,  but they are not always as  distinct
because more  model  years are replaced every  year.   For example,  the  fall in
 truck  sales between 1979 and 1980 manifests  itself in declining drum brake

                                    A.1-60

-------
          Table A.1,3-18,   Forecast of Drum and Disc Brakes Sales,
                      1986-2000, Five Year Brake Life
                               (In thousands)
Year
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
199?
1998
1999
2000
Total
Light
Drum
45,019
48,109
50,953
53,852
46,413
46,831
50,290
53 , 044
55,191
51,129
52,255
56 , 247
58,031
58,199
57.224
782,789
Trucks
Disc
22,686
24,948
25,635
27,433
20,036
18,022
19,082.
19,434
20,390
15,618
13,570
14,178
14,302
14,562
12,502
282,397
Passenger
Drum
108,471
109,360
109 , 244
113,715
104,556
102,460
106,530
108,802
110,298
104,311
105,893
113,766
114,702
110,726
108,768
1,631,602
Cars
Disc
70,226
68,300
66,368
64,067
52,671
45,226
42,093
40,122
38,715
32,021
26 , 749
26,894
26,262
25,106
23.199
648 , 019
Total
Drum
153,491
157,469
160,197
167,567
150,969
149,292
156,819
161,846
165,489
155,440
158 , 149
170,013
172,734
168,924
165.991
2,414,391

Disc
92,912
93,248
92,003
91,500
72,707
63,248
61,176
59,556
59,105
47,638
40,319
41,072
40,564
39,668
35,701
930,416
Detail may not add to total due to rounding.

Source;  ICF, see text.
                                   A.1-61

-------
           Table A.1.3-19,   Forecast of Drum and Disc Brakes Sales,
                       1986-2000,  Three Year Brake Life
                                (in thousands)
Year
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Total
. Light
Drum
73,611
74,230
78,929
74,856
75,585
78,961
77,440
80,066
81,991
81,071
84,541
87,102
86,867
89,000
91.778
1,216,027
Trucks
Disc
38,906
41,320
42,438
34,565
36,117
36,060
29,279
30,508
29,713
24,235
25,228
24,519
20,627
21,187
20.764
454,467
Passenger
Drum
169,982
172,000
170,161
164,195
165,988
162,928
163,409
168,342
163,275
164,265
170,410
169,622
169,835
172,050
173.499
2,519,960
Cars
Disc
116,312
114,773
105 , 540
91,451
89,287
78,429
66,662
65,447
56,507
47,937
47 , 843
43,275
38,599
38,498
36.730
1,037,290
Total
Drum
243,593
246,230
249,090
239,051
241,573
241,889
240,849
248,407
245,266
245,335
254,951
256,724
256,702
261,050
265.277
3,735,987 1

Disc
155,218
156,093
147,978
126,016
125,404
114,489
95 , 941
95,955
86,220
72,172
73,071
67,795
59,226
59,685
57.494
,492,757
Detail may not add to total due to rounding.

Source:  ICF, see text.
                                    A.1-62

-------
 forecasts  for  1988  and 1991,   However,  by 1994  many  other model years have
 become  Important  and an increase  in sales is  forecasted.  Thus, the three year
 brake life scenario reduces  the importance of any  one model year.

    Once again drum brake  sales closely mirror  the stock of vehicles.  Because
 both disc  brake forecasts  have a  downward trend, they always fall whenever
 forecasted drum brake sales  fall,  and they increase  only in years in which
 forecasted drum brake sales  also  increase.

    In  addition to  altering  the brake life, there  are two other assumptions
 that can be altered:   brake  type  and brake composition.  Changing either one
 of  these has very similar  effects because they  both  effectively alter future
 new and replacement asbestos brake sales.   Table A.1.3-20 compares the results
 of  assuming that  all new disc  brake pads are  asbestos-free by 1991 (the year
 ASME has concluded  industry  could replace asbestos in the OEM) or by 1989 with
 the current assumption that  fifteen percent of  all disc brakes continue to be
 made with  asbestos.   If asbestos  disc brake pads are replaced with
 semi-metallic  pads  on all  new  cars by 1991, the car  forecast is reduced by
 over 75 percent by  the year  2000,  if asbestos disc brake pads are replaced
 with semi-metallic  pads on all new cars by 1989, the car forecast is reduced
 by  almost  80 percent by the year  2000.   The same holds true for trucks, but
 the effect is  not quite as strong because the stock  of total truck disc brakes
 is  growing faster than the stock  of total car disc brakes.

    It  is  worth pointing out that noticeable  declines occur in 1990, 1994, and
 1998.   This decline occurs for the same reason  noted earlier.  The replacement
 group in these  years  includes  one more  set of model  year cars with a lower
 asbestos percentage than the replacement group  in  the preceding year.  Once
 again the  decline is  greater in cars than in  trucks  because the total stock of
 disc brakes  on cars is growing slower than the  stock of disc brakes on trucks.

    Finally, it is  worth pointing out that forecasts of disc brakes in light
 trucks  are  very similar to forecasts of disc  brakes  in cars by 2000 under the
moderate and high decline  scenarios.  This  may  appear surprising because
 annual  car sales  greatly exceed annual  truck  sales.  This result is occurring
because trucks  have a much longer life  than cars.  These two scenarios assume
 that asbestos  disc  brakes  on new  cars will  be phased out.  As a result, the
 sales of asbestos brakes will  come from older vehicles, and the stock of truck
with asbestos  disc  brakes  will eventually equal the  stock of cars with
 asbestos brakes because of their  longer life.

    Table A. 1.3-21  compares the results of assuming  that all new drum brake
 linings are asbestos-free  by (the year  ASME has concluded industry could
 replace asbestos  in the OEM) or by 1995 with  the current assumption that 92.5
percent of  all  drum brakes continue to  be made  with  asbestos.  If asbestos
 drum brake  linings  are replaced on all  new cars, the car forecast is reduced
by approximately  85 percent by the year 2000, and  as we continue to move out
 further in  time,  this  assumption  becomes  more significant because it affects a
 greater number  of vehicles.  Once  again,  the  same  holds true for trucks, but
 the effect  is not quite as strong. .

    The decline in  drum brake  forecasts is  not  as  significant as the disc
brake forecasts simply because fewer non-asbestos  drum brake are produced.
Once again,  it  is worth nothing that noticeable declines occur In 1990, 1994,
and 1998 for the  same  reason mentioned  earlier.  The replacement group in

                                    A.1-63

-------
         Table A.1.3-20.
              Asbestos Disc Brake Pad Sales Forecast
               Under Different Assumptions
                  (in thousands)
Year
Low Decline
Light
Cars Trucks
Moderate JDecline
Light
Cars Trucks
High Decline
Light
Cars Trucks
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
 86,739
 80,726
 81,374
 76,630
 60,995
 56,495
 56,239
 51,008
 39,224
 36,665
 37,369
 35,128
 29,113
 27,670
 28.836
32,407
31,057
29,078
29,540
26,725
25,717
23,945
23,782
20,619
19,941
18,991
18,801
16,218
15,698
15.588
86,739
79,278
78,478
72,362
55,766
48,736
46,297
39,277
27,067
22,459
20,685
16,304
10,150
 7,817
 6.864
32,407
30,497
27,938
27,870
24,661
22,693
20,107
19,246
15,811
14,306
12,456
11,378
 8,574
 7,512
 6.510
86,739
78,312
76,547
69,517
54,459
47,793
44,410
36,497
25,789
21,649
19,065
13,917
 9,053
 7,382
 5.993
32,407
30,125
27,178
26,756
24,145
22,333
19,373
18,171
15,312
13,981
11,793
10,407
 8,124
 7,269
 6.014
  Total
784,302   348,104
           618,278   281,964
                     597,123   273,386
Assumptions
Low Decline
Moderate Decline
High Decline
          15 percent of new vehicles are made with asbestos
          disc brake systems in 1986-2000.

          15 percent of 1986 vehicles are made with asbestos
          disc brake systems, 0 percent of vehicles made after
          1990 are made with asbestos disc brake systems.  (A
          linear decline is assumed in the intermediate years,)

          15 percent of 1986 vehicles are made with asbestos
          disc brake systems, 0 percent of vehicles made after
          1988 are made with asbestos disc brake systems.  (A
          linear decline is assumed in the intermediate years.)
Detail may not add to total due to rounding,.

Source:  IGF, see text.
                                  A.1-64

-------
         Table A.1.3-21.
    Asbestos Drum Brake Lining Sales Forecast
      Under Different Assumptions
         (in thousands)
Low Decline
Year
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Cars
134,714
126,965
133,612
131,639
125,283
122,435
131,815
132,815
125,405
123,391
133,269
138,298
131,189
127,098
135.938
Light
Trucks
59,692
57,246
59,199
59,852
59,869
58,478
61,167
63,695
62,923
62,081
65,465
69,228
68,135
66,830
70.785
Moderate
Cars
134,714
122,635
124,952
118,879
109 , 650
99,239
97,837
88,701
76,414
64,676
61,761
53,912
43,750
34,554
31.524
Decline
Light
Trucks
59,692
55,331
55,293
54,129
52,798
48,118
46,146
44,152
40,667
35,244
33,322
31,312
27,792
23,290
21.741
High Decline
Cars
134,714
119,172
118,025
108,672
97 , 144
80,682
78,309
69,686
59,981
46 , 946
43,483
36,514
29 , 140
20,261
17.695
Light
Trucks
59,692
53,798
52,169
49,551
47,141
39,829
37 , 504
35,725
33,274
27,331
25,165
23,452
20,996
16,355
14.800
  Total    1,953,867   944,645   1,263,200   629,028    1,060,424   536,783
Assumptions
Low Decline
Moderate Decline
High Decline
92.5 percent of new vehicles are made with asbestos
drum brake systems in 1986-2000.

92.5 percent of 1986 vehicles are made with asbestos
drum brake systems, 0 percent of vehicles made after
1994 are made with asbestos drum brake systems.  (A
linear decline is assumed in the intermediate years.)

92.5 percent of 1986 vehicles are made with asbestos
drum brake systems, 0 percent of vehicles made after
1990 are made with asbestos drum brake systems.  (A
linear decline is assumed in the intermediate years.)
Detail may not add to total due to rounding.

Source:  ICF, see text.
                                   A.1-65

-------
 these years  Includes  one  nore  set  of model year  cars  with a lower  asbestos
 percentage than  the replacement  group in the  preceding year.   The  decline is
 again greater  in cars because  the  stock of drum  brakes on cars is  growing
 slower than  the  stock of  drum  brakes  on trucks.

    Once again,  we notice the  effect  of the longer  service life of trucks as
 truck sales  approach  car  sales by  2000 in the high  decline scenario.  The
 effect is less noticeable because  drum brake  are assumed to be on  more
 vehicles than  disc brakes,  and they are assumed  to  be phased out later.
 Appendices F-M provide detailed  printout of the  results for the medium and
 high decline scenarios, by model year.

    Finally, we  looked at the  effect  of altering our  assumption about the type
 of brake system.  Table A.1.3-22 presents the results when we  assume that all
 light vehicles (cars  and  trucks) have 60 percent disc brake systems (instead
 of 55 percent  of cars and 50 percent  of trucks)  and 40 percent drum brake
 systems (instead of 45 percent of  cars  and 50 percent of trucks).  (This would
 be likely to occur as more  vehicles switched  to  all disc brake systems.)  As
 would be expected, the total sale  of  asbestos disc  brakes rises while the
 total sale of  asbestos drum brakes falls relative to  our base  case.  In
 addition, the  total number  of  asbestos  brakes falls because a  smaller
 percentage of  disc brakes contains asbestos.  It is also worth noting that the
 shift to disc brakes will not  cause an increase  in  sales of asbestos disc
 brakes because it is outweighed  by the  substitution away from  asbestos and
 toward seal-metallic  in disc brake applications.  The total sale of asbestos
 disc brake pads  in cars and trucks increases  from 1,162,415,000 to
 1,203,125,000 while the sale of  asbestos drum brake linings decreases from
 3,000,781,000  to  2,729,618,000.

    Table A.1.3-23 presents the  forecasts of  asbestos disc brakes  and asbestos
 drum brakes'  in both cars  and light trucks for the three ARGM scenarios, while
 Table A.1.3-24 presents the growth rates implied by these forecasts.  These
 forecasts and growth rates  are valid  when new (OEM) and replacement
 (Aftermarket) sales are considered together.  In order to simulate the two
 sub-markets  (new  and replacement sales)  independently,  the forecasts are also
made separately.   Tables  A.1.3-25-A.1.3-28  show  the forecast of sales of new  .
 and replacement brakes assuming  a  low,  moderate,  and  high decline  scenario
 respectively.  Table A.1.3-28 presents  the  growth rates  implied by these
 forecasts for new and replacement  brakes  separately.   The  ARCH will take the
 1985 production volumes determined from the IGF  survey for these asbestos
products and then multiply  them by the  growth rates to compute the baseline
production quantities.

        3.6  Conclusions

        This analysis leads to the following  conclusions:

        •  Annual sales of asbestos drum brake linings  for  both trucks
           and cars are forecasted to increase slightly.   The  total
           annual sale of asbestos drum brake linings will  increase
           from approximately 193,000,000 in  1986 to  202,000,000 in
           2000.
                                    A.1-66

-------
      Table A.1.3-22.   Sales Forecast of Asbestos Drum Brake Linings and
            Asbestos Disc Brake Pads,  Under Different Assumptions2
                                (in thousands)
 Year
            LightTrucks
                      JPassenger.	Cars..
Drum
Disc
Drum
Disc
                                           Total
Drum
  Total   840,380   361,629
                     1,788,957   789,677
Disc
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
59,692
53,798
55,684
56,418
56,687
52,083
54,397
56,774
56,378
52,726
55,566
58,875
58,152
54,936
58.213
31,163
30,971
29,482
30,494
26,532
26,372
24,941 .
25,060
21,363
21,285
20,553
20,531
17,721
17,559
17.605
133,424
121,446
128,093
126,217
119,041
112,208
121,002
121,756
114,083
108,860
117,774
122,063
115,318
109,976
117.698
83,473
78,461
80,357
75,074
59 , 543
56 , 144
56,802
51,682
39,913
38,152
39,422
37,508
31,319
30 , 180
31 . 646
193,115
175 , 244
183,777
182,636
175,728
164,292
175,399
178,530
170,461
161,586
173,340
180,938
173,470
164,912
175.910
114,635
109,433
109,839
105,568
86,515
82,515
81,743
76,742
61,276
59,437
59,975
58,039
49,040
47,739
49.251
                                   2,629,337   1,151,307
a Sixty percent of brakes produced after 1986 are disc and 40 percent are
  drum, as opposed to the baseline assumption of 55 percent disc and 45
  percent drum.

Detail may not add to total due to rounding.

Source:  ICF, see text.
                                    A.1-67

-------
Table A.1.3-23.  Sales Forecasts of Asbestos Drum Brake Linings
     and Asbestos Disc Brake Fads in Cars and Light Trucks
                         (in thousands)
Disc Brake Pads

1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Low
Decline
137,836
119 , 146
111,783
110,452
106,170
87,720
82,212
80 , 184
74,790
59,843
56 , 606
56,360
53,929
45,331
43,368
44,424
Medium
Decline
137,836
119 , 146
109,775
106,416
100,233
80,427
71,429
66,404
58,523
42,878
36,765
33,141
27,682
18,724
15,329
13,374
(IMV)
High
Decline
137,836
119 , 146
108,437
103,725
96,273
78,604
70,126
53,783
54,668
41,101
35,630
30,858
24,324
17,177
14,651
12 , 007
Drum Brake Linings (IMV)
Low
Decline
198,735
194,406
184,211
192,811
191,491 •
185,152
180 , 913
192,982
196,510
188,328
185,472
198,734
207,526
199,324
193,928
206,723
Medium
Decline
198,735
194,406
177,966
180 , 245
173,008
162,448
147,357
143,983
132,853
117,081
99,920
95,083
85,224
71,532
57 , 844
53,265
High
Decline
198,735
194,406
172,970
170,194
158,223
144 , 285
120,511
115,813
105,411
93,255
74,277
68 , 648
59,966
50,136
36,616
32,495
                            A.1-68

-------
Table A,1,3-24.  Growth Rates for Asbestos Disc Brake Pads
 and Asbestos Drum Brake Linings in Cars and Light Trucks
                         (percent)
Disc Brake Pads

1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Low
Decline
-0.14
-0.06
-0.01
-0.04
-0.17
-0.06
-0.02
-0.07
-0.20
-0.05
0.00
-0.04
-0.16
-0.04
0.02
Medium
Decline
-0.14
-0.08
-0.03
-0.06
-0.20
-0.11
-0.07
-0.12
-0.27
-0.14
-0.10
-0.16
-0.32
-0.18
-0.13
(IMV)
High
Decline
-0.14
-0.09
-0.04
-0.07
-0.18
-0.11
-0.09
-0.14
-0.25
-0.13
-0.13
-0.21
-0.29
-0.15
-0.18
Drum Brake Linines ( IMV)
Low
Decline
-0.02
-0.05
0.05
-0.01
-0.03
-0.02
0.07
0.02
-0.04
-0.02
0.07
0.04
-0.04
-0.03
0.07
Medium
Decline
-0.02
-0.08
0.01
-0.04
-0.06
-0.09
-0.02
-0.08
-0.12
-0.15
-0.05
-0.10
-0.16
-0.19
-0.08
High
Decline
-0.02
-0.11
-0.02
-0.07
-0.09
-0.16
-0.04
-0.09
-0.12
-0.20
-0.08
-0.13
-0.16
-0.27
-0.11
                          A.1-69

-------
                    Table A.1.3-25.   Sales Forecast of Drum and Disc Brakes under Low Decline tesumptiotf
                                                             (in thousands)
Asbestos Drum Brake Linings
Sew Sales (OEM)

Year
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000

Car
37,588
38,967
38,967
38,277
35,174
34 , 139
38,277
40,691
37,932
36,553
39,312
42,760
41,381
38,967
40,691
Light
Trucks
16,687
17,242
17,575
17,168
15,910
15,318
16,872
18,019
17,353
16,946
17,871
19,388
19,277
18,500
19,425

Total
54,275
56,209
56,542
55,445
51,08*
49,457
55,149
58,710
55,285
53,499
57 , 183
62,148
60,658
57,467
60,116
Replacement Sales (A/H)

Car
97 , 127
87,998
94,645
93,361
90,109
88,296
93-, 538
92,124
87,472
86,838
93,957
95,538
89,808
88,131
95,247
Light
Trucks
43,005
40,004
41,624
42,684
43,959
43,160
44,295
45,676
45,570
45,135
47,594
49,840
48,858
48,330
51,360

fotal
140,132
128,002
136,269
136,045
134,068
131,456
137,833
137,800
133,042
131,973
141,551
145,378
138,666
136,461
146,607
Asbestos Disc Brake Pads (LMV)
Hew Sales (OEM)

Car
6,985
7,241
7,241
7,113
6,536
6,344
7,113
7,561
7,049
6,792
7,305
7,946
7,690
7,241
7,561
Light
Trucks
2,706
2,796
2,850
2,784
2,580
2,484
2,736
2,922
2,814
2,748
2, am
3,144
3,126
3,000
3,150

Total
9,691
10,037
10,091
9,897
9,116
8,828
9,849
10,483
9,863
9,540
10,203
11,090
10,816
10,241
10,711
Eeplacement Sales (A/M3

Car
79,755
73,485
74,133
69,517'
54,459
50,151-
49,126--
43,446
32,175
29,872
30,064
27,272
21,424
20,429
21,275
Light
Trucks
29,701
28,261
26,228
26 , 756
24,145
23,233
21,209
20,860
17,805
17,193
16,093
15,657
13,092
12,698
12,438

Total
109,456
101,746
100,361
96,273
78,604
73,384
70,335
64,306
49,980
47,065
46,157
42,929
34,516
33,127
33,713
  15 percent of new vehicles are made with asbestos disc brake syatens in 1986-2000 and 92.5 percent of new vehicles are
  nrada with asbestos dnsn brake systems in 1986-2000.
Source:  ICF, sae testt.

-------
                 Table A.1.3-26.
Sales Forecast of Drian and Disc Brakes under Moderate Decline Assuutptlon8
                           (in thousands)
Asbestos Drum Brake Linings


Year
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
New

Car
37,588
34,637
30,308
25,518
19,541
15,173
12,759
9,042
4,215
0
0
0
0
0
0
Sales (OEM)
Light
Trucks
16,687
15,326
13,669
•11,445
8,839
6,806
5,624
4,004
1,928
0
0
0
0
0
0

Total
54,275
49,964
43,977
36,963
28,380
21,981
18,383
13,047
6,143
0
0
0
0
0
0
Replacement Sales (A/H)

Car
97,127
87,998
94,645
93,361
90,109
84,066
85,077
79,658
72,199
64,675
61,760
53,912
43,74f
34,553
31,524
Light
Tracks
43,005
40,004
41,624
42,684
43,959
41,309
40,522
40, 148
38,739
35,244
33,322
31,311
27,791
23,290
21,741

Total
140,131
128,003
136,269
136,045
134,069
125,376
125,599
119,806
110,938
99,919
95,082
85,223
71,541
57,843
53,265
Asbestos Disc Brafca Fads (LH7)
New Sales (OEM)

Car
6,985
5,793
4,345
2,845
1.307
0
0
0
0
0
0
0
0
0
0
Light
Trucks
2,706
2,237
1,710
1,114
516
0
0
0
0
0
0
0
0
0
0

Total
9,691
8,030
6,055
3,959
1,823
0
0
0
0
0
0
0
0
0
0
Replacement Sales 
-------
                   Table A.1.3-27.
Sales Forecast of Drum and Disc Brakes under High Decline Assumption*
                          (in thousands)
Asbestos Drum Brake Linings
Mew Sales (OEM)

fear
1986
198?
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000

Car
37,588
31,174
23,380
15,311
7,035
0
0
0
0
0
0
0
0
0
0
Light
Tracks
16,687
13,794
10,5*5
6,867
3,182
0
0
0
0
0
0
0
0
0
0

Total
54,275
44, 967
33,925
22,178
10,217
0
0
0
0
0
0
0
0
0
0
Replacement Sales (A/M)

Car
97,127
87,998
94,645
93,361
90,10?
80,682
78,309
69,686
59,981
46,9*6
43,483
36 , 514
29,140
20,261
17,695
Light
Trucks
43,005
40,004
41,624
42, 684
43,959
39,829
37,504
35,725
33,274
27,331
25,165
23,452
20,996
16,355
14,800

Total
140,131
128,003
136,269
136,045
134,069
120,511
115,813
105,411
93,255
74,277
68,648
59,966
50,136
36,616
32,495
Asbestos Disc Brake Fad* (TJW)
Haw Sales (OEM)

Car
6,985
4,827
2,414
0
0
0
0
0
0
0
0
0
0
0
0
Light
Trucks
2,706
1,864
950
0
0
0
0
0
0
0
0
0
0
0
0

Total
9,691
6,691
3,364
0
0
0
0
0
0
0
0
0
0
0
0
Replacement Sales (A/M)

Car
79,755
73,485
74,133
69,517
54,459
47,793
44,410
36,497
25,789
21,649
19,065
13,917
9,053
7,382
5,993
Light
Trucks
29,701
28,261
26,228
26,756
24,145
22,333
19,373
18,171
15,312
13,981
11,793
10,407
8,124
7,269
6,014

Total
109,455
101,745
100,361
96,273
78,603
70,125
63,783
54,668
41,102
35,630
30,858
24,323
17,177
14,651
12,007
  15 percent of 1986 vehicles are made with asbestos disc brake systems,  0 percent of vehicles made after 1988  ass made
  with asbestos disc brake systems and 92.5 percent of 1986 vehicles are  made with asbestoa drran brake  systems,  0 percent
  of vehicles made after 1990 are made with asbestos drum brake systems.   {A linear decline is assigned  in the
  intermediate years.)

Source:  ICF, see text.

-------
Table A. 1.3-28.   Baseline Growth Sates  of Drum and Disc  (UW) Brakes used in the ARCM: 1986-2000
Growth Rates


Year
1986-1987
1987-1988
1988-1989
1989-1990
1990-1991
1991-1992
1992-1993
1993-1994
1994-1995
1995-1996
1996-1997
1997-1998
1998-1999
1999-2000
18. Dcum
Low
Decline
3.56
0,59
-1.94
~7.8?
-3.18
11.51
6.46
-5.83
-3. 23
6.89
8.68
-2.40
-5.26
4.61
Brake Linings COSM)
Moderate
Decline
-7.94
-11.98
-15.95
-23.22
-22.55
-16.37
-29.03
-52.92
-100.00
0.00
0.00
0.00
0.00
0.00
High
Decline
-17.15
-24.56
-34.63
-53.93
-100.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
19. Disc Brake Pads,
Low
Decline
3.5?
0.54
-1.92
-7.89
-3.16
11.57
6.44
~5.92
-3.27
6.95
8,69
-2,47
-5.31
4.59
tfoderate
Declina
-17,14
-24 . 60
-34.62
-53.94
-100.00
0.00
0.00
6.00
0.00
0.00
0.00
0,00
0.00
0.00
LMV (OBI)
High
Decline
-30.95
-49.73
-100.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1985-2000
36. Drum
Low
Decline
-8.66
6.46
-0.16
-1.45
-1.95
4.85
-0.02
-3.45,
-0.80
7.26
2.70
-4.62
-1.59
7,43
«>

Brake Linings (A/M)
Moderate
Decline
-8.66
6.46
-0.16
-1,45
-6.48
0.18
-*.«!
-7.40 •
-9.93
-4.84
-10.37
-16.05
-19.15
-7.92
High
Decline
-8.66
6.46
-0.16
-1.45
-10.11
-3.90
-8.98
-11.53
-20.35
-7.58
-12.65
-16.39
-26.97
-11.25


37, Disc Brake Fads,
Low
Decline
-7.04
• -1.35
-4.07
-18.35
• -6.64
-4.15
-8.57
-22.28
-5.83
-1.93
-6.99
-19,60
-4.02
1.77
Moderate
Decline
-7.04
-1.36
-4.07
-18.35
-9,13
-7.03
-11.87
-26.73
-14.25
-9.86
-16.47
-32.36
-18.12
-12,76

LMV (A/M)
High
Decline
-7,04
-1,36
-4.07
-18,35
-10.79
-9,04
-14.29
-24 . 82
-13,31
-13.39
-21.18
-29.38
-14.70
-18.05

-------
Annual sales of disc brake pads are forecasted to increase
for both cars and trucks, but annual sales of asbestos disc
brake pads will fall dramatically.  This will occur because
vehicles with asbestos disc brake pads will be scrapped and
replaced with vehicles with semi-metallic disc brake pads.
The total annual sale of asbestos pads will fall from
approximately 115,000,000 in 1986 to 45,000,000 in 2000.

Yearly fluctuations in vehicles sales are not forecasted to
have a dramatic effect on brake sales because the vast
majority of brakes are sold as replacement brakes.

The results presented in this paper tend to be conservative
because they are based on the assumptions that the disc
brake substitution in new vehicles away from asbestos
remains at its current level, that all asbestos .pads are
actually replaced with asbestos pads, and that no
substitution away from asbestos in drum brakes takes place.
                        A.1-74

-------
REFERENCES
American Society of Mechanical  Engineers, Analysis  of  the ..Feasibility
    Replacing Asbestos  In Automobile  and Truck	Brakes.  1987.

Data Resources, Incorporated, U.J|..jmL_ong ..lens	Review (Spring	J.9861, Lexington,
    MA, 1986.

ICF Incorporated, 1986.   Mark Handwerger, Washington,  B.C.  20006.  Transcribed
    telephone conversations with Thomas  Johnson, GM Corporation, Detroit, MI.
    Representative, Mazda, Incorporated, Irvine, CA.   Representative Volvo
    Cars of North America, Rockleigh,  NJ.  Representative,  Mercedes-Benz of
    North America, Incorporated,  Montvale, NJ.  Representative, Audi of
    America, Troy, MI.  Representative,  Volkswagen  of  America,  Incorporated,
    Troy, MI.  David Jenkins, America Honda Motor Company,  Incorporated,
    Gardena, CA.  Robert  Mitchell, BMW of North America, Incorporated,
    Montvale, NJ.  Representative, P.T.  Brake  Lining Co., Lawrence, MA.  Jerry
    Clark, Delco Morraitie Division of General  Motors,  Dayton, OH.  Jim Bowman,
    Nissan Motor Corporation in USA,  Gardena,  CA.   Representative, Ford Motor
    Company, Detroit, MI.

ICF Incorporated.  1987.  Rick  Hollander, Washington,  D.C.  20006.
    Transcribed telephone conversation with Dr. Shawn  Rhee, Allied/Bendix
    Automotive, Troy, MI.

Motor Vehicle Manufacturers Association, Eg.JSoxJfeM.cle_J!ftct;fi_jand_Flgure_'jBi6t
    1986.

R.L. Polk and Company,  Detroit,  Michigan in Motor Vehicle Facts,.and Figures
    '86. pps. 26-27.

Roberts D,  1987 (February 16).   General Motors Corporation, Detroit, MI,
    48202.  Letter and  attachments to C. Augustyniak,  Office of•Toxic
    Substances, U.S. Environmental Protection  Agency,  Washington, D.C. 20460.
    EPA CBI Doc. Control  No. 63-870000062.

U.S. Department of Transportation, The Reportby theFederalTask Jgorceon
    Motor Vehicle Goals Beyond  1980.  Washington, D.C.,  1976.

U.S. Department of Transportation, Automotiye  Maintenance Data  Base..£or. Model
    Years 1976-1979. Washington,  D.C.  1980.

Versar Incorporated,  1987 (September 25).  Nonoccupational Asbestos Exposure.
Prepared for Exposure Evaluation Division, Exposure Assessment  Branch, Office
of Pesticides and Toxic Substances, U.S. EPA Final  Report.

Ward's Communication Incorporated, Ward's Automotive .Yearbook.  (1974-1986).

Wharton Econometric Forecasting Associates, Philadelphia, PA, 1983.
                                    A.1-75

-------
                             LIST OF ATTACHMENTS


A   Mathematical Formulation of Underlying Model.

B-l Outstanding Stock of Asbestos Drum Brakes  in Light Duty Trucks - Low
    Decline,

B-2 Future Sales of Asbestos Drum Brakes for Light Duty Trucks  - Low Decline.

C-l Outstanding Stock of Asbestos Disc Brakes  in Light Duty Trucks - Low
    Decline,

C-2 Future Sales of Asbestos Disc Brakes for Light Duty Trucks  - Low Decline.

D-l Outstanding Stock of Asbestos Drum Brakes  in Cars - Low Decline.

D-2 Future Sales of Asbestos Drum Brakes for Cars - Low Decline,

E-l Outstanding Stock of Asbestos Disc Brakes  in Cars - Low Decline.

E-2 Future Sales of Asbestos Disc Brakes for Cars - Low Decline.

F-l Outstanding Stock of Asbestos Drum Brakes  in Light Duty Trucks - Medium
    Decline.

F-2 Future Sales of Asbestos Drum Brakes for Light Duty Trucks  - Medium
    Decline.

G-l Outstanding Stock of Asbestos Disc Brakes  in Light Duty Trucks - Medium
    Decline,

G-2 Future Sales of Asbestos Disc Brakes for Light Duty Trucks  - Medium
    Decline.

H-l Outstanding Stock of Asbestos Drum Brakes  in Cars - Medium Decline.

H-2 Future Sales of Asbestos Drum Brakes for Cars - Medium Decline,

1-1 Outstanding Stock of Asbestos Disc Brakes  in Cars - Medium Decline.

1-2 Future Sales of Asbestos Disc Brakes for Cars - Medium Decline.

J-l Outstanding Stock of Asbestos Drun Brakes  in Light Duty Trucks - High
    Decline.

J-2 Future Sales of Asbestos Drum Brakes for Light Duty Trucks  - High Decline.

K-l Outstanding Stock of Asbestos Disc Brakes  in Light Duty Trucks - High
    Decline.

K-2 Future Sales of Asbestos Disc Brakes for Light-Duty Trucks  - High Decline.

L-l Outstanding Stock of Asbestos Drum Brakes  in Cars - High Decline.
                                   A.1-76

-------
L-2 Future Sales of Asbestos Drum Brakes for Cars - High Decline.




M-l Outstanding Stock of Asbestos Disc Brakes in Cars - High Decline.




M-2 Future Sales of Asbestos Disc Brakes for Cars - High Decline,
                                   A.1-77

-------
                                 ATTACHMENT A
    This attachment presents a mathematical  formulation of  the model which
underlies this analysis.  The formulation is presented only for one of the
four categories  -- asbestos disc brakes  in trucks.  However, the equation can
be extended to the other three categories.
                              TS. - OEMS, + RS.                          (1)
where:
      TS. - total sale of asbestos disc brakes for trucks in year j.

    OEMS. - original equipment market  sale of asbestos disc brakes  for
        -"   trucks in year j.

      RS, - replacement sale of asbestos disc brakes for trucks in  year j.


                          OEMS. - 8K.  * NTS,     (for all i - j)           (2)
                              J1J
where:

       K. - percentage of total truck  pads and linings which are asbestos
            disc in year i..

     NTS. - new truck sales in year j,


                                 K. -  T. * C.                             (3)
where:
       T. — percentage of total truck pads  and  linings which are disc
            pads in year i,

       C. — percentage of total disc pads which are asbestos in year i.
              RS. -   fi     8K. * OT., g -I-   t     8K. * FT., g          (4)
                J   l-J-31    ±      lj      i-j-31    J      1J


where

        g — 1 if {j-i)/4 « integer
        g - 0 else

       K. •" percentage of total truck pads  and  linings which are asbestos
            disc in model year i.

     OT. . - stock of outstanding trucks of  model year i in  year j for
       1J   i § 1985.

                                    A. 1-78

-------
     FT.. - stock of outstanding trucks of model year i In year j for i
       13     1986.
                          OT.. - OT.. , * P. , .   .  .                    (5)
                            ij     ij-1    j-l-i, j-i                    <• 7
where
    ?._-,_.  ._. - conditional probability that a truck which has survived
          '       j-l-i years survives into its j-i year.
                           FT.. - FT..^ * Pj-1                          (6)
where
    F. .      - probability that a truck will survive into its j-i year.
                                   A.1-79

-------
EXHIBIT B-I: OUTSTANDING STOCK or ASBESTOS DRUM BRSKFS IN LOTS
	 	 	 . — 	 - 	 , 	 - - .-

MODEL
YEAR
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

1O03
1993
1994
1995
1996
1997
1998
1999
2000

TOTAL



NUMBER OF
ASBESTOS mm BRAKE
PADS IN LOTS ESTIMATED TO BE IN OPERATION BY MODEL
YEAR



(IN THOUSANDS)
1986
0
169
226
256
439
601
774
1,206
1,842
3,676
3,692
4,665
5,470
7,949
6,108
6,078
5,393
6.795
7,904
8,968
6,865
9,338
11,726
13,216
14,281
8,176
8,163
8,61?
9,376
13,652
15,855
16,687











208,161
1987
0
0
166
192
325
438
585
909
1,392
2,848
2,907
3,695
4,405
6,482
5,093
5,130
4,635
5,923
6,980
8,005
6,226
8,641
10,990
12,564
13,761
7,956
7,991
8,474
9,261
13,500
15,744
16,620
17,242











209,080
1988
0
0
0
141
244
325
427
686
1,049
2,153
2,252
2,909
3,490
5,221
4,154
4,278
3,913
5,090
6,084
7,070
5,557
7,835
10,170
11,776
13,082
7,666
7,776
8,296
9,107
13,334
15,569
16,503
17,173
17,575











210,904
1989
0
0
0
0
179
244
316
501
792
1,623
1,702
2,254
2,747
4,136
3,345
3.489
3,263
4,297
5,228
6,162
4,908
6,994
9,222
10,897
12,262
7,288
7,492
8,073
8,915
13,113
15,378
16,320
17,052
17,505
17,168











212,864
1990
0
0
0
0
0
179
23?
371
578
1,225
1,283
1,703
2,128
3,256
2,650
2,810
2,661
3,583
4,414
5,295
4,278
6,177
8,232
9,882
11,346
6,831
7,123
7,778
8,676
12,837
15,123
16,120
16,863
17,382
17,099
15,910


"
"






214,829
1991
0
0
0
0
0
0
174
278
428
894
969
1,284
1,609
2,522
2,086
2,226
2,143
2,922
3,680
4,470
3,676
5,384
7,270
8,821
10,289
6,321
6,676
7,395
8,359
12,492
14,804
15,853
16,656
17,188
16,979
15.846
15,318



~ *


""


215,014
1992
0
o
0
0
0
Q
0
204
321
662
707
970
1,213
1,906
1,616
1,752
1,697
2,353
3,001
3,727
3,103
4,627
6,337
7,790
9,184
5,732
6,178
6,931
7,947
12,037
14,407
15,519
16,380
16,97?
16,790
15,735
15,257
16,872
-•







217,934
1993
0
g
Q
0

Q
g
0
236
497
524
70S
916
1,437
1,222
1,358
1,336
1,864
2,417
3,040
2,588
3,906
5,446
6,790
8,111
5,117
5,602
6,414
7,449
11,443
13,881
15,102
16,035
16,696
16,584
15,560
15,150
16,805
18,019







222,249
1994
0
0
g
o
g
0
g
g
0
364
393
524
668
1,085
921
1,026
1,835
1,467
1,915
2,448
2,110
3,257
4,597
5,835
7,070
4,519
5,001
5,816
6,893
10,725
13,197
14,551
15,604
16,345
16,310
15,369
14,981
16,686
17,947
17,353






226,012
1995
0
g
0
P

g
o
0
0
288
393
495
792
695
774
783
1,137
1,507
1,939
1,700
2,656
3,833
4,926
6,076
3,939
4,416
5,192
6,250
9,925
12,369
13,834
15,035
15,905
15,966
15,115
-- 14,797
16,501
17,831
17,284
16,946





229,287
1996
0

g
g

g
g
0
0
0
288
371
587
507
584
590
859
1,168
1,527
1,346
2,139
3,126
4,107
5,129
3,385
3,849
4,585
5,579
9,000
11,446
12,966
14,294
15,325
15,537
14,796
14,552
16,298
17,623
17,162
16,878
17,871
-•



233,475
1997
0
n
g
Q


g
0
0
0
0
272
440
376
426
445
648
883
1,183
1,060
1,694
2,518
3,349
4, 277
2,857
3,308
3,996
4,927
8,034
10,379
11,998
13,397
14,570
14,970
14,399
14,246
16,028
17,406
16,971
16,760
17,800
19,388
--


239,005
1998
0
g
0
g

g
o
0
0
0
0
0
323
282
316
325
489
665
894
821
1,334
1,994
2,698
3,488
2,383
2,792
3,434
4,295
7,095
9,265
10,880
12,397
13,656
14,232
13,874
13,863
15,691
17.118
16,763
16,573
17,674
19,310
19,277
--

244,201
1999
0
n
n
n

g
Q
0
0
0
0
0
0
207
23?
241
357
502
674
621
1,033
1,570
2,137
2,809
1,943
2,328
2,899
3,691
6,184
8,182
9,712
11,242
12,636
13,340
13,189
13,357
15,269
16,758
16,485
16,370
17,478
19,175
19,?00
18,500

2.8,3*
2000






n
0
0
0
0
0
0
0
174
181
264
367
509
468
781
1,216
1,682
2,225
1,565
1,899
2,417
3,116
5,114
7,132
8,577
10,035
11,459
12,344
12,362
12,699
14,712
16,307
16,138
16,099
17,263
18,961
19,065
18,426
19,425
253,182

-------
EXHIBIT H-Z: FUTURE SftlES OF ASBESTOS DRUM BRAKES  FOR IDTs
• • 	 	 	 _,..-^.......um. 	 ,.„...,— . 	
SALES FORECASTS: DRUM BRWCE PW5S FOR tIGHT DUTY
HODEl
YEAR
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1998
t993
1994
1995
1996
1997
1998
1999
?000
TOW SALES:
«EW SAIES:
REPlACEMrNT SALES:
(IN THOUSANDS)
1986
0
0
0
256
0
0
0
1,206
0
0
0
4,665
0
0
0
6,078
0
0
0
8,968
0
0
0
13,216
0
0
0
8,617
0
0
0
16,687







•59,692
16,687
45,005
1987
0
0
0
0
325
0
0
0
1,392
0
0
0
4,405
0
0
0
4,635
0
0
0
6,226
0
0
0
13,761
0
0
0
9,261
0
0
0
17,242



--
--


57,246
17,242
40,004
1988
0
0
0
0
0
325
0
0
0
2,153
0
0
0
5,221
0
0
0
5,090
0
0
0
7,835
0
0
0
7,666
0
0
0
13,334
0
0
0
17,575







59, 199
17,575
41,624
1989
0
0
0
0
0
0
316
0
0
0
1,702
0
0
0
3,345
0
0
0
5,228
0
0
0
9,222
0
0
0
7,492
0
0
0
15,378
0
0
0
17,168




..


59,852
17,168
42,684
1990
0
0
0
0
o
0
0
371
0
0
0
1,703
0
0
0
2,810
0
0
0
5,295
0
0
0
9,882
0
0
0
7,778
0
0
0
16,120
0
0
0
15,910






--
59,869
15,910
-43,959
1991
0
0
0
0
Q
0
0
0
428
0
0
0
1,609
0
0
0
2,143
0
0
0
3,676
0
0
0
10,289
0
0
0
8,359
0
0
0
16,656
0
0
0
15,318







58,478
15,318
43,160
1992
0
0
0
0
0
0
0
0
662
0
0
0
1,906
0
0
0
2,353
0
0
0
4,627
0
0
0
5,732
0
0
0
12,037
0
0
0
16,977
0
0
0
16,872







61,167
16,872
44 , ?95
1993
0
0
0
0
0
0
0
0
0
0
524
0
0
0
1,222
0
0
0
2,417
0
0
0
5,446
0
0
0
5,602
0
0
0
13,881
0
0
0
16,584
0
0
0
18,019





--
63,695
18,019
45,676
TRUCKS, 1986-2000

1994
0
0
0
0
0
0
0
0
0
0
0
524
0
0
0
1,026
0
0
0
2,448
0
0
0
5,835
0
0
0
5,816
0
0
0
14,551
0
0
0
15,369
0
0
0
17,353





62,923
17,353
45,570

1995
0
0
0
0
0
0
0
0
0
0
0
0
495
0
0
0
783
0
0
0
1,700
0
0
0
6,076
0
0
0
6,250
0
0
0
15,035
0
0
0
14,797
0
0
0
16,946




6?, 00!
16,94ft
«,-Ur>

1996
0
0
0
0
0
0
0
0
0
0
0
0
0
587
0
0
0
859
0
0
0
2,139
0
0
0
3,385
0
0
0
9,000
0
0
0
15,325
0
0
0
16,298
0
0
0
17,871



65,465
17.K71
'>7.rnf,

1997
0
0
0
0
0
0
0
0
0
0
0
0
0
0
376
0
0
0
883
0
0
0
2,518
0
0
0
3,308
0
0
0
10,379
0
0
0
14,970
0
0
0
17,406
0
0
0
19,388


69,228
19,380
49,840

1998
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
316
0
0
0
894
0
0
0
2,698
0
0
0
3,434
0
0
0
10,880
0
0
0
13,874
0
0
0
16,763
0
0
0
19,277

68, 135
19,277
4B,f»S8

1999
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
241
0
0
0
621
0
0
0
2,809
0
0
0
3,691
0
0
0
11,242
0
0
0
13,357
0
0
0
16,370
0
0
0
18,500
66,830
IS, 500
48,130

2000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
264
0
0
0
781
0
0
0
1,565
0
0
0
5,314
0
0
0
11,459
0
0
0
14 712
g
0
0
17,263
0
0
0
19 6?1;
70, 785
i
-------
EXHIBIT C-1:  OUTSTANDING STOCK OF  ftSBSSTOS DISC  BRAKFS  IN lots
1 	 •• •" 	 — - ~™~" 	 	 — _ 	
MODEL
YERR
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
5999
2000

lOTfll


1986
0
0
0
0
0
0
0
0
0
0
0
47
85
250
943
2,401
2,835
4,859
5,869
6,886
6,133
8,936
11,540
13,216
14,281
8,176
8,163
7,152
6,514
7,433
5,969
2,706









124,391


1987
0
0
0
0
0
0
0
0
0
0
0
37
68
204
787
2,026
2,437
4,235
5,183
6,146
5,561
8,269
10,816
12,564
13,761
7,956
7,991
7,034
6,434
7,350
5,927
2,695
2,796







--

120,276


1988
0
0
0
0
0
0
0
0
0
o
0
29
54
164
642
1,690
2,057
3,639
4,517
5,428
4,964
7,498
10,008
11,776
13,082
7,666
7,776
6,886
6,327
7,260
5,861
2,676
2,785
2,850







-.

115,636

BUH8ER OF
1989
0
0
o
0
0
0
0
0
o
0
0
23
43
130
517
1,378
1,715
3,072
3,882
4,731
4,384
6,693
9,076
10,897
12,262
7,288
7,492
6,700
6,194
7,140
5,789
2,646
2,765
2,839
2,784




,.




110,440 t

ASBESTOS
1990
0
0
g
o
Q
0

n


0
17
33
102
409
1,110
1,399
2,562
3,277
4,066
3,821
5,911
8,101
9,882
11,346
6,831
7,123
6,456
6,027
6,989
5,693
2,614
2,734
2,819
2,773
2,580









04,676

DISC BRAKE PADS 1» LOTS ESTIMATED TO 8£ IN OPERfttlOtt
(IN THOUSAWDS)
1991
0










25
79
322
879
1,127
2,089
2,733
3,432
3,284
5,152
7,155
8,821
10,289
6,321
6,676
6,138
5,808
6,801
5,573
2,571
2,701
2,787
2,753
2,570
2,484









98,583

1992
a





0


0
m
19
60
250
692
892
1,683
2,228
2,862
2,772
4,428
6,236
7,790
9,184
5,732
6,178
5,753
5,521
6,553
5,424
2,517
2,656
2,753
2,723
2,552
2,474
2,736
" "







92,677

1993
0

0
0
0

0
0
0
0

14
45
18f
536
703
1,333
1,795
2,334
2,312
3,738
5,359
6,790
8,111
5,117
5,602
5,323
5,175
6,230
5,226
2,449
2,600
2,708
2,689
2,523
2,457
2,725
2,922


"




87,011
-
1994
0
0
0
0
0
0
0
0
0
0
0
5
10
34
142
405
544
1,049
1,422
1,880
1,885
3,117
4,524
5,835
7,070
4,519
5,001
4,827
4,789
5,839
4,968
2,360
2,530
2,651
2,645
2,492
2,429
2,706
2,910
2,814




* •

81,403

1995
0
0
0
0
0
0
0
0
0
0
0
4
8
25
107
306
411
813
1,119
1,489
1,518
2,542
3,772
4,926
6,076
3,939
4,416
4,309
4,342
5,404
4,657
2,243
2,438
2,579
2,589
2,451
2,40!
2,676
2,890
2,803
2,748





75,998
	
1996
0
0
0
0
0
0
0
0
0
0
0
3
6
18
78
231
310
614
867
1,172
1,203
2,047
3,076
4,107
5,129
3,385
3,849
3,806
3,876
4,900
4,309
2,103
2,318
2,485
2,520
2,399
2,360
2,643
2,858
2,783
2.737
2,898




71,090
	
8T MGOEl
1997
0
0
0
0
0
0
0
0
0
0
0
0
4
14
58
168
234
463
655
908
947
1,622
2,478
3,349
4,277
2,857
3,308
3,317
3,423
4,374
3,907
1,946
2,172
2,363
2,428
2,335
2,310
2,599
2,823
2,752
2,718
2,886
3,144



66,840

YEAR
1998
0
0
0
0
0
0
0
0
0
0
0
0
0
10
44
125
171
350
494
686
734
1,277
1,963
2,698
3,488
2,383
2,792
2,850
2,984
3,863
3,488
1,764
2,010
2,214
2,308
2,250
2,248
2,544
2,776
2,718
2,688
2,866
3,131
3,126
-•

63,042
	

1999
0
0
0
0
0
0
0
0
0
0
0
0
0
0
32
94
127
255
373
517
554
989
1,545
2,137
2,809
1,941
2,328
2,406
2,564
3,367
3,080
1,575
1,823
2,049
2,163
2,139
2,166
2,476
2,717
2,673
2,655
2,834
3,109
3,113
3,000

59,615
--

2000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
69
95
189
27?
591
418
748
1,197
1,682
2,225
1,565
1,899
2,006
2,165
2,893
2,685
1.391
1,627
1,858
2,002
2,005
2 059
2 386
2,644
2,61?
2,611
2,799
3,075
3,092
2,988
3,150
56. SO?

-------
EXHIBIT C-2:WTURE SALES OF ASBESTOS DISC BRAKES FOR  LDTs
	 • ' — .—••"— — .-. — — — — ~-~__i^__, — 	 	 	

MODEL
YEAR
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
19B1
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000

TOTAL SALES:
MFU SALES:
REPlrtCFMENT SALES:


SALES
FORECASTS: DISC BRAKE PADS FOR UGHT DUTY TRUCKS
1986-2000

-------
EXHIBIT 0-1: OUTSTANDING STOCK OF ASBESTOS DRUM  BRAKES  IK  CARS
"" " 	 - 	 	 -t- 	
MQOEl
YEAR
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000

TOTAL

NUH8ER OF ASBESTOS DRUM BRAKE PADS IN CARS EST (HATED
(IN THOUSANDS?
1986
0
0
2 314
3,114
4,011
6,080
7,392
10,206
10,480
14,255
17,291
19,211
17.589
25,726
32,108
35,634
36,844
33,086
31,564
28,962
29,115
37,331
37,468
37,588









477.367
1987
0
Q
2,194
2,84?
4,488
5,544
7,672
7,808
10,758
13,129
14,866
14,015
21,381
28,360
32,74«
34,538
31.738
30,708
28,428
28,790
37,068
37,355
37,512
38,967









470,914

1988
0

0
2,006
3,185
4,092
5,754
5,869
8,015
9,909
11,288
10,845
17,037
23,571
28,923
31,739
29,753
29,457
27,658
28,260
36,656
37,092
37,400
38,889
38,967







- ,

466,363

1989
0
0
0
0
2,244
2,904
4,247
4,402
6,025
7,382
8,519
8.235
13,184
18,782
24,039
28,034
27,341
27,614
26,531
27,494
35,980
36,679
37, 137
38,772
38,889
38,277









462,711

1990
0
0
0
0
0
2,046
3,014
3.249
4,518
5,549
6,347
6,215
10,011,
14,534
19,155
23,300
24,150
25,376
24,871
26,374
35,005
36,004
36,723
38,499
38,772
38,201
35,174
. .
..







457,085

1991
0
0
0
0
0
0
2,123
2,306
3,335
4,162
4,771
4,630
7,555
11,036
14,823
18,566
20,071
22,414
22,855
24,724
33,579
35,027
36,046
38,071
38,499
38,086
35.103
34,139


*"
""





451,922

1992
0
0
0
0
0
0
0
1,624
2,36?
3,072
3,578
3,480
5,629
8,329
11,255
14,367
15,993
18,629
20,187
22,720
31,478
33,601
35,069
37,369
38,071
37,818
34,998
34,071
38,277



""




451,982

1993
0
0
0
0
0
0
0
0
1,668
2,180
2,641
2,610
4,231
6,205
8.494
10,909
12,376
14,844
16,778
20,068
28,927
31,498
33,641
36,356
37,369
37,397
34,752
33,968
38,201
40,691



""
""


455,805

1994
0
0
0
0
0
0
0
0
0
0
1,536
1,874
1,927
3,173
4,664
6,328
8,233
9,397
11,487
13,369
16,679
25,550
28,945
31,536
34,875
36,356
36,708
34,365
33,729
38,086
40,610
37,932



. •


457.361

TO BE IN OPERATION
1995
0
0
0
0
0
0
0
0
0
0
0
1,320
1,367
2,342
3,498
4,757
6,134
7,092
8,722
10,346
13,290
21,236
25,567
28,980
32,693
34,875
35,713
33,732
33,354
37,818
40,488
37,857
36,553





457,733

1996
0
0
0
0
0
0
0
0
0
0
0
0
963
1,662
2,582
3,568
4,611
5,284
6,583
7,856
10,284
16,921
21,249
25,597
30,043
32,693
34,258
32,817
32,739
37,397
40,203
37, 743
36,480
39,312




460,845

8Y HQOEL
1997
0
0
0
0
0
0
0
0
0
0
0
0
0
1,171
1,832
2,633
3,458
3,972
4,904
5,929
7,809
13,094
16,932
21,275
26,536
30,043
32,115
31,480
31,852
36,708
39,755
37,477
36,370
39,233
42,760


."
467,339

YEAR
1998
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,291
1,869
2,552
2, 979
3,686
4,417
5,894
9,942
13,102
16,952
22,055
26,536
29,512
29,511
30,555
35,713
39,023
37,060
36,114
39,115
42,675
41,381
--

471,934


1999
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,317
1,811
2,199
2,765
3,320
4,391
7,504
9,949
13,118
17,574
22,055
26,067
27,119
28,643
34,258
37,965
36,377
35,712
38,840
42,546
41,298
38,967
•-
473,794


2000
0
0
0
0
0
0 -
0
0
0
0
0
0
e
0
0
0
1,276
1,560
2,04!
2,490
3,300
5,590
7,509
9,961
13,599
17,574
21,665
23,953
26 321
32 115
36,419
35,391
35,054
38,408
42,247
41,174
38,889
40,691
477, 2?7


-------
EXHIBIT D-2: FUTURE SALES OT ASBESTOS ORUH BRAKES  FOR CARS
I , 	 ••"•-• — ™— ~— 	 -~™ 	 . _ ... rr
SALES FORECASTS:
MODEL
TEAR
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
TOTAL SALES:
HEW SALES;
REPLACEMENT SfttES;

1986
0
0
0
3,114
0
0
0
10,206
0
0
0
19,211
0
0
0
35,634
0
0
0
28,962
0
0
0
37,588

,.
, „

--
..

134,714
37,588
97,127

1987
0
0
0
0
2,847
0
0
0
7,808
0
0
0
14,015
0
0
0
34,538
0
0
0
28,790
0
0
0
38,967


•



--
126,965
38,967
87,998

1988
0
0
0
0
0
3,185
0
0
0
8,015
0
0
0
17,037
0
0
0
29,753
0
0
0
36,656
0
0
0
38,967




,,

--
133,612
38,967
94,645

1989
0
0
0
0
0
0
2,904
0
0
0
7,382
0
0
0
18.782
0
0
0
27,614
0
0
0
36,679
0
0
0
38,277







131,639
38,277
93,361

1990
0
0
0
0
0
0
0
3,014
0
0
0
6,347
0
0
0
19,155
0
0
0
24,871
0
0
0
36,723
0
§
0
35,174






..
125,283
35,174
90,109
ORUH BRAKE LIIUDSS FOR CARS. 1986-2000
(IN
1991
0
0
0
0
0
0
0
0
2,306
0
0
0
4,630
0
0
0
18,566
0
0
0
24,724
0
0
0
38,071
0
0
0
34,139

"




--
122,435
34,139
88,296
THOUSANDS)
1992
0
0
0
0
0
0
0
0
0
2,367
0
0
0
5,629
0
0
0
15,993
0
0
0
31,478
0
0
0
38,071
0
0
0
38,277

" *

"


•-
131,815
38,277
93,538
1993
0
0
0
0
0
0
0
0
0
0
2,180
0
0
0
6,205.
0
0
0
14,844
0
0
0
31,498
0
0
0
37,397
0
0
0
40,69!



""

--
132,815
40,691
92,124

1994
0
0
0
0
0
0
0
0
0
0
0
1,874
0
0
0
6,328
0
0
0
13,369
0
0
0
31,536
0
0
0
34,365
0
0
0
37,932





125,405
37,932
87,472

1995
0
0
0
0
0
0
0
0
0
0
0
0
1,367
0
0
0
6,134
0
0
0
13,290
0
0
0
32,693
0
0
0
33,354
0
0
9
36,553


" *

123,391
36,553
H6.838

1996
0
0
0
0
0
0
0
0
0
0
0
0
0
1,662
0
0
0
5,284
0
0
0
16,921
0
0
0
32,693
0
0
0
37,397
0
0
0
39,312


--
133,269
39,312
93,957

1997
0
0
0
0
0
0
9
0
0
0
0
0
0
0
1,832
0
0
0
4,904
0
0
0
16,932
0
0
0
32,115
0
0
0
39,755
0
0
0
42,760


138,298
42,760
95,538

1998
0
0
0
9
0
0
0
0
0
0
0
0
0
0
0
1,869
0
0
0
4,417
0
0
0
16,952
0
0
0
29,511
0
0
0
37,060
0
0
0
41,381

131,189
41,381
89,808

1999
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1.811
0
0
0
4,391
0
0
0
17,574
0
0
0
28,643
0
0
0
35,712
0
0
0
38,967
127,098
38,967
88,131

2000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,560
0
0
0
5,590
0
0
0
17,574
0
0
0
32,115
0
0
0
38,408
0
0
0
40,691
135,938
40,691
95,247

-------
EXHIBIT E-1: OUTSTANDING STOCK OF ASBESTOS OJSC BRAKES  IN C/IRS
	 	 	 :":•„ 	 	 •--; i . .•"- 	 — 	 	 	 	
WUHBE!? OF ASBESTOS DISC BRAKE PADS
HOOEl
YEAR 1986
1963 0
1964 o
1965 0
1966 64
1967 128
1968 415
1969 1,193
1970 2,632
1971 4,835
1972 8,300
1973 12,968
1974 13,944
1975 14,952
1976 24,760
'977 33,136
1978 37,201
1979 38,612
1980 35,071
1981 33,584
1982 25,913
1983 21,926
1984 21,707
1985 15,065
1986 6.985
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000

TOTAl 353,391

IN CARS ESTIMATED
TO BE 1M
OPERATION
BY HOOEL
"


	 	 <1» THOUSANDS)
1987 1988
0
0
0
45
91
307
895
1,978
3,602
6,264
9,847
10,791
11,914
20,578
29,268
34,186
36,196
33,643
32,673
25,436
21,682
21,554
15,019
6,971
7,241


..
--
--
--
--

330,181
0
o
Q
g

218
661
1,484
2,707
4,667
7,432
8,194
9,220
16,397
24,325
30,196
33,263
31,538
31,342
24,746
21.282
21,314
14,914
6,950
7,227
7,241








305,380

1989
0



153
469
1,095
2.031
3,508
5,537
6,184
7,000
12,689
19,383
25,097
29,380
28,982
29,381
23,738
20,705
20,921
14,748
6,901
7,205
7,227
7,113








279,446

1990
0



0
330
777
1,499
2,631
4,162
4,607
5,283
9,635
14,999
19,997
24,418
25,599
27,000
22,253
19,862
20,354
14,476
6,824
7,154
7,205
7,099
6,536






..

252,701

1991
0

0
0
0
0
0
548
1,064
1,942
3,121
3,463
3,936
7,272
11,389
15,475
19,457
21,276
23,848
20,450
18,619
19,525
14,084
6,698
7,074
7,154
7,077
6,523
6,344








226,339

1992
0
0
0
0
0
0
0
0
749
1,378
2,304
2,597
2,959
5,417
8,595
11,750
15,057
16,953
19,821
18,062
17,110
18,303
13,510
6,517
6,944
7,074
7,028
6,503
6,331
7,113
- -

,.





202,077

1993
0
0
0
0
0
0
0
0
0
971
1,635
1,917
2,219
4,072
6,404
8,868
11,433
13,119
15,794
15,012
15,113
16,820
12,665
6,251
6,756
6,944
6,949
6,458
6,312
7,099
7,561

, ,





180,371

1994
0
0
0
0
0
0
0
0
0
0
1,152
1,360
!,638
3,054
4,813
6,607
8,628
9,961
12,222
11,962
12,561
14,857
11,638
5,860
6,481
6,756
6,821
6,386
6,268
7,077
7,546
7,049






160,698

1995
0
0
0
0
0
0
0
0
0
0
0
958
1,162
2,254
3,610
4,966
6,428
7,518
9,280
9,257
10,009
12,348
10,280
5,385
6,075
6,48!
6,636
6,268
6,198
7,028
7,524
7,035
6,792





143,492

1996
0
0
0
0
0
0
0
0
0
0
0
0
819
1,600
2,665
3,725
4,832
5,601
7,004
7,029
7,745
9,839
8,544
4,757
5,583
6,075
6,366
6,098
6,084
6,949
7,475
7,0!4
6,779
7,305
--



129,881

1997
0
0
0
0
0
0
0
0
0
0
0
0
0
1,127
1,891
2,749
3,624
4,210
5,218
5,305
5,881
7,614
6,808
3,953
4,931
5,583
5,968
5,850
5,919
6,821
7,388
6,964
6,759
7,291
7,946



119,798
	 _
1998
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,332
1,951
2,675
3,158
3,922
3,952
4,438
5,781
5,268
3,150
4,098
4,931
5,484
5,484
5,678
6,636
7,251
6,887
6,711
7,269
7,930
7,690


lit, 677

1999
0
0
o
o
0
0
0
0
0
0
0
0
0
0
0
1,375
1,898
2,331
2,942
2,971
3,307
4,363
4,000
2,438
3,266
4,098
4,844
5,039
5,323
6 366
7 055
6,760
6,636
7,217
7,906
7,674
7,241

105,049

2000
o

0
g
0
0
0
0
0
0
0
0
0
0
0
0
1,337
1,654
2,171
2,228
2,486
3,251
3,019
1,851
2,527
3,266
4,026
4,451
4,891
5 968
6 767
6 577
6,514
7,137
7,851
7,651
7,227
7,561
100,410


-------
EXHIBIT E-2: FUTURE SALES OF ASBESTOS DISC BRAKES FOR  CARS
	 ~~^- 	 ' 	 	 	 ~
MODEL
TEAR
"
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
TOTAL SAIES:
HEM SftlES:
REPLACEMENT SALES:

1986
0
0
0
64
0
0
0
2,632
0
0
0
13,944
0
0
0
37,201
0
0
0
25,913
0
0
0
6,985
--
. ^






86,739
6,985
79,755

1987
0
0
0
0
91
0
0
0
3,602
0
0
0
11,914
0
0
0
36, 196
0
0
0
21,682
o
0
0
7,241








80,726
7,241
73,485

1988
0
0
0
0
0
218
0
0
0
4,&67
0
0
0
16,397
0
0
0
31,538
0
0
0
21,314
0
0
0
7,241







--
81,374
7,341
74,133
SALES
1989
0
0
0
0
0
0
469
0
0
0
5,537
0
0
0
19,383
0
0
0
29,381
0
0
0
14,748
0
0
0
7,113
--





..
--
76,630
7,113
69,517
FORECASTS: DISC BRAKE PAOS FOR CARS, 1986-2000 	
{IN THOUSANDS)
1990
0
0
0
0
0
0
0
777
0
0
0
4,607
0
0
0
19,997
0
0
0
22,253
0
0
0
6,824
0
0
0
6,536
--






--
60,995
6,536
54,459
1991
0
0
0
0
0
0
0
0
1,064
0
0
0
3,936
0
0
0
19,457
0
0
0
18,619
0
0
0
7,074
0
0
0
6,344






--
56,495
6,344
50,151
1992
0
0
0
0
0
D
0
0
0
1,378
0
0
0
5,417
0
0
0
16,953
0
0
0
18,303
0
0
0
7,074
0
0
0
7,113
""

""



--
56,239
7,113
49, 126
1993
0
0
0
0
0
0
0
0
0
0
1,635
9
0
0
6,404
0
0
0
15,794
0
0
0
12,665
0
0
0
6,949
0
0
0
7,561

—
"



51,008
7,561
43,446
1994
0
0
0
0
0
0
0
0
0
0
0
1,360
0
0
0
6,607
0
0
fj
11,962
0
0
0
5,860
0
0
0
6,386
0
0
0
7,049

~ ~
"

--
39,224
7,049
32,175
1995
0
0
0
0
0
0
0
0
0
0
0
0
1,162
0
0
0
6,428
0
0
0
10,009
0
0
0
6,075
0
0
0
6,198
0
0
0
6,792




36,665
6,792
29, 872
1996
0
0
0
0
0
0
0
0
0
0
0
0
0
1,600
0
0
0
5,601
0
0
0
9,839
0
0
0
6,075
0
0
0
6,949
0
0
0
7,305



37,369
7,305
30,064
1997
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,891
0
0
0
5,218
0
0
0
6,808
0
0
0
5,968
0
0
0
7,388
0
0
0
7,946


35,218
7,946
27,272
1998
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,951
0
0
0
3,952
0
0
0
3,150
0
0
0
5,484
0
0
0
6,887
0
0
0
7,690

29,113
7,690
21,424
1999
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,898
0
0
0
3,307
0
0
0
3,266
0
0
o
5,323
0
0
o
6,636
0
0
0
7,241
27,670
7,241
20,429
2000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,654
0
0
0
3,251
0
0
0
3,266
0
o
0
5 968
0
o
0
7,137
0
0
0
?B,B36
7,561
21,275

-------
EXHIBIT F-t: OUTSTANDING STOCK OF  ASSESIQS  DRUM BRAKES IN  LOTs
. "~" 	 -
HQOEL
TEAR
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000

„„„ 	 ,„__„_.

— . _







NUHBER OF ASBESTOS DRW BRAKE PADS IN IDTs ESTIMATED
--.,,.-...,.„.. flu Ylfrtfreiiuise**
1985
0
188
230
301
346
602
796
1,027
1,595
2,377
4,669
4,661
5,792
6,707
9,532
7,236
7,072
6,188
7,694
8,854
9,889
7,419
9,962
12,334
13,716
14,676
8,352
8,300
8,724
9,481
13,748
15,919






1986
0
Q
169
226
256
439
601
774
1,206
1,842
3,676
3,692
4,665
5,470
7,949
6,108
6,078
5,393
6,795
7,904
8,968
6,865
9,338
11,726
13,216
14,281
8,176
8,163
8,617
9,376
13,652
15,855
16,687






1987
0
0
g
166
192
325
438
585
909
1,392
2,848
2,907
3,695
4,405
6,482
5,093
5,130
4,635
5,923
6,980
8,005
6,226
8,641
10,990
12,564
13,761
7,956
7,991
8,474
9,261
13,500
15,744
16,620
15,326






1988
0
0
o
141
244
325
427
686
1,049
2,153
2,252
2,909
3,490
5,221
4,154
4,278
3,913
5,090
6,084
7,070
5,557
7,835
10, 170
11,776
13,082
7,666
7,776
8,296
9,107
13,334
15,569
16,503
15,265
13,669






1989
0
0

0
179
244
316
501
792
1,623
1,702
2,254
2,747
4,136
3,345
3,489
3,263
4,297
5,228
6,162
4.908
6,994
9,222
10,897
12,262
7,288
7,492
8,073
8,915
13,113
15,378
16,320
15,158
13,615
11.445




~ ~

1990
0
0
0
0
0
179
237
371
578
1,225
1,283
1,703
2,128
3,256
2,650
2,810
2,661
3,583
4,414
5,295
4,278
6,177
8,232
9,882
11,346
6,831
7,123
7,778
8,676
12,837
15,123
16, 120
14,989
13,519
11,400
8,839



--
-,

1991
0
0
0
0
0
0
0
174
278
428
894
969
1,284
1,609
2,522
2,086
2,226
2,143
2,922
3,680
4,470
3,676
5,384
7,270
8,821
10,289
6,32!
6,676
7,395
8,359
12,492
14,804
15,853
14,805
13,369
11,319
8,804
6,808

..

-.


'O'«l- 208,390 2UH.I6T zo?,164 205,090 201,357 195,522 188 131 1








1992
0
0
0
0
0
0
0
0
204
321
662
707
970
1,213
1,906
1,616
1,752
1,697
2,353
3,001
3,727
3,103
4,627
6,337
7,790
9,184
5,732
6,178
6,931
7,947
12,037
14,407
15,519
14,560
13,205
11,194
8,742
6,781
5,624
,,
..




1993 1994
0 0
0 0
0
0
0
0
0
0
0
236
497
524
708
916
1,437
1.222
1,358
1,336
1,864
2,417
3,040
2,588
3,906
5,446
6,790
8,111
5,117
5,602
6,414
7,449
11,443
!3.881
15,102
14,253
12,986
11,056
8,644
6,733
5,602
4,004






80,027 170,679


0
0
0
0
0
0
0
0
364
393
524
668
1,085
921
1,026
1,035
1,467
1,915
2,448
2,110
3,257
4.597
5,835
7,070
4,519
5,001
5,816
6,893
10,725
13,197
14,551
13,870
12,713
10.873
8,538
6,658
5,562
3,988
1,928

_ ,




159,548


TO 8E IB
:> IN I.UI



OPERATION BY HOOEL VE«R
1995 1996 1997 1998
0 0 0 o
0 n n n
0
0
0
0
0
0
0
0
0
288
393
495
792
695
774
783
1,137
1,507
1,939
1,700
2,656
3,833
4,f26
6,076
3,939
4,416
5,192
6,250
9,925
12,369
13,834
13,364
12,371
10,644
8,397
6,577
5,500
3,960
1,920
Q






146,651
	
0 n n
0
0
0
0
0
0
0
0
0
288
371
5B7
507
584
590
859
1,168
1,527
1,346
2,13f
3,126
4,107
5,129
3,385
3,849
4,585
5,579
9,000
11,446
12,966
12,705
11,920
10,358
8,220
6,468
5,433
3,916
1,907

0




134,065

0
0
0
0
0
0
Q
0
0
0
272
440
376
426
445
648
883
1,183
1,060
1,694
2,518
3,349
4,277
2,857
3,308
3,996
4,927
8,034
10,379
11,998
11,908
11,332
9,980
7,999
6,331
5,343
3,868
1,886
0
0
0

" "

121,719

0
0
0
0
0
Q
0
0
0
0
0
323
282
316
325
489
665
894
821
1,334
1,994
2,698
3,488
2,383
2,792
3,434
4,295
7,095
9,265
10,880
11,020
10,621
9,488
7,708
6,161
5,230
3,804
1,863
0
0
0
0

,.
109,667
	 .
....
1999
0
0
0
0
0
0
0
0
0
0
0
0
0
0
207
237
241
357
502
674
621
1,033
1,570
2,137
2,809
1,943
2,328
2,899
3,691
6,184
8,182
9,712
9,993
9,828
8,893
7.327
5,937
5,090
3,724
1,832
0
0
0
0
0

97,951



2000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
174
181
264
367
509
468
781
t,216
1,682
2,225
1,565
1,899
2,417
3,116
5,514
7,132
8,577
8,920
8,912
8,229
6,868
5,644
4,904
3,624
1,793
0
0
0
0
0
0
86,781

-------
EXHIBIT F•?; FUTURE SALES OF  ASBESIQS DRUM BRAKES  TOR  LDIs
— „,_ — : — -— ~~ —
MODEL
TEW

1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000

IOTAI SAIES:
MEW SALES:
REPLACEMEHT SALES:

— 	
	 	 	







SALES FOREGASFSt DRUM BRAKE PADS FOR LIGHT DUTY
	 	 	 { IH THOUSAMJSi
1985

301
0
0
0
1,027
0
0
0
4,661
0
0
0
7,236
0
0
0
8,854
0
0
0
12,334
0
0
0
8,300
0
0
0
15,919

'.'.




58,633
15,919
42,714
1986
"
o
256
0
0
0
1,206
0
0
0
4,665
0
0
0
6,078
0
0
0
8,968
0
0
0
13,216
0
0
0
8,617
0
0
0
16,687






59,692
16,687
43,005
1987

0
325
0
0
0
1,392
0
0
0
4,405
0
0
0
4,635
0
0
0
6,226
0
0
0
13,761
0
0
0
9,261
0
0
0
15,326






55,331
15,326
40,004
1988

0
0
325
0
0
0
2,153
0
0
0
5,221
0
0
0
5,090
0
0
0
7.835
0
0
0
7,666
0
0
0
13,334
0
0
0
13,669






55,293
13,669
41,624
1989

0
0
0
0
316
0
0
0
1,702
0
0
0
3,345
0
0
0
5,228
0
0
0
9,222
0
0
0
7,492
0
0
0
15,378
0
0
0
11,445

--

" -
- .

54,129
11,445
42,684
1990

0
0
0
0
0
371
0
0
0
1,703
0
0
0
2,810
0
0
0
5,295
0
0
0
9,882
0
0
0
7,778
0
0
0
16,120
0
0
0
8,839

--
-•



52,798
8,839
43,959
1991

0
0
0
0
0
0
428
0
0
0
1,609
0
0
0
2,143
0
0
0
3,676
0
0
0
10,289
0
0
0
8,359
0
0
0
14,805
0
0
0
6,808


,,
--
• -

48,118
6,808
41,310
1992

0
0
0
0
0
0
0
662
0
0
0
1,906
0
0
0
2,353
0
0
8
4,627
0
0
0
5,732
0
0
0
12,037
0
0
0
13,205
0
0
0
5,624
""

..



46,146
5,624
40,522
1993

0
0
0
0
0
0
0
0
524
0
0
0
1,222
0
0
0
2,417
0
0
0
5,446
0
0
0
5,602
0
0
0
13,881
0
0
0
11.056
0
0
0
4,004

..




44,152
4,004
40, 148

TRUCKS,
1994

0
0
0
0
0
0
0
0
0
524
0
0
0
1,026
0
0
0
2,448
0
0
0
5,835
0
0
0
5,816
0
0
0
14,551
0
0
0
8,538
0
0
0
1,928





40,667
1,928
38.739

1986 2080
1995

0
0
0
0
0
0
0
0
0
0
495
0
0
0
783
0
0
0
1,790
0
0
0
6,076
0
0
S»
6,250
0
0
0
13,364
0
0
0
6,577
0
0
0
0




35,244
0
35,244


1996

0
0
0
0
0
0
0
a
0
0
0
587
0
0
0
859
0
0
0
2,139
0
0
0
3,385
0
0
0
9,000
0
0
0
11,920
0
0
0
5,433
0
0
0




33,322
n
33,322

	
1997

0
0
0
0
0
0
0
0
0
0
0
0
376
0
0
0
883
0
0
0
2,518
0
0
0
3,308
0
0
0
10,379
0
0
0
9,980
0
0
0
3,868
0
0
0



31,312
31,312

7°_ .——_,..„
1998

0
0
0
0
0
0
0
0
0
0
0
0
0
316
0
0
0
894
0
0
0
2,698
0
0
0
3,434
0
0
0
10,880
0
0
0
7,708
0
0
5
1,863
0
0
0
0

27,792
0
27, 792


1999

0
0
0
0
0
0
0
0
0
0
0
0
0
0
24 1
0
0
0
621
0
0
0
2,809
0
0
0
3,691
0
0
0
9,993
0
0
0
5,937
0
n
fl
0
0
0
0
0
23,290
0
23.290


2000

0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
264
0
0
0
78 1
0
0
0
1,565
0
0
0
5,314
0
0
0
8,912
0
0
0
4,904

0
0
0
0
0
21,741
0
?i,741

-------
EXHIBIT G-1: OO1STM10ING STOCK OF ASBESTOS DISC BRAKES  IN  LOTs
1 ' 	 	 ' 	 	 —_ ™ 	 	 ._m_^_
HOTEL
YEAR
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000

IOTAL
1985
0
0
0
0
0
0
0
0
0
0
0
0
58
104
300
1,118
2,793
3,253
5,501
6,574
7,593
6,628
9,534
12,138
13,716
14,676
8,352
8,300
7,241
6,587
7,485
5,993




--


--
-•

127,944
1986
0
0
0
0
0
. 0
0
0
0
0
0
0
47
85
250
943
2,401
2,835
4,859
5,869
6,886
6,133
8,936
11,540
13,216
14,281
8,176
8,163
7,152
6,514
7,433
5,969
2,706


. ,





--

124,391
1987
0
0
0
0
0
0
0
0
0
0
0
o
37
68
204
787
2,026
2,437
4,235
5,183
6,146
5,561
8,269
10,816
12,564
13,761
7,956
7,991
7,034
6,434
7,350
5,927
2,695
2,237








-.

119,717
1988
0
0
0
0
0
0
0
n
n
0

29
54
164
642
1,690
2,057
3,639
4,517
5,428
4,964
7,498
10,008
11,776
13,082
7,666
7,776
6,886
6,327
7,260
5,861
2,676
2,228
1,710





..

..


113,939
NUMBER OF ASBESTOS DISC BRAKE PADS
1989 1990 1991 1992
0
0
0
0
0
0
0




23
43
130
517
1,378
1,715
3.072
3,882
4,731
4,384
6,693
9,076
10,897
12,262
7,288
7,492
6,700
6,194
7,140
5,789
2,646
2,212
1,703
1,114










107,081
0
0
0
0
0
0
0

0


17
• 33
102
409
1,110
1,399
2,562
3,277
4,066
3,821
5,911
8,101
9,882
11,346
6,831
7,123
6,456
6,027
6,989
5,693
2,614
2,188
1,691
1,109
516










99,274
0
0
0
0
0
0
0
0
0
0
0
0
13
25
79
322
879
1,127
2,089
2,733
3,432
3,284
5,152
7,155
8,821
10,289
6,321
6,676
6,138
5,808
6,801
5,573
2,571
2,161
1,672
1,101
514
0

- .
* ~






90,736
0
0
0
0
0
0
0
0
0
0
0
0
10
19
60
250
692
892
1.683
2,228
2,862
2,772
4,428
6,236
7,790
9,184
5,732
6,178
5,753
5,521
6,553
5,424
2,517
2,125
1,652
1,089
510
0
0

* *
..

""
""


82,159
l»l LOTs ESTIMATED TO BE IK OPERATION
(IN THOUSANDS)
1993 1994 1995 1996
0
0
0
0
0
0
0
0
0
0
0
0
7
14
45
189
536
703
1,333
1,795
2,334
2,312
3,738
5,359
6,790
8,111
5,117
5,602
5,323
5,175
6,230
5,226
2,449
2,080
1,625
1,076
505
0
0
0



" "



73,672
0
0
0
0
0
0
0
0
0
0
0
0
5
10
34
142
405
544
1,049
1,422
1,880
1,885
3,117
4,524
5,835
7,070
4,519
5,001
4,827
4,789
5,839
4,968
2,360
2,024
1,590
1,058
498
0
0
0
0






65,396
0
0
0
0
0
0
0
0
0
0
0
0
4
8
25
107
306
411
813
1,119
1,489
1,518
2,542
3,772
4,926
6,076
3,939
4,416
4,309
4,342
5,404
4,657
2,243
1,950
1,548
1,036
490
0
0
0
0
0





57,449
0
0
0
0
0
0
0
0
0
0
0
0
3
6
18
78
231
310
614
867
1,172
1,203
2,047
3,076
4,107
5,129
3,385
3,849
3,806
3,876
4,900
4,309
2,103
1,854
1,491
1,008
480
0
0
0
0
0
0



"
49,922
BY MOOil
1997
0
0
0
0
0
0
0
0
0
0
0
0
0
4
14
58
168
234
463
655
908
947
1,622
2,478
3,349
4,277
2,857
3,308
3,317
3,423
4,374
3,907
1,*946
1,738
1,418
971
467
0
0
0
0
0
0
0
--

""
42,903
YEAR
1998
0
0
0
0
0
0
0
0
0
0
0
0
0
0
10
44
125
171
350
494
686
734
1,277
1,963
2,698
3,488
2,383
2,792
2,850
2,984
3,863
3,488
1,764
1,608
1,329
923
450
0
0
0
0
0
0
0
0


36,472
1999
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
32
94
127
255
373
517
554
989
1,545
2,137
2,809
1,943
2,328
2,406
2,564
3,367
3,080
1,575
1,458
1,229
865
428
0
0
0
0
0
0
0
0
0

30,677
2000
0
0
0
0
0
0
0
0
0
0
o
0
0
0
0
0
69
95
189
272
391
418
748
1,197
1,682
2,225
1,565
1,899
2,006
2,165
2,893
2,685
1,391
1,302
1,115
801
401
0
Q
0
o
0
0
0
0
0
0
25,508

-------
EXHIBIT G-2:FUTURE SALES OF  ASBESTOS DISC BRAKES FOR  LDTs
SALES FORECASTS: DISC
HGOEL
TEAR
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
196?
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
TOTAL SALES:
NEW SALES:
REPLACEMENT SALES:
BRAKE PAOS FOR UGHT DUTY TRUCKS, 1986-2000
(IN THOUSANDS)
1985
0
0
0
0
0
0
0
0
0
0
0
0
1,118
0
0
0
6,574
0
0
0
12,138
0
0
0
8,300
0
0
0
5,993




--










34,123
5,993
28,130
1986
0
0
0
0
0
0
0
0
0
47
0
0
0
2,401
0
0
0
6,886
0
0
0
13,216
0
0
0
7,152
0
0
0
2.706
..
•-

--

--
•-

,.
--




32,407
2,706
29,701
1987
0
0
0
0
0
0
0
0
0
0
68
0
0
0
2,437
0
0
0
5,561
0
0
0
13,761
0
0
0
6,434
0
0
0
2,237








--


•-

30,497
2,237
28,261
1988
0
0
0
0
0
0
0
0
0
0
0
164
0
0
0
3,639
0
0
0
7,498
0
0
0
7,666
0
0
0
7,260
0
0
0
1,710

-•
--
--

--




--

27,938
1,710
26,228
1989
0
0
0
0
0
0
0
0
0
0
0
0
517
0
0
0
3,882
0
0
0
9,076
0
0
0
7,492
0
0
0
5,789
0
0
0
1,114
--

--
--
-•
--
..


--
--
27,870
1,114
26,756
1990
0
0
0
0
0
0
0
0
0
17
0
0
0
1,110
0
0
0
4,066
0
0
0
9,882
0
0
0
6,456
0
0
0
2,614
0
0
0
516

--
-•
--
--
--
- - .

--

24,661
516
24,145
1991
0
0
0
0
0
0
0
0
0
0
25
0
0
0
1,127
0
0
0
3,284
0
0
0
10,289
0
0
0
5,808
0
0
0
2,161
0
0
0
0
..
--
,,
--
--

..
,,
--
22,693
0
22,693
1992
0
0
0
0
0
0
0
0
0
0
0
60
0
0
0
1,683
0
0
0
4,428
0
0
0
5,732
0
0
0
6,553
0
0
0
1,652
0
0
0
0
..
--
-.
- -
,-

-.
--
20, 107
0
20,107
1993
0
0
0
0
0
0
0
0
0
0
0
0
189
0
0
0
1,795.
0
0
0
5,359
0
0
0
5,602
0
0
0
5,226
0
0
0
1,076
0
0
0
0
.,
--
-.


• -
--
19,246
0
19,246
1994
0
0
0
0
0
0
0
0
0
5
0
0
0
405
0
0
0
1,880
0
0
0
5,835
0
0
0
4,827
0
0
0
2,360
0
0
0
498
0
0
0
0
..



,.
•'
15,811
0
15, ati
1995
0
0
0
0
0
0
0
0
0
0
8
0
0
0
411
0
0
0
1,518
0
0
0
6,076
0
0
0
4,342
0
0
0
1,950
0
0
0
0
0
0
0
0
..



•-
14,306
0
14,306
1996
0
0
0
0
0
0
0
0
0
0
0
18
0
0
0
614
0
0
0
2,047
0
0
0
3,385
0
0
0
4,900
0
0
0
1,491
0
0
0
0
0
0
0
0



--
12,456
0
12,456
1997
0
0
0
0
0
0
0
0
0
0
0
0
58
0
0
0
655
0
0
0
2,478
0
0
0
3,308
0
0
0
3,907
0
0
0
971
0
0
0
0
0
0
0
0


..
11,378
0
11,378
1998
0
0
0
0
0
0
0
0
0
0
0
0
0
125
0
0
0
686
0
0
0
2,698
0
0
0
2,850
0
0
0
1,764
0
0
0
450
0
0
0
0
0
0
0
0

--
8,574
0
8,574
1999
0
0
0
0
0
0
0
0
o
0
o
0
0
0
127
0
0
0
554
0
0
0
2,809
0
0
0
2,564
0
0
0
1,458
0
0
0
0
0
0
0
0
0
0
o
0

7,512
0
7,512
2000
o
0
0
0
0
0
0
0
0
0
0
0
0
0
0
189
0
0
0
748
0
0
0
1,565
0
0
0
2,893
0
0
0
1,115
0
0
0
0
0
0
0
0
0
o
0
0
6,510
0
6,510

-------
EXHiill H-1: OUTSTANDING STOCK OF ASBESTOS ORUN BRAKES IN CARS
	 	 .:•_•; 	 	 _.. 	 	
MODEL
YEAR
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000

TQTAt
1985
0
2,009
3,285
4,388
5,434
8,107
9,834
13,699
13,886
18,773
22,345
24,109
21,162
29, 125
34,940
38,012
38,408
34,008
32,156
29,288
29,321
37,444
37,543
--
--




--

487,277
1986
0
0
2,314
3,114
4,011
6,080
7,392
10,206
10,480
14,255
17,291
19,211
17,589
25,726
32,108
35,634
36,844
33,086
31,564
28,962
29,115
37,331
37,468
37,588






'•-

477,367
1987
0
0
0
2,194
2,847
4,488
5,544
7,672
7,808
10,758
13,129
14,866
14,015
21,381
28,360
32,746
34,538
31,738
30,708
28,428
28,790
37,068
37,355
37,512
34,637






--

466,584
1988
0
g
o
o
2,006
3,185
4,092
5,754
5,869
8,015
9,909
11,288
10,845
17,037
23,571
28,923
31,739
29,753
29,457
27.658
28,260
36,656
37,092
37,400
34,568
30,308

..




--

453,383
NUMBER OF ASBESTOS DRUM SRAKE PADS (K CARS ESTIMATED TO BE IN OPERATION
ON THOUSANDS)
1989 1990 1991 W""*,^ 	 W4 	 1995"""""l996
0
Q
0
Q
0
2,244
2,904
4,247
4,402
6,025
7,382
8,519
8,235
13,184
18,782
24,039
28,034
27,341
27,614
26,531
27,494
35,980
36,679
37. 137
34,464
30,247
25,518



..




437,001
0


g
e
2,046
3,014
3,249
4,518
5,549
6,347
6,215
10,011
14,534
19,155
23,300
24,150
25,376
24.871
26,374
35,005
36,004
36,723
34,222
30,156
25,467
19,541








415,825
0



0
0
2,123
2,306
3,335
4,162
4,771
4,630
7,555
11,036
14,823
18,566
20,071
22,414
22,855
24,724
33,579
35,027
36,046
33,841
29,944
25,391
19,502
15,173








391,874
0
0
0
0
0
0
0
1,624
2,367
3,072
3,578
3,480
5,629
8,329
11,255
14,367
15,993
18,629
20,187
22,720
31,478
33,601
35,069
33,217
29,611
25,212
19,441
15,143
12,759
""
""






366,763
0
0
0
0
0
0
0
0
0
1,668
2,180
2,641
2,610
4,231
6,205
8,494
10,909
12,376
14,844
16,778
20,068
28,927
31,498
33,64!
32,317
29,065
24,931
19,306
15,097
12,734
9,042
~ "
~ "
""




339,563
0
0
0
0
0
0
0
0
0
0
1,536
1,874
1,927
3,173
4,664
6,328
8,233
9,397
11,487
13,369
16,679
25,550
28,945
31,536
31,000
28,277
24,472
19,091
14,991
12,695
9,024
4,215
• •



..

308,466
0
0
0
0
0
0
0
0
0
0
0
1,320
1,367
2,342
3,498
4,757
6,134
7,092
8,722
10,346
13,290
21,236
25,567
28,980
29,061
27,125
23,808
18,740
14,824
12,606
8,997
4,206
0
--




274,019
0
0
0
0
0
0
0
0
0
0
0
0
963
1,662
2,582
3,568
4,611
5,284
6,583
7,856
10,284
16,921
21,249
25,597
26,705
25,428
22,839
18,232
14,551
12,466
8,934
4,194
0
0



"
240,507
BY MOOEl
1997
0
0
0
0
0
0
0
0
0
0
0
0
0
1,171
1,832
2,633
3,458
3,972
4,904
5,929
7,809
13,094
16,932
21,275
23,588
23,367
21,410
17,489
14,156
12,236
8,834
4,164
0
0
0
..
••

208,254
VEAR
1998
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,291
1,869
2,552
2,979
3,686
4,417
5,894
9,942
13,102
16,952
19,605
20,639
19,675
16,395
13,580
11,904
8,672
4,118
0
0
0
0
--

177,272
1999
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,317
1,811
2,199
2,765
3.320
4,391
7,504
9,949
13,118
15,621
17,154
17,378
15,066
12,730
11,419
8,437
4,042
0
0
0
0
0

148,220
2000
o
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,276
1,560
2,041
2,490
3,300
5,590
7,509
9,961
12,088
13,669
14,443
13,307
11,698
10,705
8,093
3,932
0
0
0
0
0
0
121,663
	 ~ 	 — 	 . 	 	 	 	

-------
EX"J8IT H-2: FUTURE SALES OF AS8ESIOS  DROH  BRAKES  FOR CARS
- - - 	 	 • - 	 — — — 	 ~ 	 	 	 	
SALES FORECASTS:
MODEL
TEAR
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
TOTAL SALES:
»EU SALES:
REPLACEMENT SALES:

1985
0
0
3,285
0
0
0
9,834
0
0
0
22,345
0
0
0
34,940
0
0
0
32,156
0
0
0
37,543





..
	



140,102
37,543
102,560

19B6
0
0
0
3,114
0
0
0
10,206
0
0
0
19,211
0
0
0
35,634
0
0
0
28,962
0
0
0
37,588









--
134,714
37,588
97,127

1987
0
0
0
0
2,847
0
0
0
7,808
0
0
0
14,015
0
0
0
34,538
0
0
0
28,790
0
0
0
34,637









--
122,635
34,637
87,998

1988
0
0
0
0
0
3,185
0
0
0
8,015
0
0
0
17,037
0
0
0
29,753
0
0
0
36,656
0
0
0
30,308









--
124,952
30,308
94,645

1989
0
0
0
0
0
0
2,904
0
0
0
7,382
0
0
0
18,782
0
0
0
27,614
0
0
0
36,679
0
0
0
25,518
- -








•-
118,879
25,518
93,361

1990
0
0
0
0
0
0
0
3,014
0
0
0
6,347
0
0
0
19,155
0
0
0
24,«71
0
0
0
36,723
0
0
0
19,541


" *
"
"



•'
109,650
19,541
90,109
DRUM BRAKE UNIXGS FOR CASS, 1986-2000
(IN
1991
0
0
0
0
0
0
0
0
2,306
0
0
0
4,630
8
0
0
18,566
0
0
0
24,724
0
0
0
33,841
0
0
0
15,173
--



~ -
~ ™

--
99,239
15,173
84,066
THOUSAHDS)
1992
0
0
0
0
0
0
0
0
0
2,367
0
0
0
5,629
0
0
0
15,993
0
0
0
31,478
0
0
0
29,611
0
0
0
12,759




- -

--
97,837
12,759
85,077
1993
0
0
0
0
0
0
0
0
0
0
2,180
0
0
0
6,205
0
0
0
14,844
0
0
0
31,498
0
0
0
24,931
0
0
0
9,042





..
88,701
9,042
79,658

1994
0
0
0
0
0
0
0
0
0
0
0
1,874
0
0
0
6,328
0
0
0
13,369
0
0
0
31,536
0
0
0
19,091
0
0
0
4,215
--




76,414
4,215
72,199

1995
0
0
0
0
0
0
0
0
0
0
0
0
1,367
0
0
0
6,134
0
0
0
13,290
0
0
0
29,061
0
0
0
14,824
0
0
0
0



--
64,676
0
64,676

1996
0
0
0
0
0
0
0
0
0
0
0
0
0
1,662
0
0
0
5,284
0
0
0
16,921
0
0
0
25,428
0
0
0
12,466
0
0
0
0
-•
--
::
61,761
0
61,761

1997
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,832
0
0
0
4,904
0
0
0
16,932
9
0
0
21,410
0
0
0
8,834
0
0
0
0
••

53,912
0
53,912

1998
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,869
0
0
0
4,417
0
0
0
16,952
0
0
0
16,395
0
0
0
4,118
0
0
0
0

43,750
0
43,750

1999
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,811
0
0
0
4,391
0
0
0
15,621
0
0
0
12,730
0
0
0
0
0
0
0
0
34,554
0
34,554

2000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,560
0
0
0
5,590
0
0
0
13,669
0
o
0
10,705
0
0
0
0
0
0
0
0
31,524
0
31,524

-------
EXHIBIT 1-1: OUfSTAWIHG STOCK OF  ASBESTOS CISC BRAKES  IN CARS
t 	 — — 	 	 	 - 	
HODEL
YEAR
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
19F7
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000

TOTAL
NUMBER Of ASBESTOS OISC BRAKE PADS !« MRS ESTIMATED TO BE IN OPERATION
(IN THOUSANDS)
1985
0
0
0
90
174
554
1,588
3,533
6,406
10,931
16,758
17,500
17,990
28,032
36,058
39,685
40,252
36,048
34,214
25,865
21,959
22,098
15,095









--

374,828
1986
0

64
128
415
1,193
2,632
4,835
8,300
12,968
13,944
14,952
24,760
33,136
37,201
38,612
35,071
33,584
25,913
21,926
21,707
15,065
6,985











353,391
1987
0

45
91
307
895
1,978
3,602
6,264
9,847
10,791
11,914
20,578
29,268
34,186
36, 196
33,643
32,673
25,436
21,682
21,554
15,019
6,971
5,793











328,733
1988
0
0
0
64
218
661
1,484
2,707
4,667
7,432
8,194
9,220
16,397
24,325
30,196
33,263
31,538
31,342
24,746
21,282
21,314
14,914
6,950
5,781
4,345











301,038
1989
0
0
0
0
153
469
1,095
2,031
3,508
5,537
6,184
7,000
12,689
19,383
25,097
29,380
28,982
29,381
23,738
20,705
20,921
14,748
6,901
5,764
4,336
2,845



"







270,846
1990
0
0
0
0
0
330
777
1,499
2,631
4,162
4,607
5,283
9,635
14,999
19,997
24,418
25,599
27,000
22,253
19,862
20,354
14,476
6,824
5,723
4,323
2,839
1,307










238,900
1991
0
0
0
0
0
0
548
1,064
1,942
3,121
3,463
3,936
7,272
11,389
15,475
19,45?
21,276
23,848
20,450
18,619
19,525
14,084
6,698
5,660
4,292
2,831
1,305
0
• *

* *
"
"




206,253
1992
0
0
0
0
0
0
0
0
749
1,378
2,304
2,597
2,959
5,417
8,595
11,750
15,057
16,953
19,821
18,062
17,110
18,303
13,510
6,517
5,555
4,245
2,811
1,301
0
0


• •

..



174,995
1993
0
0
0
0
0
0
0
0
0
971
1,635
1,917
2,219
4,072
6,404
8,868
11,433
13,119
15,794
15,012
15,113
16,820
12,665
6,25!
5,405
4,166
2,780
1,292
0
0
0
•-




"

145,934
1994
0
0
0
0
0
0
0
0
0
0
1,152
1,360
1,638
3,054
4,813
6,607
8,628
9,961
12,222
11,962
12,561
14,857
11,638
5,860
5,185
4,054
2,729
1,277
0
0
0
0


• •

* ~

119,557
1995
0
0
0
0
0
0
0
0
0
0
0
958
1,162
2,254
3,610
4,966
6,428
7,518
9,280
9,257
10,009
12,348
10,280
5,385
4,860
3,888
2,655
1,254
0
0
0
0
0





96,112
1996
0
0
0
0
0
0
0
0
0
0
0
0
819
1,600
2,665
3,725
4,832
5,601
7,004
7,029
7,745
9,839
8,544
4,757
4,466
3,645
2,546
1,220
0
0
0
0
0
0




76,035
BY MODEL
1997
0
0
0
0
0
0
0
0
0
0
0
0
0
1,127
1,891
2,749
3,624
4,210
5,218
5,305
5,881
7,614
6,808
3,953
3,945
3,350
2,387
1,170
0
0
0
0
0
0
0
--


59,231
1EHK
1998
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,332
1,951
2,675
3,158
3,922
3,952
4,438
5,781
5,268
3,150
3,279
2,959
2,194
1,097
0
0
0
0
0
0
0
0
•-

45,155

1999
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,375
1,898
2,331
2,942
2,971
3,307
4,363
4,000
2,438
2,613
2,459
1,938
1,008
0
0
0
0
0
0
0
0
0

33,640

2000
o
o
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,337
1,654
2,171
2,228
2,486
3,251
3,019
1,851
2,022
1,959
1 610
890
0
o
0
0
0
0
0
0
0
0
24,478

-------
EXHIBIT 1-2: FUTURE SALES OF  ASBESTOS DISC BRAKES  FOR  CARS
•"•"'• 	 	 I' 	 " 	 	 ™ 	 -- 	 ™-,™_->™™.,. 	 	 :, 	 	 „„.

Hooet
YEAR
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1983
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
TOTAL SALES:
MEW SALES:
REPLACEMENT SALES:




SALES
FORECASTS
: DISC BRAKE PADS
FOR CARS
, 1986-2000
UN THOUSANDS)
1985
0
0
0
0
0
0
1,588
0
0
0
16,758
0
0
0
36,058
0
0
0
34,214
0
0
0
15,095

..






--
103,713
15,095
88,618
1986
0
0
0
64
0
0
0
2,632
0
0
0
13,944
0
0
0
37,201
0
0
0
25,913
0
0
0
6,985






. ,


86,739
6,985
79,755
1987
0
0
0
0
91
0
0
0
3,602
0
0
0
11,914
0
0
0
36,196
0
0
0
21,682
0
0
0
5,793









79,278
5,793
73,485
1988
0
0
0
0
0
218
0
0
0
4,667
0
0
0
16,397
0
0
0
31,538
0
0
0
21,314
0
0
0
4,345








--
78,478
4,345
74,133
1989
0
0
0
0
0
0
469
0
0
0
5,537
0
0
0
19,383
0
0
0
29,381
0
0
0
14,748
0
0
0
2,845









72,362
2,845
69,517
1990
0
0
0
0
0
0
0
777
0
0
0
4,607
0
0
0
19,997
0
0
0
22,253
0
0
0
6,824
0
0
0
1,307









55,766
1,307
54,459
1991
0
0
0
0
0
0
0
0
1,064
0
0
0
3,936
0
0
0
19,457
0
0
0
18,619
0
0
0
5,660
0
0
0
0
,.






--
48,736
0
48,736
1992
0
0
0
0
0
0
0
0
0
1,378
0
0
, 0
5,417
0
0
0
16,953
0
0
0
18,303
0
0
0
4,245
0
0
0
0






--
46,297
0
46,297
1993
0
0
0
0
0
0
0
0
0
0
1,635
0
0
0
6,404
0
0
0
15,794
0
0
0
12,665
0
0
0
2,780
0
0
0
0
..
""



--
39,277
0
39,277
1994
0
0
0
0
0
0
0
0
0
0
0
1,360
0
0
0
6,607
0
0
0
11,962
0
0
0
5,860
0
0
0
1,277
0
0
0
0
""
*"


--
27,067
0
27,067
1995
0
0
0
0
0
0
0
0
0
0
0
0
1,162
0
0
0
6,428
0
0
0
10,009
0
0
0
4,860
0
0
0
0
0
0
0
0

..


22,459
0
22,459
1996
0
0
0
0
0
0
0
0
0
0
0
0
0
1,600
0
0
0
5,601
0
0
0
9,839
0
0
0
3,645
0
0
0
0
0
0
0
0


-,
20,685
0
20,685
1997
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,891
0
0
0
5,218
0
0
0
6,808
0
0
0
2,387
0
0
0
0
0
0
0
0

.,
16,304
0
16,304
1998
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,951
0
0
0
3,952
0
0
0
3,150
0
0
0
1,097
0
0
0
0
0
0
0
0

10,150
0
10,150
1999
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,898
0
0
0
3,307
0
0
0
2,613
0
0
0
0
0
0
0
0
0
0
0
0
7,817
. 0
7,817
2000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,654
0
0
0
3,251
0
0
0
1,959
0
0
0
0
0
0
0
0
0
0
0
0
6,864
0
6,864

-------
EXHIBIT j-1; OUTSfAHDINS STOCK OF ASBESTOS DRUM BRAKES IN IDTs
	 - - - :'"" ' 	 • 	 — — 	
NUMBER OF ASBESTOS DRUH BRAK6 PADS
MODEL
YEAR
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000

TOTAL
IN LOTs ESTIMATED TO BE IS
OPERATION
§T WOOEl
YEAR


,. 	 {IS THOUSANDS)
1985
0
188
230
301
346
602
796
1,027
1,595
2,377
4,669
4,661
5,792
6,707
9,532
7,236
7,072
6,188
7,694
8,854
9,889
7,419
9,962
12,334
13,716
14,676
8,352
8,300
8,724
9,481
13,74B
15,919







.-


208,390
1986
0
0
169
226
256
439
601
774
1,206
1,842
3,676
3,692
4,665
5,470
7,949
6,108
6,078
5,393
6,795
7,904
8,968
6,865
9,338
11,726
13,216
14,281
8,176
8,163
8,617
9,376
13,652
15,855
16,687



, „
	





208,161
1987
0
0
0
166
192
325
438
585
909
1,392
2,848
2,907
3,695
4,405
6,482
5,093
5,130
4,635
5,923
6,980
8,005
6,226
8,641
10,990
12,564
13,761
7,956
7,991
8,474
9,261
13,500
15,744
16,620
13,794

,_
,.
.,






205,632
1988
0
o
o
o
141
244
325
427
686
1,049
2,153
2,252
2,909
3,490
5,221
4,154
4,278
3,913
5,090
6,084
7,070
5,557
7,835
10,170
11,776
13,082
7,666
7,776
8,296
9,107
13,334
15,569
16,503
13,738
10,545










200,439
1989
0
Q

0
g
179
244
316
501
792
1,623
1,702
2,254
2,747
4,136
3,345
3,489
3,263
4,297
5,228
6,162
4,908
6,994
9,222
10,897
12,262
7,288
7,492
8,073
8,915
13,113
15,378
16,320
13,642
10,503
6,867








,.

192,151
1990
0

n
u
n
u
179
237
371
578
1,225
1,283
1,703
2,128
3,256
2,650
2,810
2,661
3,583
4,414
5,295
4,278
6,177
8,232
9,882
11,346
6,831
7,123
7,778
8,676
12,837
15,123
16,120
13,490
10,429
6,840
3,182










180,716
1991
0





174
278
428
894
969
1,284
1,609
2,522
2,086
2,226
2,143
2,922
3,680
4,470
3,676
5,384
7,270
8,821
10,289
6,321
6,676
7,395
8,359
12,492
14,804
15,853
13,325
10,313
6,792
3,169
0









166,625
1992
0
0
0



0
204
321
662
707
970
1,213
1,906
1,616
1,752
1,697
2,353
3,001
3,727
3,103
4,627
6,337
7,790
9,184
5,732
6,178
6,931
7,947
12,037
14,407
15,519
13,104
10,186
6,716
3,147
0
0
" "
"*






153,076
1993
0
0
0
0
0
0
0
0
0
236
497
524
708
916
1,437
1,222
1,358
1,336
1,864
2,417
3,040
2,588
3,906
5,446
6,790
8,111
5,117
5,602
6,414
7,449
11,443
13,881
15,102
12,828
10,018
6,634
3,112
n
0
0
• -

""




139,992
1994
0
0
0
0
0
0
0
0
0
0
364
393
524
668
1,085
921
1,026
1,035
1,467
1,915
2,448
2,110
3,257
4,597
5,835
7,070
4,519
5,001
5,816
6,893
10,725
13,197
14,551
12,483
9,807
6,524
3,074
0
0
0
0




""

127,305
1995
0
0
0
0
0
0
0
0
0
0
0
288
393
495
792
695
774
783
1,137
1,507
1,939
1,700
2,656
3,833
4,926
6,076
3,939
4,416
5,192
6,250
9,925
12,369
13,834
12,028
9,543
6,386
3,023
0
0
0
0
0





114,898
1996
0
0
0
0
0
0
0
0
0
0
0
0
288
371
587
507
584
590
859
1,168
1,527
1,346
2,139
3,126
4,107
5,129
3,385
3,849
4,585
5,579
9,000
11,446
12,966
11,435
9,195
6,215
2,959
0
0
0
0
0
0



.,
102,943
1997
0
0
0
0
0
0
0
0
0
0
0
0
0
272
440
376
426
445
648
883
1,183
1,060
1,694
2,518
3,349
4,277
2,857
3,308
3,996
4,927
8,034
10,379
11,998
10,718
8,742
5,988
2,880
0
0
0
0
0
0
0



91,398
1998
0
0
0
0
0
0
0
0
0
0
0
0
0
0
323
282
316
325
489
665
894
821
1,334
1,994
2,698
3,488
2,383
2,792
3,434
4,295
7,095
9,265
10,880
9,918
8,193
5,693
2,775
0
0
0
0
0
0
0
0
--

80,351
1999
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
207
237
241
357
502
674
621
1,033
1,570
2,137
2,809
1,943
2,328
2,899
3,691
6,184
8,182
9.712
8,993
7,582
5,336
2,638
0
0
0
0
0
0
0
0
0

69,876
2000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
\7i,
181
264
367
509
468
781
1,216
1,682
2,225
1,565
1,899
2,417
3,116
5,314
7,132
8,577
8,028
6,875
4,938
2,472
0
0
0
0
0
0
0
0
0
0
60,200

-------
EXHIBIT J-2: FUTURE SALES OF  ASBESTOS DRUM  BRAKES  rOR  IDTs
1 1 , J " -™-™*™__ — „____ , 	 „.. 	 	 . —
SALES FORECASTS: DRUM BRAKE PADS FOR LIGHI PUTT
MODEL
YEAR











TOTAL SALES:
NEW SALES:
REPLACEMENT
(IB THOUSANDS)
.......
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000


SALES:
1985
301
0
0
0
1,027
0
0
0
4,661
0
0
0
7,236
0
0
0
8,854
0
0
0
12,334
0
0
0
8,300
0
0
0
15,919




--
-.

--

58,633
15,919
42,714
1986
0
256
0
0
0
1,206
0
0
0
4,665
0
0
0
6,078
0
0
0
8,968
0
0
0
13,216
0
0
0
8,617
0
0
0
16,687

~ -



--

,.

59,692
16,687
43,005
1987
0
0
325
0
0
0
1,392
0
0
0
4,405
0
0
0
4,635
0
0
0
6,226
0
0
0
13,761
0
0
0
9,261
0
0
0
13,794





..,



53,798
13,794
40,004
1988
0
o
0
325
0
0
0
2,153
0
0
0
5,221
0
0
0
5,090
0
0
0
7,835
0
0
0
7,666
0
0
0
13,334
0
0
0
10,545








--
52, 169
10,545
41,624
1989
0
o
0
0
316
0
0
0
1,702
0
0
0
3,345
0
0
0
5,228
0
'0
0
9,222
0
0
0
7,492
0
0
0
15,378
0
0
0
6,867







..
--
49,551
6,867
42,684
1990
0
Q
0
0
0
371
0
0
0
1,703
0
0
0
2,810
0
0
0
5,295
0
0
0
9,882
0
0
0
7,778
0
0
0
!6,120
0
0
0
3,182









47,141
3,182
43,959
1991
0
0
0
0
0
428
0
0
0
1,609
0
0
0
2,143
0
0
0
3,676
0
0
0
10,289
0
0
0
8,359
0
0
0
13,325
0
0
0
0







--
39,829
0
39,829
1992
0
0
0
0
0
0
0
662
0
0
. 0
1,906
0
0
0
2,353
0
0
0
4,627
0
0
0
5,732
0
0
0
12,037
0
0
0
10,186
0
0
0
0







37,504
0
37,504
1993
0
0
0
0
0
0
0
0
524
0
0
0
1,222
0
0
2,417*
0
0
0
5,446
0
0
0
5,602
0
0
0
13,881
0
0
0
6,634
0
0
0
0
- -




--
35,725
0
35,725
TRUCKS, 1986-2000

1994
0
0
0
0
0
0
0
0
0
524
0
0
0
1,026
0
0
0
2,448
0
0
0
5,835
0
0
0
5,816
0
0
0
14,551
0
0
0
3,074
0
0
0
0
* •




33,274
0
33,274

1995
0
0
0
0
0
0
0
0
0
0
495
0
0
0
783
0
0
0
1,700
0
0
0
6,076
0
0
0
6,250
0
0
0
12,028
0
0
0
0
0
0
0
0


"'

27,331
0
27,331

1996
0
0
0
0
0
0
0
0
0
0
0
587
0
0
0
859
0
0
0
2,139
0
0
0
3,385
0
0
0
9,000
0
0
0
9,195
0
0
0
0
0
0
0
0



25,165
0
25,165

1997
0
0
0
0
0
0
0
0
0
0
0
0
376
0
0
0
883
0
0
0
2,518
0
0
0
3,308
0
0
0
10,379
0
0
0
5,988
0
0
0
0
0
0
0
0
--

23,452
0
23,452

1998
0
0
0
0
0
0
0
0
0
0
0
0
0
316
0
0
0
894
0
0
0
2,698
0
0
0
3,434
0
0
0
10,880
0
0
0
2,775
0
0
0
0
0
0
0
0
" *
20,996
0
20,996

1999
0
0
0
0
0
0
0
0
0
0
0
0
0
0
241
0
0
0
62 1
0
0
0
2,809
0
0
0
3,691
0
0
0
8,993
0
0
0
0
0
0
0
0
0
0
0
0
16,355
0
16,355

2000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
264
0
0
0
781
0
0
0
1,565
0
0
0
5,314
0
0
0
6,875
0
0
0
0
0
0
0
0
0
0
0
14,800
0
14,800

-------
EXHIBIT K-t: OUTSTAKDING STOCK OF ASBESTOS DISC BRAKES III LOTs
TTrrrrrrTT: 	 ~~ 	 	 	 	 	 •»- 	 	 	 	
NUHBER OF ASBESTOS DISC BRAKE PADS IH LDTs ESTIMATED
HOOEi
*EAR
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000

TOTAL
TO BE IK OPERATION
BY MODEL
	 {IN THQUSAWS)
1985
0
0
0
0
0
0
0
0
0
0
0
0
58
104
300
1,118
2,793
3,253
5,501
6,574
7,593
6,628
9,534
12,138
13,716
14,676
8,352
8,300
7,241
6,587
7,485
5,993







'..

--
..

127,944
1986
0
0
0
0
0
0
0
0
0
0
0
0
47
85
250
943
2,401
2,835
4,859
5,869
6,886
6,133
8,936
11,540
13,216
14,281
8,176
8,163
7,!52
6,514
7,433
5,969
2,706







,.




124,391
1987
0
0
0
0
0
0
0
0
0
0
0
0
37
68
204
787
2,026
2,437
4,235
5,183
6,146
5,561
8,269
10,816
12,564
13,761
7,956
7,991
7,034
6,434
7,350
5,927
2,695
1,864



,.

..






119,344
1988
0
0
0
0
p
0
0
0
o
0
0
0
29
54
164
642
1,690
2,057
3,639
4,517
5,428
4,964
7,498
10,008
11,776
13,082
7,666
7,776
6,886
6,327
7,260
5,861
2,676
1,857
950












112,808
1989
0
o
o
o
o
o
n
V
o
o
o
(J
o
23
43
130
517
1,378
1,715
3,072
3,882
4,731
4,384
6,693
9,076
10,897
12,262
7,288
7,492
6,700
6,194
7,140
5,789
2,646
1,843
946
o










,.

104,842
1990
0
g
g
0



0"

0

Q
17
33
102
409
1.110
1,399
2,562
3,277
4,066
3,821
5,911
8,101
9,882
11,346
6,831
7,123
6,456
6,027
6,989
5,693
2,614
1,823
940
n
V
0










96,533
1991
0










13
25
79
322
879
1,127
2,089
2,733
3,432
3,284
5,152
7,155
8,821
10,289
6,321
6,676
6,138
5,808
6,801
5,573
2,571
1,801
929

0
0









88,017
1992
0



0

0




10
19
60
250
692
892
1,683
2,228
2,862
2,772
4,428
6,236
7,790
9,184
5,732
6,178
5,753
5,521
6,553
5,424
2,517
1,771
918

0
0
0
""
""






79,472
1993
0
0
0
0
0
0
0
0
0
0
0
0
7
14
45
189
536
703
1,333
1,795
2,334
2,312
3,738
5,359
6,790
8,111
5,117
5,602
5,323
5,175
6,230
5,226
2,449
1,734
903
0
0
0
0
0


"•




71,023
1994
0
0
0
0
0
0
0
0
0
0
0
0
5
10
34
142
405
544
1,049
1,422
1,880
1,885
3,117
4,524
5,835
7,070
4,519
5,001
4,827
4,789
5,839
4,968
2,360
1,687
884
0
0
0
0
0
0



""


62,796
1995
0
0
0
0
0
0
0
0
0
0
0
0
4
a
25
107
306
411
813
1,119
1,489
1,518
2,542
3,772
4,926
6,076
3,939
4,416
4,309
4,342
5,404
4,657
2,243
1,625
860
0
0
0
0
0
0
0





54,910
1996
0
0
0
0
0
0
0
0
0
0
0
0
3
6
18
78
231
310
614
867
1,172
1,203
2,047
3,076
4,107
5,129
3,385
3,849
3,806
3,876
4,900
4,309
2,103
1,545
828
0
0
0
0
0
0
0
0



""
47,463
1997
0
0
0
0
0
0
0
0
0
0
0
0
0
4
14
58
168
234
463
655
908
947
1,622
2,478
3,349
4,277
2,857
3,308
3,317
3,423
4,374
3,907
1,946
1,448
788
0
0
0
0
0
0
0
0
0

--

40 , 546
TEAR

1998
0
0
0
0
0
0
0
0
0
0
0
0
0
0
10
44
125
171
350
494
686
734
1,277
1,963
2,698
3,488
2,383
2,792
2.850
2,984
3,863
3,488
1,764
1,340
738
0
0
0
0
0
0
0
0
0
0
--

34,240


1999
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
32
94
127
255
373
517
554
989
1,545
2,137
2,809
1,943
2,328
2,406
2,564
3,367
3,080
1,575
1,215
683
0
0
0
0
0
0
0
0
0
0
0

28,595


2000
0
0
0
0
0
0
g
0
0
0
0
0
0
0
0
0
69
95
189
272
391
418
748
1,197
1,682
2,225
1,565
1,899
2,006
2,165
2,893
2,685
1,391
1,085
619
0
0
o
0
0
0
0
0
0
0
0
0
23,594
	 — 	 — — ~ — — 	 	 	

-------
EXHIBIT K-2:FUTURE SALES OF ASBESTOS DISC  BRAKES  FOR  LDTs
1 - 	 - 	 :'.-.-.* 	 — 	 	 : 	 	
SALES FORECASTS: DISC BRAKE PADS FOR LIGHT BUf*
MODEL
YEAR
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
19?2
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
TOTAl SSIES;
NEU SRIES:
REPLACEMENT SALES:
	 	 	 
-------
EXHIBIT L-1: OUTSTAW1NG STOCK Of  ASBESTOS DRUM BRAKES !«  CARS
- - 	 , :". :'; , : 	 •.- . 	 	 —
MODEL
VEAR
1963
1964
1965
1966
196?
1968
1969
1970
1971
1972
19?3
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000

TOTAL
NUMBER OF ASBESTOS DRUM BRAKE PADS IN CARS ESTIMATED
	 (IN THOUSANDS)
1985
0
2,009
3,285
4,388
5,434
8,107
9,834
13,699
13,886
18,773
22,345
24,109
21,162
29,125
34,940
38,012
38,408
34,008
32,156
29,288
29,321
37,444
37,543

* „




,.




487,277
1986
0
o
2,314
3,114
4,011
6,080
7,392
10,206
10,480
14,255
17,291
19,211
17,589
25,726
32, 108
35,634
36,844
33,086
31,564
28,962
29,115
37,331
37,468
37,588
.,




	





477,367
1987
0
Q
o
2,194
2.847
4,488
5,544
7,672
7,808
10,758
13,129
14,866
14,015
21,381
28,360
32,746
34,538
31,738
30,708
28,428
28,790
37,068
37,355
37,512
31,174



.
..
.,



--

463,120
1988
0

Q
2,006
3,185
4,092
5,754
5,869
8,015
9,909
11,288
10,845
17,037
23,571
28,923
31,739
29,753
29,457
27,658
28,260
36,656
37,092
37,400
31,111
23,380











442,998
1989
0


0
2,244
2,904
4,24?
4,402
6,025
7,382
8,519
8,235
13,184
18,782
24,039
28,034
27,341
27,614
26,531
27,494
35,980
36,679
37,137
31,018
23,333
15,311











416,434
1990
0
0

0
0
2,046
3,014
3,249
4,518
5,549
6,347
6,215
10,011
14,534
19,155
23,300
24,150
25,376
24,871
26,374
35,005
36,004
36,723
30,799
23,263
15,280
7,035

"








382,817
1991
0
0

0
0
0
2,123
2,306
3,335
4,162
4,771
4,630
7,555
11,036
14,823
18,566
20,071
22,414
22,855
24,724
33,579
35,02?
36,046
30,457
23,100
15,234
7,021
0



""
...




343,835
1992
0
0
0
0
0
0
0
0
1,624
2,367
3,072
3,578
3,480
5,629
8,329
11,255
14.367
15,993
18,629
20,18?
22,720
31,478
33,601
35,069
29,895
22,842
15,127
7,000
0
0




" •
""


306,243
1993
0
0
0
0
0
0
0
0
0
1,668
2,180
2,641
2,610
4,231
6,205
8,494
10,909
12,376
14,844
16,778
20,068
28,927
31,498
33,641
29,085
22,422
14,959
6,950
0
0
0



-

* "

270,486
1994
0
0
0
0
0
0
0
0
0
0
1,536
1,874
1,927
3,173
4,664
6,328
8,233
9,397
11,48?
13,369
16,679
25,550
28,945
31,536
27,900
21,814
14,683
6,873
0
0
0
0






235,970
TO BE IN OPERATION
1995
0
0
0
0
0
0
0
0
0
0
0
1,320
1,367
2,342
3,498
4,757
6,134
7,092
8,722
10,346
13,290
21,236
25,567
28,980
26, 155
20,925
14,285
6,746
0
0
0
0
0
--




202,762
1996
0
0
0
0
0
0
0
0
0
0
0
0
963
1,662
2,582
3,568
4,611
5,284
6,583
7,856
10,284
16,921
21,249
25,597
24,035
19,616
13,703
6,563
0
0
0
0
0
0




171,077
B¥ KOOEl
1997
0
0
0
0
0
0
0
0
0
0
0
0
0
1,171
1,832
2,633
3,458
3,972
4,904
5,929
7,809
13,094
16,932
21,275
21,229
18,026
12,846
6,296
0
0
0
0
0
0
0



141,406
YEAR
1998
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,291
1,869
2,552
2,979
3,686
4,417
5,894
9,942
13,102
16,952
17,644
15,922
11,805
5,902
0
0
0
0
0
0
0
0
••

113,957

1999
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,317
1,811
2,199
2,765
3,320
4,391
7,504
9,949
13,118
14,059
13,233
10,427
5,424
0
0
0
0
0
0
0
»
0

89,5t6

2000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,276
1,560
2,041
2,490
3,300
5,590
7,509
9,961
10,880
10,544
8 666
4.791
0
0
0
0
0
0
0
0
0
0
68,608

-------
EXHIBIT L-2: FUTURE SALES OT  ASBESTOS D«UM  BRAKES  FOR  CARS
— ™~ — -_.~— — ...... 	 .. 	 ^___,__ — m™_mi^______,,___
SALES FORECASTS:
MODEL
YEAR











TOTAL SALES:
MEW SALES:
REPLACEMENT

	
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000



SALES;

1985
0
0
3,285
0
0
0
9,834
0
0
0
22,345
0
0
0
34,940
0
0
0
32,156
0
0
0
37,543










140,102
37,543
102,560

1986
0
0
0
3,114
0
0
0
10,206
0
0
0
19,211
0
0
0
35,634
0
0
0
28,962
0
0
0
37,588

..








134,714
37,588
97,127

1987
0
0
0
0
2,847
0
0
0
7,808
0
0
0
14,015
0
0
0
34,538
0
0
0
28,790
0
0
0
31,174




..



. _

119,172
31,174
87,998

1988
0
0
0
0
0
3,185
0
0
0
8,015
0
0
0
17,037
0
0
0
29,753
0
0
0
36,656
0
0
0
23,380










118,025
23,380
94,645

1989
0
0
0
0
0
0
2,904
0
0
0
7,382
0
0
0
18,782
0
0
0
27,614
0
0
0
36,679
0
0
0
15,311










108,672
15,311
93,361

1990
0
0
0
0
0
0
0
3,014
0
0
0
6,347
0
0
0
19,155
0
0
0
24,871
0
0
0
36,723
0
0
0
7,035










97, 144
7,035
90,109
DRUM BRAKE UUINGS FOR CARS, 1986-2000
(IN
1991
0
0
0
0
0
0
0
0
2,306
0
0
0
4,630
0
0
0
18,566
0
0
0
24,724
0
0
0
30,457
0
0
0
0









80,682
0
80,682
THOUSANDS)
1992
0
0
0
0
0
0
0
0
0
2,367
0
0
0
5,629
0
0
0
15,993
0
0
0
31,478
0
0
0
22,842
0
0
0
0








78,309
0
78,309
1993
0
0
0
0
0
0
0
0
0
0
2,180
0
0
0
6,205
0
0
0
14,844
0
0
0
31,498
0
0
0
14,959
0
0
0
0

~ ~





69,686
0
69,686
1994
0
0
0
0
13
0
0
0
0
0
0
1,874
0
0
0
6,328
0
0
0
13,369
0
0
0
31,536
0
0
0
6,873
0
0
0
0




* *

59,981
0
59,981
1995
0
0
0
0
0
0
0
0
0
0
0
0
1,367
0
0
0
6,134
0
0
0
13,290
0
0
0
26,155
0
0
0
0
0
0
0
0

—
—


46,946
0
46,946
1996
0
0
0
0
0
0
0
0
0
0
0
0
0
1,662
0
0
0
5,284
0
0
0
16,921
0
0
0
19,616
0
0
0
0
0
0
0
0



--
43,483
0
43,483
1997
0
0
0
0
0
0
0
0
0
0
0
0
• 0
0
1,832
0
0
0
4,904
0
0
0
16,932
0
0
0
12,846
0
0
0
0
0
0
0
0



36,514
0
36,514
1998
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,869
0
0
0
4,417
0
0
0
16,952
0
0
0
5,902
0
0
0
0
0
0
0
0


29,140
0
29, 140
1999
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,811
0
0
a
4,391
0
0
0
14,059
0
0
0
0
0
0
0
0
0
0
0
0

20,261
0
20,261
2000
0
0
0
0
0
0
8
0
0
0
0
0
0
0
0
0
0
1,560
0
0
0
5,590
0
0
0
10,544
0
0
0
0
0
0
0
0
0
0
0
0
17,695
0
17,695

-------
EXHiBiT M-1: OUTSTANDING STOCK OF AS8ESTOS DISC BRAKES  IN  CARS
• - — — 	 —— -^^
HUMBER OF ASBESTOS DISC BRAKE PADS
MODEL
YEAR
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000

TOTAL
I« CARS ESTIMATED TO BE IN OPERATION
8Y HQOEL
YEAR

	
	 {IN THOUSANDS)
1985
0
0
0
90
174
554
1,588
3,533
6,406
10,931
16,758
17,500
17,990
28,032
36,058
39,685
40,252
36,048
34,214
25,865
21,959
22,098
15,095




--



--



374,828
1986
0
0
0
64
128
415
1,193
2,632
4,835
8,300
12,968
13,944
14,952
24,760
33, 136
37,201
38,612
35,071
33,584
25,913
21,926
21,707
15,065
6,985
„ „









--

353,391
1987
0
0
0
45
91
307
895
1,978
3,602
6,264
9,847
10,791
11,914
20,578
29,268
34,186
36,196
33,643
32,673
25,436
21,682
21,554
15,019
6,971
4,827












327,767
1988
0
Q
0
Q
64
218
661
1,484
2,707
4,667
7,432
8,194
9,220
16,397
24,325
30,196
33,263
31,538
31,342
24,746
21,282
21,314
14,914
6,950
4,818
2,414







,,
.,
.,


298,144
1989
0



153
469
1,095
2,031
3,508
5,537
6,184
7,000
12,689
19,383
25,097
29,380
28,982
29,381
23,738
20,705
20,921
14,748
6,901
4,803
2,409










..

265,113
1990
0



0
330
777
1,499
2,631
4,162
4,607
5,283
9,635
14,99*
19,997
24,418
25.599
27,000
22,253
19,862
20,354
14,476
6,824
4,769
2,402

0
" ~
*"








231,878
1991
0
0
0
0
0
0
0
548
1,064
1,942
3,121
3,463
3,936
7,272
11,389
15,475
19,457
21,276
23,848
20,450
18,619
19,525
14,084
6,698
4,716
2,385
0
0
0

""







199,267
1992
0
0
0
0
0
0
0
0
749
1,378
2,304
2,597
2,959
5,417
8,595
11,750
15,057
16,953
19,821
18,062
17,110
18,303
13,510
6,517
4,629
2,358
0
0
0
0

"
""





168,071
1993
0
0
0
0
0
0
0
0
0
971
1,635
1,917
2,219
4,072
6,404
8,868
11,433
13,119
15,794
15,012
15,113
16,820
12,665
6,251
4,504
2,315
0
0
0
0
0



" "

""

139,111
1994
0
0
0
0
0
0
0
0
0
0
1,152
1,360
1,638
3,054
4,813
6,607
8,628
9,961
12,222
11.962
12,561
14,857
11,638
5,860
4,320
2,252
0
0
0
0
0
0






112,886
1995
0
0
0
0
0
0
0
0
0
0
0
958
1,162
2,254
3,610
4,966
6,428
7,518
9,280
9,257
10,009
12,348
10,280
5,385
4,050
2,160
0
0
0
0
0
0
0
--




89,666
1996
0
0
0
0
0
0
0
0
0
0
0
0
819
1,600
2,665
3,725
4,832
5,601
7,004
7,029
7,745
9.B39
8,544
4,757
3,722
2,025
0
0
0
0
0
0
0
0
--



69,905
1997
0
0
0
0
0
0
0
0
0
0
0
0
0
1,127
1,891
2,749
3,624
4,210
5,218
5,305
5,881
7,fi14
6,808
3,953
3,287
1,861
0
0
0
0
0
*0
0
0
0

--

53,528
1998
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,332
1,951
2,675
3,158
3,922
3,952
4,438
5,781
5,268
3,150
2,732
1,644
0
0
0
0
0
0
0
0
0
0
-•

40,004
1999
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,375
1,898
2,331
2,942
2,971
3,307
4,363
4,000
2,438
2,177
1,366
0
o
0
0
0
0
0
0
0
0
0

29,167
2000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,337
1,654
2,171
2,228
2,486
3,251
3,019
1,851
1,685
1,089
g
n
u
o
o
0
0
0
0
0
0
0
0
20,770
	 • ™~~ ~— ~ 	 — "• — — ~~ 	 	 	 	 ____

-------
EXHIBIT M-2: FUTURE SALES OF ASBESTOS DISC  BRAKES  FOR  CARS
	 ___ 	 — — "~_ 	
SALES FORECASTS:
DISC BRAKE PADS TOR CARS,
1986-2000
(IN THOUSANDS)
HOOEL
YEAR
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
TOTAL SALES:
NEW SALES:
REPLACEMENT SALES;
1985
0
0
0
0
0
0
1,588
0
0
0
16,758
0
0
0
36,058
0
0
0
34,214
0
0
0
15,095


•-

•-




103,713
15,095
88.618
1986
0
0
0
64
0
0
0
2,632
0
0
0
13,944
0
0
0
37,201
0
0
0
25,913
0
0
0
6,985



..




~ *
86,739
6,985
79,755
1987
0
0
0
0
91
0
0
0
3,602
0
0
0
11,914
0
0
0
36,196
0
0
0
21,682
0
0
0
4,827
* *



,



::
78,312
4,827
73,485
1988
0
0
0
0
0
218
0
0
0
4,667
0
0
0
16,397
0
0
0
31,538
0
0
0
21,314
0
0
0
2,414
* *
** -

* ~




.,
76,547
2,414
74,133
1989
0
0
0
0
0
0
469
0
0
0
5,537
0
0
0
19,383
0
0
0
29,381
0
0
0
14,748
0
0
0
0

"


"



...
69,517
8
69,517
1990
0
0
0
0
0
0
0
777
0
0
0
4,607
0
0
0
19,997
0
0
0
22,253
0
0
0
6,824
0
0
0
0


""



""

--
54,459
0
54,459
1991
0
0
0
0
0
0
0
0
1,064
0
0
0
3,936
0
0
0
19,457
0
0
0
18,619
0
0
0
4,716
0
0
0







"
..
47,793
0
47,793
1992
0
0
0
0
0
0
0
0
0
1,378
0
0
0
5,41?
0
0
0
16,953
0
0
0
18,303
0
0
0
2,358
0
0








,-
44,410
0
44,410
1993
0
0
0
0
0
0
0
0
0
0
1,635
0
0
0
6,404
0
0
0
15,794
0
0
0
12,665
0
0
0
0
0
n







--
36,497
0
36,497
1994
0
0
0
0
0
0
0
0
0
0
0
1,360
0
0
0
6,607
0
0
0
11,962
0
0
0
5,860
0
0
0
0
0
o
g
0






25,789
0
25,789
1995
0
0
0
0
0
0
0
0
0
0
0
0
1,162
0
0
0
6,428
0
0
0
10,009
0
0
0
4,050
0
0
0
0
0
o
0
0




-•
21,649
0
21,649
1996
0
0
* 0
0
0
0
0
0
0
0
0
0
0
1,600
0
0
0
5,601
0
0
0
9,839
0
0
0
2,025
0
0
0
0
0
0
0
0



-•
19,065
0
19,065
1997
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,891
0
0
0
5,218
0
0
0
6,808
0
0
0
0
0
0
0
0
0
0
0
0


--
13,917
0
13,917
1998
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,951
0
0
0
3,952
0
0
0
3,150
0
0
0
0
0
0
0
0
0
0
0
0

--
9,053
0
9,053
1999
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,898
0
0
0
3,307
0
0
0
2,177
0
0
0
0
0
0
0
0
0
0
0
0
--
7,382
0
7,382
2000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,654
0
0
0
3,251
0
0
0
1,089
0
0
0
0
0
0
0
0
0
0
0
0
5,993
0
5,993

-------

-------
A. 2  FIBER SUPPLY FUNCTION ESTIMATION

    Bans on selected asbestos-containing products and restrictions on asbestos
fiber consumption may. significantly disrupt the upstream market for asbestos
fiber.  In particular, the price of asbestos fiber as well as the quantity of
asbestos fiber produced may change.  This appendix first examines the asbestos
fiber industry and conditions in the asbestos fiber market.  The results of
this examination are then used to estimate the elasticity of supply of
asbestos fiber.  This is a measure of the percentage change in the quantity of
fiber supplied in response to a one percent change in fiber price.  The
elasticity of supply is used to estimate the extent to which the price of
asbestos fiber would fall in response to a products ban or other exogenous
shifts in fiber demand.

    1.  Asbestos fiber Industry Profile

    Asbestos is characterized by high tensile strength, non-combustibility,
and resistance to chemical and thermal corrosion.  These properties render it
useful in a broad range of manufacturing activities,  Several different
mineral fiber types fall Into the asbestos group; chrysotile, amosite, and
crocidolite are the primary commercial fibers.

    Chrysotile is the principal variety, constituting, by weight, 93 percent
of U.S. consumption and virtually all of North American production in 1982.
Chrysotile is graded according to fiber length.  Since most North American
production of asbestos occurs in Canada, the Quebec grading system provides a
general industry standard.  The Quebec system grades fibers from Grade 1
(longest) to Grade 8 (shortest).  Further grading divisions are based oa other
physical and mineralogical characteristics such as color, tensile strength,
and chemical composition.

    Asbestos is mined through a number of techniques, including open pit,
surface, and underground workings.  In the important U.S. districts around
Morrisville, Vermont, and Copperopolis, California, open pit techniques are
used.  The mined ore is milled close to the mine site and the fiber generally
separated from surrounding rock by a dry process.  Wet-milling and
reprocessing of waste tailings have proven particularly useful in the
production of short fibers and reduces harmful dust emissions (Clifton 1975,
1980).  One U.S. mill currently uses the wet process.

        1.1  AsbestosProduction

        Exhibit A.2.1-1 lists asbestos fiber production data for the United
States, Canada, and the world.   The United States is a relatively small
producer of asbestos, producing about 1 percent of world asbestos fiber in
1982.  U.S. production grew substantially in the 1960s and peaked in 1973 at
136,00 metric tons.  Since 1973, U.S. production has declined 54 percent to
63,000 metric tons.  The U.S. export data of Exhibit A.2.1-1 show that a
growing proportion of U.S. production of asbestos fiber is exported.  Thus,
although Clifton (1983a) observes that the net import reliance of the United
States was 74 percent in 1982,  over 90 percent of U.S. production was exported
and approximately 98 percent of U.S fiber consumption was supplied by foreign
fiber producers.  As shown in Exhibit A.2.1-2, three asbestos fiber producers
currently operate in the United States:  Calavaras Asbestos Corporation and
                                    A.2-1

-------
Exhibit A.2.1-1
                   •*« jtries of J.S. 3-oayetian, £*0ortj, jna [moor's
              3f 4so«itos Fiptr, i.*fndUn, *nd norig ?roauc-ion
                              C104 i»tr
-------
                 A.2,i-2   U.S. Deposits Mined Over the Past Decade
      Mi ne
  Arizona;
    Chrysotile
  Cali forni a:
    Santa Cruz
    Copperopolis




    Christie


    Santa Rita


 North Carolina;
   Hippy


   Boot Hill
 Vermont;
   Lowe 11
                             Owner
 Jaquays Mining
  Corporation
 Atlas Asbestos
  Corporation

 Calaveras  Asbestos
  Corporation
Coalinga Asbestos
 Co.,  Inc.

Union  Carbide
 Corporation
Powhaten Mining
 Company

Powhaten Mining
 Company
                        Vermont Asbestos
                         Group
                                               Closed in 1979.
 Previously  owned  by  Pacific
 Asbestos  Corp.  Closed year end
 1974.   Reopened as Copperopolis
 in  1975,

 Closed  year end 1974.
Ceased operation in 1979,


Ceased operation in 1972.
                      Previously owned by the GAP
                      Corporation.   Mine scheduled
                      for closure in March 1975.
                      Remained open for operation
                      after purchase by an employee
                      group in 1975.
Source:  USOOI.  1957-1983,   U.S.  Department of the Interior.   Minerals
         yearbook.   Washington,  DC:   Bureau of Mines.

-------
Union Carbide Corporation, both with mines in California, and the Vermont
Asbestos Group  (Clifton, 1983b).

    Canada is a major world producer of asbestos.  It shipped 821,000 metric
tons in 1982, 19 percent of world production.  Canadian shipments peaked at
1,627,000 metric tons in 1973.  Like the United States, Canada has experienced
a sharp reduction in shipments since 1978.  Canada is the leading source of
asbestos fiber for the U.S. market, supplying approximately 95 percent by
weight of all imported fiber  (see Exhibit 3).  Crocidolite and amosite are
exclusively supplied to the United States by South Africa (Clifton, 1983a,
p. 13).

    Current and recent U.S. and Canadian producers of asbestos fiber are
listed in Exhibits A.2.1-2 and A.2.1-4.  Past production figures and current
capacity estimates for Canadian producers indicate the industry is
experiencing a period of prolonged excess fiber capacity in North America.
This has led to both permanent and temporary closings of nines and mills over
the past decade in both the United States and Canada.

    In the United States, four mines have closed since 1974 and two others
have continued operation under new ownership.  In Canada, one mine closed for
lack of reserves and another closed after less than 2 years of operation.
Temporary closings- and a dramatic change in the structure of ownership over
the past few years also have occurred.  "Foreign" ownership of Canadian mines
and mills (e.g., Johns-Manville, Eternit, General Dynamics, Turner & Kewall,
and Rio Tinto-Zinc) has been replaced by Canadian interests.  These interests
include financial and legal intervention on behalf of the Quebec and
Newfoundland provincial governments.  A Quebec provincial corporation,
Societe Nationale de 1'Andante (SNA) now owns-and operates five commercial
asbestos deposits.  In the process, vertical ties between mining and milling
of asbestos and production of asbestos products have been weakened
considerably.  Thus, recent and substantial changes in the structure of
asbestos fiber production in North America apparently have occurred.  In North
America, the asbestos fiber industry has become, more than ever, an industry
of relatively few producers, with the top four producers accounting for
approximately 80 percent of North American capacity.

    Costs of asbestos fiber production have been affected by a variety of
influences over the past decade.  Using aggregate data for Canadian asbestos
mines,  the ratio of energy and materials costs (in real terms) to the output
of the mines has increased by about 60 percent over the last decade.  The
ratio of labor costs (in real terms) to the output has increased by 40 percent
over the last decade.  Both these values suggest that, at least in aggregate
terms,  operating costs have increased a good deal.  It is interesting to note
that between 1979 and 1980, the first year of a dramatic production decline in
Canada, these ratios each declined by almost 10 percent.

    The cost of meeting environmental and health regulations probably had a
major impact on the cost of producing asbestos during the mid-1970s.  In the
United States, GAF, Inc., claimed that the expense of investing in equipment
required to meet the new environmental and health regulations in the United
States  was a major reason it chose to close the Lowell mine.  The permissible
limits of exposure to asbestos in mines and mills we're reduced in Canada as
well and firms were required to upgrade their environmental controls.  In
addition, indirect increases in the cost of asbestos fiber production in

                                    A.2-4

-------
      Exhibit A,z.i-3   Time Series of U.S.  Imports  by  Country  of Origin;
                 Canada, Republic of  South  Africa,  and  Other
                             (103 metric  tons)
Year
1982
1981
1980
1979
1978
1977
1976
1975
1974
1973
Canada
229.1
318.4
315.5
495.9
543,2
516.1
560.4
456.9
670.7
693.8
Republic
of South
Africa
11.4
17.1
10.3
16.3
24.9
20.4
18.2
16.3
21.5
22,8
Other
1.3
2.1
1.5
0.8
1.9
14.2
18.1
15,3
3.1
2.6
Total
241.8
337.6
327.3
513.0
570.0
550.7
596.7
488.5
695.3
719.2
Sources:    USDOI.  1973-1983.   U.S.  Department of the  Interior.
            yearbook.  Washington,  DC;   Bureau of Mines.
Minerals

-------
       Exhibit A.2.1-4
                                                                  *beslos Deposits in Canada
 Newfoundland;
   Bale Verte
Quebec:
  East Brouyhton
  Asbestos Hill
                                              Mill  capacity
                                             Jjnetrie  tonsj
Mine
Producers;
Owner

Ore/day fiber/yr

Remarks

  British Canadian
  King  Beaver

  Normandie
  Bell  Asbestos
  Mine

  Black Lake
 Bale Verte
  Nines, Inc.
                                            6,600
  80,000
                                                                     Formerly owned by Advocate Mines
                                                                     Ltd. with major  interests held
                                                                     by Johns-Manvilie and Itern it.
                                                                     Expropriated by  the Government of
                                                                     Newfoundland in  September 1982
                                                                     after mine closure.   Subsequently
                                                                     sold to Transpacific Asbestos
                                                                     Corporation.   Hine reactivated as
                                                                     Baie Verte Mines.
Jim Walter Corp-
oration  through
Carey Canada,  Inc.
Societe  nationale
de I'amiante (SNA),
an arm of the
Quebec provincial
government
                                            6,800
                                           5,400
210,000



 90,000
                                                                     All  four  are  former Asbestos
                                                                     Corporation Limited (ACL) mines
                                                                     purchased by  SNA  in 1982.  ACi
                                                                     formerly  owned by General Dynamics
SNA
SNA
SNA
SNA

Lake Asbestos of
Quebec Ltd.
12,000
7,000

2,700

9,000

210,000

Sb.OOO

23b,000



Closed because reserves exhausted
Purchased in 1980 by SNA from
Turner & Newall, Ltd.
Lake Asbestos is a subsidiary of
                                                                                      (continued)

-------
                                       Exhibit A,2.1-4 (continued)
    Hi »e
  Quebec (tout,imied):

    Ihelford Mines


    Jeffrey Mine


  BriLisi) Columbia:
    Cassiar Mine


Prospective producers;

  Ontario:

    Haichewai)


  Quebec:

    Awos
    Cliibou()atnau
  Owner
Lake Asbestos of
 Quebec

Johns-Manyilie
 Canada,  Inc.

Brinco Mining,
 Ltd.
United Asbestos,
 Inc.
Abitibi Asbestos
 Mining Company,
 Ltd.

MeAdam Mining
 Corporation, Ltd.
  Mill capacity
  (metric tons)

Ore/day   F iber/yr
 4,000
30,000    450,000
 5,000    100,000+
 3,600    100,000*



11,000


 4,500
        Remarks
the U.S.  firm ASARCO,

Sold to private Canadian inter-
ests in 1983.

Formerly  owned by Rio  Tinto-Zinc
Corporation, ltd.
Inactive.  Operated  from late
1975 to March 1977.
                                                                       Feasibility study has been under-
                                                                       taken.
Feasibility study has been  under-
taken.

-------
recent years has  come  in  the  form of  thousands  of  lawsuits claiming health
damage owing to asbestos  exposure.  The  "third  party"  suits mostly originate
in the United  States,  but both Canadian  and U.S. firms  are subject to the
judicial rulings.  Johns-Manville specifically  cited the  expected liability
from these  suits  as  the principal reason for  its filing for bankruptcy in
1983.  It claimed-that the number of  lawsuits could jump  to 52,000 and cost it
$2 billion  by  the'end  of  the  century  (C&EN, 1983).

    Another type  of  cost, the so-called  user  cost, will also influence
production.  If firms  expect  that asbestos  fiber will be  worth less in the
future, then the  user  cost of producing  asbestos fiber  in the present will
decline.  This nay very well  be the expectation of asbestos fiber producers.
If so, it makes estimating the direction and  magnitude  of shifts in the cost
structure of the  industry very difficult indeed.

        1.2 Asbestos  Consumption

        The world production  figures  of  Exhibit 1  suggest that world
consumption of asbestos has not declined as dramatically  as it has in North
America and Western  Europe.   Indeed,  it  has been estimated that, until
recently, consumption  of  asbestos fiber  has been rising about 4.4 percent
annually in developing nations, largely  because of rapid  growth in
construction activity  and freedom from regulation.  After peaking around 1970,
consumption of asbestos fiber in North America  and Western Europe has declined
markedly.   As shown  in Exhibit A.2.1-5,  U.S.  asbestos fiber consumption for
all three commercial types has dropped since  the early  1970s, but this drop
was most dramatic  since 1978.  Total U.S. consumption of  asbestos decreased
from 607,000 metric  tons  in 1977 to 247,000 metric tons in 1982.  Exhibit 3
shows that  asbestos  fiber imports fell from 551,000 metric tons in 1977 to
242,000 metric tons  in 1982.

    Exhibit A.2.1-6  shows the U.S. consumption  of  chrysotile asbestos fiber by
fiber grade from  1974  to  1982.  The most dramatic  declines in consumption have
come in the larger grade  fibers.  By way of illustration, short fibers (Grades
6 and 7) constituted 63 percent of consumption  by  weight  in 1974.  In 1982,
these grades accounted for 84 percent of consumption by weight and nearly 60
percent of  consumption fay sales value.

    Exhibit A.2.1-7  shows fiber consumption in  the United States by end use in
1982,  In recent years, only  consumption of asbestos friction materials and
asbestos-based coatings and compounds 'has remained relatively stable.  The
products bans considered by the U.S. Environmental Protection Agency (EPA)
would have  a proportionally larger impact on  consumption  of longer fibers,
especially  in the  case of asbestos/cement (A/C) pipe.   All other things equal,
if the products ban  is put into effect,  the North  American market would be
principally for short  fibers.

    The decline in U.S. consumption of asbestos can probably be attributed in
large part  to leftward shifts in demand  for asbestos associated with health
concerns. Sone of  this shift  is attributable  to regulation.  In 1972, the
Occupational Safety and Health Administration (OSHA) promulgated regulations
requiring reductions in asbestos dust levels  in the workplace and in 1983
issued notice of  intent to tighten exposure limits further.  In 1973 EPA
promulgated the national emission standard  for  asbestos,  which was
subsequently revised to its final form in 1978.  The current EPA regulation

                                    A.2-8

-------
    Exhibit A.2.i-s  Time  Series  of  U.S.  Asbestos  Consumption by  Fiber Type
                             (103  metric  tons)
Year
1982
1981
1980
1979
1978
1977
1976
1975
1974
1973
1972
Chrysoti 1e
229,8
334.1
347, 8
546.4 •.
600.6
578.6
634.2
517.9
724.1
761. 5a
698. 7b
Croc idol ite
16.0
14.0
10.5
13.6
16.9
24.5
19.4
20.6
33.9
16.3
14.2
Amos ite
0.7
0.7
0.4
0,5
1.2
3.8
4.1
11.6
8.5
3.9
5.2
Total asbestos
246.5
348.8
358.7
560.5
618.7
606. 9C
' 657. 7C
550. 1C
766. 5C
781. 7C
718. 1C
Adjusted to reflect only 96 percent of apparent  consumption.   Data
 collected on completely revised  form  and expanded .list  of  consumers.

 Adjusted to reflect only 95 percent of apparent  consumption.   Data
 collected on completely revised  form  and expanded  list  of  consumers.
 Total does not include anthophyllite.

Source:   USOOI.   1972-1982.   U.S. Department of the  Interior.   Ninerals
         yearbook--asbestcs.  Washington, DC:  Bureau  of Mines.

-------
        Exhibit A.2.1-6
                      Time Series of U.S. Consumption of Chrysotile
                               Fibers by Grade
                              (103 metric tons)
Year
1982
1981
1980
1979.
1978
1977
1976
1975
1974
Grades
1 & 2
-
0.1
0.4
3.8
4.2
4.4
1.5
•1.0
1.1
Grade
3
2.3
3.8
3.9
13.1
14.4
15.8
13.5
12.4
21.0
Grade
4
18.4
75.0
88.6
90.2
99.1
108.4
92.9
100.2
116.9
Grade
5
15.0
54.9
94.3
154.1
169.4
186,1
66.1
70.6
124.6
Grade
6
18.8
20.5
25.0
64.5
70.9
77.8
48.0
66.1
92.8
Grade
7
^175.3
179.8
135.6
220.7
242.6
266.4
411, 9
267.4
361.4
Total
229.8
334.1
347.8
546.4
600.6
658.9
634.2
517 ..9
724. 14
Grade
3
-
-
.
,
-
_
0.2
0.2'
6.4
Source:   USOOI.  1974-1982.   U.S.  Department of the Interior.
          yearbook.  Washington,  DC:   Bureau of Mines.
Hinerals

-------
                       Exhibit A,2.1-7   US   A,IK", I us  Cofl&uBptton by Ind Use,  Grade,  and
                                                        <103  »elric Ions)

A/C pip*
A/C siren t
Mooring products
Rooting products
Packing and gaskets
insulation:
Ihemat
[ lectrical
Friction products
toatinys and itm-
fiuunds
Plastics
Jextiles
Paper
Other
total
thr^&olil*
Grades tirade Grade Grade Grade
1*23 4 b 6
156 5.0 1.0
02 10 72
--
30
04 0.5 08

~~
l.tt 1.9 67
--
0.2
I.I
„ 1 , „
12 1.2 0.3 O.I
-- 2. J 18.4 15,0 18.8

Grade
7
„.
2.4
49 0
40
11,9

0 I
31 3
25.0
0.2
--
1.5
43.3
175.3
Total
21,6
10 8
49.0
7.0
13 6

0.7
S? 9
25 0
04
1,1
16
46.1
229.8
Crocido- Aao- lutal
lite site dbbvstus
16.0 -- J/ 6
10 tt
490
JO
13 b

0.2 02
07
M 9
250
0.4
I.I
1.6
0,5 46.6
160 0.7 2465
Source:   DSOOI   1982.   U.S. DepartBent at the Interior.  Minerals yearbook.   Washington, DC:  Bureau of Kinei.

-------
 limits emissions  from milling and manufacturing,  prohibits  certain uses of
 asbestos-containing materials,  provides  for work  practices  in demolition and
 renovation operations,  and specifies  procedures for waste disposal and
 disposal site  maintenance.   EPA also  has taken action on asbestos exposure
 under the Toxic Substances Control Act  (TSCA)  of  1976,  requiring inspection of
 schools to identify asbestos hazards  and establishing a reporting rule in
 1982.   A number of additional agencies,  including the Food  and Drug
 Administration (FDA)  and the Consumer Product  Safety  Commission  (CPSC) also
 have  imposed regulations on the use and  handling  of asbestos.  These rules
 either prohibit or raise the cost of  asbestos  use to  manufacturers of
 asbestos-containing products,  encouraging the  use of  asbestos  substitutes.  In
 addition,  the  growing number and size of tort  suits related to asbestos
 exposure in the 1970s raised the implicit cost of asbestos  use to the
 manufacturers  of  asbestos  products.   Finally,  consumers, perhaps alerted by
 the press surrounding the  regulations and tort suits,  have  probably
 voluntarily reduced their  consumption of some  asbestos-containing products.

         1.3 Asbestos Prices

         The price of  asbestos fiber can  vary considerably with its grade,
 color,  tensile strength, purity,  and  other physical characteristics.  Exhibits
 A.2.1-8 and A.2.1-9 present posted prices for  various  fiber grades for Vermont
 and Quebec asbestos fiber.   In 1983,  Grade 3 (tensile  grade) asbestos had an
 average posted price  of  $1,962  (Canadian)  per  metric  ton in Quebec, and Grade
 7 had  an average  posted  price of $234 (Canadian)  per metric ton:  the longer
 fibers  were over  eight times  more expensive.   Similar  price differentials
 among  grades also hold for  "Vermont.   Vermont prices, when corrected for the
 exchange rate  between Canadian  and U.S.  dollars,  are very close  to Quebec
 prices.   It is generally acknowledged that because of  the production dominance
 of Quebec  fiber producers,  Quebec prices  lead  the market.   Posted prices
 nearly  doubled between 1972  and 1977  in nominal terms.   Since  that time, the
 nominal price  has been relatively steady.  In  real terms, however, the price
 of asbestos  fiber has declined  dramatically since 1977  (see Exhibit A.2.1-10).
 Actual  prices  paid for asbestos  may deviate from  the posted price for a
 variety of reasons.   For example,  it  is  generally acknowledged that over the
 past few years of slack  demand  considerable price discounting.relative to
 posted  price has  occurred.

    Large,  long-term  purchasers  of asbestos can ordinarily  negotiate contracts
 at prices  below the posted  or  "spot"  price.  The  significance  of these
 influences  is  suggested by  the  time series of  "shipment" prices  presented in
 Exhibit A.2.1-11.   Based  on  data  from  the  Canadian Minerals  Yearbook, these
 prices  were  up to  25 percent below posted prices  in 1982.   The reader should
be cautioned, however, that  these  shipment prices, particularly  for the years
 in which supplies were tight  from the late 1960s  to the mid-1970s,  reflect
 transfer pricing  policies from wholly owned fiber producers  to parent firms in
 the United States.  As a result,  they too may  deviate  from  competitive market
 prices.

    2-   Estimating  the Supply Elasticity  of Asbestos Fiber

    In  principle,   two general methods can be used to make the estimate of the
own price  elasticity of supply:  econometric estimation based on past market
data and engineering cost estimation based upon analysis of production costs
 for various production technologies or plants.   The former  is the primary

                                   A.2-12

-------
  Exhibit A.2.1-8
Series of fostea Prices;
   Grade for Vermont
                                                    Chrysott'e
•"ear
1383
1982
1981
1980 .
1979
1978
1977
1976
1975
1974
1973
1972
1971
1970
1969
.968
1967
1966
1965
1964
1963
1962
1961
i960
1959
1958
1957
HA » Hot 1

Grace
3
1360
1237
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
380
369
332
332
NA
34S
374
374
374
374
397
397
399
399


Grade
4
79§
865
NA
729
729
651
477
418
484
337
295
2S5
220
271
263
241
240
NA
236
251
2S1
251
251
200
200
1S1
191


Grade
5
660
589
NA
521
521
504
144
306
259
196
171
171
174
158
153
144
153
NA
133
131
131
131
131
131
131
136
136

. -,— •» AC^_ •*«"r^
6
407
396
NA
351
351
313
228
200
173
131
114
114
116
10S
102
96
93
NA
88
86
86
86
86
86
86
86
86


Srade
7
188
179
NA
226
226
207
139
122
114
82
69
59 .
70
68
66
52
58
NA
58
58
58
58
58
58
58
SS
58

. J! _ * _ _ 1 fifVJt
Month
Jan,
Jan.
--
J*n.
July
Jan.
Jan.
Jan,
Jyn.
May
Fefi.
Jan.
July
Jan,
Jan.
Aug.
April
..
All
All
All
All
nay
All
Nov.
(1-1}
Dec.

* 4«M*t - — -.
 art ivtngtt of p«ft*d
Sources:    USOOL  1957*1983,  U.S. 0*p*rtMnt  of  tr>«  Intirior.   Minerals
            y**rt!k.  Hattifngtan, DC.  8uf**u of Mints.
            Econoaic Report af tf* Pr«*?a«nt.  19«3.  Washington,  DC:
            U.S. 5ov*rnMnt Prlnfinf Office.
            International Monetary Fund.   International  Financial  Statistics.
            Asbestos.  1983 (January).  Asbestos aining  industry  review  1982.
            64(7).

-------
     Exhibit A,2.1-9
                       ri*«  Jtrits Of Postid Prices:   ChrvSOtit* Sy
                      Gr*a«  foe Queotc (Canadian dollar*)
fear
19S3
1982
1981
1980
1979
1978
197?
1976
1975
1974
1973
1972
1971
1970
1969
1963
19*7
1966
1965
1964
1963
1962
1961
1960
19S9
1958
1957
Grtat
I
NA
NA
NA
NA
NA
NA
3650
3496
3496
2428
174S
ISIS
1615
1525
1480
1410
1410
NA
1410
1443
1443
1443
1443
1443
1*43
1710'
1710
Graat
2
NA
NA
NA
NA
2530
2168
1986
1879
1S79
1320
945
875
875
82$
800
760
760
NA
758
742
742
742
742
742
742
1020
1020
Grid*
3
1962
1099
1762
1585
1449
1233
1275
1177
1177
818
$88
$44
544
524
508
4«4
474
MA
455
613
613
613
613
613
613
525
525
Grad«
4
12 BO
1053
1161
1074
936
793
€15
. 661
661
447
327
305
305
294
286
181
267
NA
2S5
213'
213
213
213
213
213
218
218
QracSi
5
726
592
6S3
637
534
412
358
335
335
252
193
190
180
171
166
156
153
NA
136
135
135
135
us-
us
135
1*0
140
Grade
6
513
417
460
419
376
30f
260
240
240
180
129
120
120
114
110
104
101
NA
95
86
86
86
86
36
86
89
89
Graft)
7
234
189
208
196
183
160
145
144
144
111
80
76
76
72
71
S6
66
NA
60
60
60
60
60
£0
60
SO
60
Month
Jan.
Jan.
Jan.
Jan.
Jan,
Jan,
Jy»y
July
Qtc.
Aug.
Nay
All
July
Jan.
Jan.
April
April
--
Jan.
AH
All
All
All
All
Nov.
A11
All
Snflax for
Cbnvirsion
to U.S.
dollars
81. 14*
81. 01
83.41
85.53
85.39
87,73
• 94.11
101.40
98.29
102.26
91.98
•100.94
99.02
95.80
92.86
92.80
92.27
»•"•
93.02
93.10
92.52
92,78
95.87
100.39
104.93
103. 72
101. SS-
KA » Not «f»pHcabl'«. •

**o«inal priCM art In S/iftort ton 1957- If?? ami S/wtrlc ton  if 78-1383  and  *rt
 •w«r»g»i of tf» postati ran«s.
        of tf» postati rang«s.


Sourcts:     USOOI.   19S7-1M3.   U. S.  OwartMnt of th« InMHor.
            ywrtwott.   Wwhiftfion,  OC:   8urt*y of
                            af t»» fnnietont,  ' 19§3.   WMdinfton,  OC:   U.S.
            So*trn«mt CHrstlnf Off let.
            !coftc«ic Report of  tin  I»r««f4«nt.   19S4.   Wtsninoton,  OC;   U.S
                                Off1«.
            l'nt«rB*tion«l  Montury  Funa.   Various  ytars.   tnt»rn«10ft*1
            Fm*f»ei«i  Statistics.

            A*B»tta$.   1983  (January),  Aibtttoj Hiding  inauitrv
            19S2.   64(7).

-------
    A.2.1-10   Tim,  S«ries of fiaai Prices of Canadian Snipn«nts By Graat*
                           (1972 $/«etric ton)
r«ar
1982
1S81
1SSO
1979
1978
1977
1976
1975
1974
1973
1972
1971
1970
1969
1961
1967
1966
1965
1964
1963
1962
1961
I960
1959
1958
1357
ursaa
*
322. 706
351.269
361.430
3SS.340
371.401
406.554
379.938
290.329
248.207
207.218
215.478
228. 07S
228.602
228. 363
223.486
232.716
232. 04*
234.611
235.231
254. 703
260.124
278.092 '
296.272
310.524
310.140
294.632
3 race
5
217.552
236. 602
265.298
252.906
256.976
278.548
262. 756
220.309
210.313
161. 979
158.173
176. 328
175,026
17S.7S9
164. 284
168. 107
164.621
175.953
171. 595
172.613
176.181
187. 673
199.880
215.013
205. 690
205. 169
Grade
6
13S.770
147,696
152. 126
153.315
164, $87
174.340
175.014
145.809 -
134.407
111. 391
107.636
108. 703
119. 714
120.926
107.142
106.130
103.454
99. 347
1(34. OS6
110. 799
116.678
123.922
130.978
139,171
139. S7S
139. 320
Grade
7
58. 3244
63.4756
58.436}
72. 1097
79.2072
86.7593
85.7501
81.5917
71.2544
60.S346
57.4687
SS.3S74
57.7482
57.8577
5S.S637
54.7f06
52. S432
57.6890
54. 3703
56.7035
5S.7624
62.3672
67.1271
72.8721
72.6393
72.4S32
          prict*  «r.  toual  to  the  ratio  of  tut valu* of tftipstnts to
 Quantity                                                 ^^
Sourcts:     Entity,  Hints, and Kaiourcci Canada.  Varioui y«ars
            Canadian «1n«rali ytartook,  Ottawa, Canada.

            Statistics Canaaa.   1911-1377.  Production ami sMpsmts
            of  aso«ftoi uy CanacUan tints.  Publication *26-20S—
            A»D*ttoi.  Ott«w«. Canada.

            Statistics Canada.   1978-1981.  Prooyction and
            of  
-------
     Exhibit A.2.1-11    Time »«Hts of  No* 1 nil  Pr-icts of C«n«(3iar>
                             SMpmtntS  Oy Gratl«*
                           (C*n*aian $/short  ton)
fear
1382
1981
1980
1379
1978
1977
1976
1975
1974
1S73
1972
1971
1970
1969
1966
19€7
1966
1965
1964
1963
1962
1961
1960
1959
1958
1957
Grade
3
..
1,142.75
1,011.14
936,14
922.43
1,041.60
1,003.50
982.01
495.31
425.75
3t7,OS
395.23
390. 09
381. 75
397.79
406. 42
381. 06
384.62
332.36
396. 42
400.90
334.39
438. 18
429.47
341. 11
341. S«
GrsQ«
4 '
749.1
747. 152
685.019
617.975
577.856
549.014
449.926
337.236
253.470
19S.8SO
133.617
200.676
198.023
193.680
180.379
190.120
175. 173
170.186
166, 84«
179.042
179.643
182.493
134.000
181. 535
179.193
170. S48
Graa«
5
505.004
503.255 ,
102.820
439.214
399. 824
376.154
311. 158
256.184
214. 772
151,469
142.755
155. 143
151.514
149.914
132.596
130. 116
124,274
127.637
121. 710
121.337
121.672
123.157
124. 136
125. 699
118.844
US. 041
6ria«
6
315.163
314.150
288,325
266. 257
256.078
235,431
207.253
1S8. 475
137.257
106.914
96. 715
95.643
103, 700
'. 102.56.
86.476
82. 145
78. 098
72.067
73.805
77.8«5
80.579
81.321
81.344
31.361
80, 702
90.834
Snot
7
13 S. 389
135.013
129. 707
125.231
123.237
117.161
101. 546
94.774
72. 715
58. 102
51. 638
48. 707
50.024
49.070
44.846
42.408
39.665
41.84fi
38. 564
39.859
38.510
40.927
41.689
42.602
41.970
42.038
 ShipMnt prfcai ar» «jua! te tft« ratio of tn« valu* of sMoMflti  to
 Quantity
Soureti:     Energy,  ttlrws.'and Saieurcii Canada.   Various years.
                     *in«riU yMro««i(.   Ottawa,  Canafla.
            Statutici Canada.   1959-1977.   Prodyetlon  aiw »ft1pM«itt
            of «»bt*to* &y Canadian *1n*i.   Publication *26-2Q5--
            *»o«»to».   Ottawa,  Canada.

            Sutistics Canada.   1978-1981.   Production  anti ttiipwinti
            of asMctot 8y Canad'tan «in«i,   ?«B!ication f26-224--
            AiB«fWi.   Ottawa,  Canada,

-------
  approach  selected  for  this  study.  However,  rough engineering cost  data  are
  the used  to check  the  results  of  the  econometrically derived estimates,

         2- 1   Econometric  Estimation

         Estimating the supply  elasticity  of  asbestos econometrically presents
  formidable difficulties.  Given the above-described asbestos fiber  grades and.
  types, microeconomic theory suggests  a multimarket approach  that available
  data are  not  able  to support.  To narrow  the scope and  simplify the commodity
  definition, the econometric analysis  focuses on North American production and
  consumption of short,  chrysotile fiber (Quebec Grades 6  and  7).  As previously
  discussed, this fiber's type and grade account for much  of the North American
  fiber trade and its relative role is  likely  to grow even larger under the
  proposed  products  ban.

     A variety of econometric models were  formulated and  estimated.  Assuming a
  perfectly competitive  fiber market, the most attractive  of these, on strictly
  theoretical grounds, were versions of the "prototype  micro model" as
  described, for example, by  Intriligator (1978).  A general form of  such  a
 model is  shown in  Equations 1  through 3.
            Qs " «s + Pl?a + £2pf + *s                                      (1)

            Qd - "
-------
           In Q - a -f ft  In Pa                                              (4)

Equation 4 was estimated from  1977  to  1981  annual data.  The quantity variable
is the estimated annual  metric tonnage of short  fiber  (Grades 6 and 7)
produced and consumed in North America (as  defined in  Exhibit 12).  The price
variable is the consumption-weighted average  shipment  price of Grades 6 and 7
asbestos fiber converted to constant U.S. dollars.  As noted above, these
prices are substantially lower than current posted prices.  These and other
raw data are listed in Exhibit A.2.1-12.

    The parameter estimates and associated  standard errors that resulted from
the ordinary least squares regression  are presented as

           In Q - 6.32 + 1.46  In Pa                                       (5)
                 (3.56)  (0.78)

The price elasticity of  supply is directly  interpretable as the coefficient in
In Pa.  It is positive and statistically significant (different from zero) at
the 0.80 level.  The supply of short asbestos fibers is therefore estimated to
be "elastic"; a shift in demand of  10  percent would result in a 6.7 percent
change in price.

    The logic of this specification can be  supported in at least two ways.
First, one can contend that the supply function  of asbestos fiber was
relatively stationary over the  estimation period and that shifts In demand
"trace" points along the supply function.   If this is  indeed the case, the
identification problem,  implicit in single-equation models of this type, would
be eliminated.  Alternatively,  if the  industry,  because of its high degree of
concentration, is more monopolistic in character than  it is perfectly
competitive, the price and quantity variables may be tracing out a monopoly-
like industry response function to  shifts in demand given a stable industry
cost function.

    Whichever the case,  the short (5-year)  time  series used to estimate the
relationship makes the assumption of a stable supply or cost function more
tenable.  In particular,  the estimation period if coincident with the period
of contracting, demand and postdates some of the  changes that may reasonably be
thought to have shifted  supply  (e.g.,  asbestos exposure regulations and
general strikes).  In addition, the errors-in-measurement problem associated
with the price variable  may have been  reduced in this  period because transfer
pricing distortions aay  have been mitigated by virtue  of divestiture trends
and the smaller gains to be realized.

        2.2  Enginee.rin.g....Cp.st	Analysis

        In a separate analysis, engineering cost data were used to derive a
supply elasticity estimate.  Capital,  capacity,  and operating data for a
number of mines in Canada and  the United States  were used to construct a crude
supply function for North America.  The data were obtained from
nonconfidential portions of U.S. Bureau of  Mines field reports and
supplemented by judgment and rough  estimation where detailed or mine-specific
data were lacking.  The  cost estimates were constructed so as to represent
"intermediate-term" average variable costs.  In  general, this means that the
cost of replacement capital needed  to  operate the mines under the current
mining plan was included as a  cost  of  production, but  major capital investment

                                    A.2-18

-------
                Exhibit A.2,1-12
 1981
- •- - - — 	 ™ 	 _ 	 ,,
Can. )>iod
of *6
(S Ions)
199, bob
281,854
285,250
229,121
286, ITO
Can. prod.
or */
(S Ions)
426.435
441,866
582. 750
581,626
562.199
lot. esl. US.
prod of f6, J
(S tons)
51,646
54,746
6J.7J6
63,612
61,054
OS. e*pt
of short
f itoers
(S tuns)
15,422 .5
I?. 99$. 9
11,572 I
20,569,9
19, 4/9.0
Can. tot
eiip, of
short fibers
(S tons)
597,727
621,938
617,628
780,649
782,030
Can. e«p
of short
f ibers
to W S,
(S tons)
292,118
288.915
430,114
456,279
429,372
Unit vjluec
of Ib
(t/S ton)
314. ISO
288.325
266 257
2S6 078
235 431
Unit valuec
of fj
($/S ton)
135 013
129. 707
12S. 231
123 237
117 161
Canadian
ext hdiigc
rate
(Can |/US »
0 8)41
0 8b5 J
0 8M9
0 8773
0 9411
I - short tons. — — 	 • 	 -— 	 . 	
 197B
 19/7

 S  ton
 GWP  = Gross National  Product.
     *I«ports «f Gr«tei 8 and 9 ar«
                                            to be negligible
             Canadian production  *  Canadian product ion
                of 6 and 1              al 6 and j
 the estimate of W. S,  production of Grades 6 and 7 is based
                                                                              production proportions
                                                                                                                 u* « S  BurMU .,
Sources
            USOO,    Various y.-rs.   US  0«ParU««t of  «„  .nteM.r.  Ni^ra.s y.,rbook.  W«MngtOn. DC:
            Iconic «eport of  the  ^reSi«l,nt    mj   Mashin8lon. OC;  US  Ckiver™*^ Printing Office
            Internal ion. I lto«.tary  fwrf.  varjol»s years.  lntern,t,»na, Hwncial Statistics
            tnorgy,  Woes a«» «esourc«s Canada   l»»j   Hsbeslos export salary   Otia«a
                    NIM, and fie*o»rces Canada   1983 (Ja^ry-S.pl^.r)   Cana
-------
in deposit development was not.  Also included in the average variable cost
estimates were estimates of operating cost, including the cost of labor,
supplies, energy, and administration.  Capital costs reflect mine and mill
plant and equipment cots as well as  infrastructure costs.

    The cost per ton of ore was calculated by adding the capital and operating
costs, and a cost per ton of fiber was derived by dividing the cost per ton of
ore by the estimated ratio of fiber  capacity to ore capacity for the nine.
This average cost per ton of fiber for each mine was then compared to an
estimate of the average revenue a given mine would receive for a ton of fiber
as a rough test of the validity of the engineering cost estimates.  The
average revenue estimate was the 1982 weighted price of fiber based on Bureau
of Mines proportions of production by grade and either the shipment or posted
prices previously discussed.  The- weighted posted price for all grades in
North America is estimated to be about $612 (U.S.); the weighted shipment
price is estimated to be about $452  (U.S.).

    When production costs were compared to the average weighted prices for a
given mine, 11 of the 13 mines had cots that were lower than either of the
price estimates.  Of the remaining two mines, one had costs higher than the
shipment price an lower than the posted price, and the other had cots higher
than both the shipment and posted prices.

    To estimate the supply elasticity, the Canadian mines were ranked in order
of increasing cost per ton of fiber, and the capacities of the ranked mines
were summed to form a measure of total fiber supplied at a given cost.  The
plot of total cost per ton of fiber  against the cumulated capacity forms an
automated intermediate term supply curve for Canadian fiber.  The supply
elasticity is estimated by regressing the natural logarithm of the summed
capacity against the natural logarithm of the cost per ton of fiber;

               In (capacity) - a + ft In (cost)                             (6)

where /9 is directly interpretable as the supply elasticity.  The same
procedure was used to obtain the supply elasticity for U.S. mines,

    The elasticity of supply for asbestos fiber for Canada estimated in this
fashion was found to be 1.726.  The U.S. elasticity was 0.671.  Estimates of
the supply elasticity were also derived using pooled data for all North
American producers and for composite and individual fiber grades.  Due to
fiber grade differences, the varying prices among fiber grades, and the fact
that different mixes of the various grades are produced at the individual
mines, different supply elasticities may apply for the different fiber grades.
Thus, a single elasticity estimate for all fiber grades may be imprecise.

    The estimated supply elasticities by fiber grades vary widely.
Interestingly, for Grade 7, the estimate over all North American producers is
1.45, with & standard error of 0.204.

        2.3  Interpreting the.Eesults

        The supply elasticity estimate for asbestos fiber presented above must
obviously be used with caution; the standard error of the econometric estimate
suggests populations whose true elasticity of supply could easily range from
0,71 to 2,27.   The sensitivity of the result also can be estimated by adding

                                   A.2-20

-------
another observation to  the data set.  Based on an unofficial estimate of
Canadian production of  Grades 6 and 7 fibers  in  1982, rerunning the regression
with 1982 data yields an estimate of the  supply  elasticity of 2.59.  This is
an extreme example since 1982 was a year  of generally depressed economic
conditions, but it reinforces the point that  the "true" supply elasticity may
vary substantially from that selected for analysis.

    As noted above, microeconomic theory  suggests an economic model of the
fiber market that is much more complex than any  of the specifications employed
in this study.  For example, interaction  with the world market for asbestos
fiber and the joint production features of fiber production are clearly
relevant to the supply  decisions that characterize the industry.  Furthermore,
the literature-on the theory of exhaustible resources introduces further time-
dependent considerations that might be considered in the characterization of
firm behavior.  For asbestos, the prospect of continued declines in demand
suggest that user cost  may be dropping, thereby  stimulating current production
despite declining real  prices.

    Microeconomic theory and business practice also distinguish between short
and long-run supply adjustments to changing prices.  These notions were behind
the applications of lagged adjustment and pure expectations models employed in
the simultaneous equation framework discussed above.  Although the application
of such models is subject to reservation  (Griliches, 1967), the microeconomic
principle is that supply tends to be more elastic as firms adjust fixed inputs
over time.   This argues perhaps for treating  the current estimate as being on
the low side of a longer term supply response to declining demand in North
America,  Such an inference should be made cautiously in the absence of a
clearer understanding of the influence of the lag structure of production, the
quantity of asbestos reserves, and the interactive influences between the
North American and world markets and among different grades of asbestos fiber.
                                    A.2-21

-------
REFERENCES
Asbestos Magazine.  1983 (January),  Asbestos mining industry review, 1982.
    64(7).

Chemical and Engineering News.  March 28, 1983.  Legal remedies for victims
    begin taking shape,  p, 15.

Clifton RA.  1975, 1980.  Minerals facts and problems--asbestos.  Washington,
    DC:  Bureau of Mines, U.S. Department of the Interior.

Clifton RA.  1983a.  Mineral commodity summaries--asbestos.  Washington,
    DC:  Bureau of Mines, U.S. Department of the Interior.

Clifton RA.  1983a.  Minerals yearbook.  Washington, DC:  Bureau of Mines,
    U.S. Department of the Interior.

Economic Report of the President.  1983.  Washington, DC:  U.S. Government
    Printing office.

Energy, Mines, and Resources Canada.  1983 
-------
A. 3  BAN/PHASE-DOWN  SIMULATION MODEL

    A number  of  the  regulatory alternatives  examined  in  this  study consist of
product bans, fiber  phase-downs,  or  combinations of these policies.  To
examine the costs  of these  different alternatives  and to generate information
for the exposure, and health effects  models to use  in  estimating  their
benefits,  the Asbestos Regulatory Cost Model (ARCM) was  developed and
computerized.  The theoretical underpinnings of the ARCM are  reviewed in
Chapter II in the  main body of the RIA report, and data  inputs for the model
are presented in Chapter  III of the  RIA.

    The theoretical  approach of the  ARCM presented in Chapter II of this RIA
is presented  in  terms of  smooth demand and supply  functions for  ease of
exposition.   However, the actual  computational procedures are, for the most
part, conducted  in terms  of "step functions", which are  analytically the same
as the more convenient and  conventional functions  familiar from  textbooks, but
are more consistent  with  the character of the underlying data available to the
model.  Thus, Section 1 below  presents the ARCM's  approach in terms of these
s tep-functions.

    Section 2 reviews the exact welfare effects computations  performed by the
ARCM for simulating  product bans  and fiber phase-downs.  Finally, Section 3
presents an annotated copy  of  the FORTRAN computer code  for this interactive
model.                       »

    1-  ARCM  in  Step^Function	Format

    This section discusses  the approach used in the ARC  model for the
estimation of the  supply  curves in all markets, product  demand curves,
individual market  derived demand  curves for  asbestos  fiber, and  the asbestos
fiber demand  curve.

        1.1   Supply.  Curves

             •1.1.1  Asbestos Fiber Market

              The elasticity of supply of asbestos  fiber  to the U.S. from
domestic and  foreign sources was  estimated using a simple econometric model. •*•
A log-linear  (constant elasticity) specification was  used and the parameter
estimates  were reported as:

                           In Q - 6.32 + 1.46 In Pa

where:

    Q  — the  estimated annual  metric tonnage of short fiber (Grades 6 and 7)
         produced  and consumed in North America, and

    Pa - the  consumption-weighted average shipment price of Grades € and 7
         converted to constant U.S.  dollars.
     ^  The derivation of this equation and its econometric estimation is
discussed in Appendix A.2 above.
                                    A.3-1

-------
     Since  this  implies  an elasticity  of  1.46,  the  ARC Model  uses  this as the
 default,   Using the quantity  and price of  asbestos fiber in  the data year, the
 ARC  model  translates  this (constant)  elasticity into  an equation  for a linear
 supply curve,   The exact computation is:

                               N
                           Qa  - Fl (Qi  * PAC>
                              i-1

                        SLOPE  - P8/(SELAST  » Qa)

                   INTERCEPT  - Pa - (SLOPE • Qa)

 where:

         Qa — total quantity  of asbestos fiber  consumed by all markets in
              1985;

        PAC - Product Asbestos Coefficient (as  described in  Section 3);

         Qi - output quantity in product market  'i' in 1985;

           N - number of product markets;

      SLOPE - slope of asbestos fiber supply curve;

         Pa - price of asbestos fiber reported  in  1985;

     SELAST - fiber supply elasticity, as  described above; and

  INTERCEPT - ordinate intercept of the fiber supply  curve.   .  '


     It should be noted that it is the supply of asbestos  fiber to the U.S.
 from domestic and foreign sources that is  modeled  above.  Since this is the
 short-run  and long-run supply function, producer surplus  will exist in this
market in  the long run, given the positive slope of the  supply curve.

             1.1.2  Product Markets

             The supply schedules in  the output markets  are  short-run curves.
 Short-run  schedules with upward slopes imply that  some  factors earn rents in
 the  short-run.   However,  there are no long-run rents.  The rents earned by
 factors of production in markets exhibiting upward sloping short-run curves
 are  shown  as the shaded area  in the top panel o£ Exhibit  A.3-1.  However, data
 available  for this modeling were not  sufficient to generate  upward sloping
supply functions.   Instead, supply curves  at the level of average variable
costs were designed based  on  the price and other engineering cost data
gathered in the survey and by PEI's survey of capital convertibility and the
costs of exit from the various asbestos product markets.

    Given  these supply functions,  quasi-rents for  all product markets are
incorporated as shown in the middle panel of Exhibit A.3-1.  The shaded area
between price and the average variable cost measures the  quasi-rents earned in
the  short-run.   These quasi-rents that accrue to factors  of  production in the

                                    A.3-2

-------
  Price of
  Fiber
                 Exhibit A.3-1
                                     • sr
   •:AVC.

iPrice of
 Output
'
    0?P.
                              Quantity of;
                              Output Good

-------
 short-run and can be forfeited If the price that producers receive falls.
 Thus,  the shaded area represents short-run producer surplus.   In the long-run,
 since  the supply curve for output is assumed to be perfectly elastic,  no
 producer surplus losses in these markets exist.  Instead,  the cost of
 regulation is borne entirely by consumers of these output goods.   Finally,  if
 quasi-rents do not exist in the short-run the short-run supply schedules
 coincide with the long run schedules, which are assumed to be perfectly
 elastic  (bottom panel of Exhibit A.3-1), and average variable cost is  equal to
 price,

         1.2  Demand,Curves

         A number of output goods use asbestos fiber.  The demand for these
 products gives rise to the demand for asbestos fiber.   Hence, characteristics
 of  the demand function In each output market help to determine the shape and
 the location of the fiber deaand function.

     The  approach used by the M.CM to estimate demand curves In all markets,  as
 described here,  attempts to use all  possible information from the use  and
 substitutes analysis,  but not go beyond that information.   Step demand
 functions are suggested most directly by this type of analysis (which  is the
 only Information available regarding the demand of each asbestos  product).

     A step demand function is a continuous  non-smooth function (Exhibit
 A.3-2).   It depicts purchaser behavior as ceasing to demand certain quantities
 of  asbestos products once certain prices of these products are reached because
 they switch to non-asbestos substitutes.   The amount of demand that switches
 to  the non-asbestos substitute good  is determined by the quantity of the
 asbestos  product currently used In a manner for which the  use of  the
 particular substitute  product Is appropriate.

     The principal advantage of using step demand functions in the ARC  model is
 that construction of the demand functions do not require assumptions in
 addition  to those already necessary  to perform the use and substitutes
 analysis.   Furthermore,  such a specification does not assume  that demand for
 the  product decreases  (increases)  at a constant rate as its price Increases
 (decreases).   Not only would such an assumption go beyond  available data, it
may  also  be  particularly inappropriate In cases where  the  cheapest substitute
product  is  much  more expensive then  the asbestos product.   In such a case,  a
 small change in  the -price of the asbestos product should not  induce large.
 substitution away from the product (a linear downward-sloped  demand curve,  on
 the  other hand,  would  imply some amount of  such substitution).

     On 'the  other hand,  the use of step demand functions have  certain minor
 disadvantages.   First,  the use of currently available  substitutes analysis
 indicates  that for a few markets the substitutes are (presently)  cheaper than
 the  asbestos  product itself.   Since  full  substitution  has  yet to  occur, this
 information contradicts  an assumption underlying step  demand  functions  that
 full substitution occurs  once  the  price of  the  asbestos product exceeds that
of the substitute,   Instead, use of  step  demand curves  requires some method  to
handle data  that suggest  that  presently available substitutes  are cheaper than
the  asbestos  product.  As described  in the  next sub-section,  the  model  assumes
such substitutes  to have  the  same  price as  the  asbestos product in 1985,
                                    A.3-4

-------
                     Exhibit A.3-2
Price of

                                          " Demand



-------
     The other disadvantage of step demand functions is that they dictate  the
 complete and instantaneous substitution for a product given a large enough
 rise in the price of the asbestos product.   Though this response may seen
 unrealistic,  a step demand function is the  best available alternative.  The
 other alternatives either do not use all the information available  from the
 use  and substitutes analysis'or impose outside assumptions not necessarily
 justified by or consistent with available information .

     The exact manner in which the step demand functions are generated is
 outlined below,

              1.2.1  Product Demand Curves

              Each step in the demand curve  corresponds to the price of a
 particular substitute,  and its associated quantity*.   Exhibit A.3-2  shows  the
 product demand curve for a market with non-zero quasi-rents..  (For  markets
 with no quasi-rents,  average variable cost  is equal to the baseline price.)
 The  price of each substitute provides the height of each step;  and  the
 quantities provide the lengths of the corresponding steps.   However,  the
 asbestos product and its substitute(s)  may  differ in their useful lives,  so
 calculating the price of the substitute(s)  for comparison with the  price  of
 the  asbestos  products must be done carefully.   The formulae used to calculate
 the  present value prices of substitutes are as follows:

     Let:

          r -  firm's  real discount rate;

         TO -  total cost of'the product,  which is the sum of the  installation
              and delivered purchase costs;^

         Na —  useful  life of the asbestos product;

         Ns  -  useful  life of the substitute  product;  and

         PV -  present  value price of the  substitute product calculated
              for  life of the  asbestos product.

     (1)  If the  life of  the substitute product  equals  that of  the  asbestos
         product,  the  present  value  price of the  substitute  is  calculated
         simply  as  TC  the sum  of-the installation and delivered purchase
         costs,  i.e.,

            PV - TC
     o
        The formulae listed here do not include annual O&M costs because such
costs were always considered "equivalent" across all substitutes and the
asbestos product.
                                    A.3-6

-------
     (2) If the  life  of  the substitute product  is not equal to that of the
        asbestos product, the present value  price of the substitute is
        computed as:^
           PV - TC  •  (H-  r)NS  -
                                            r)Ns
     (3) Finally,  if the present value price  of any substitute is less than
        the price of the asbestos product  in the data year, it is set
        equal to  the price of the asbestos product.

The  quantities associated with each step are computed based on the market
share of each substitute.

     The baseline domestic production quantities for all asbestos product
markets with an import orientation i.e., markets with a consumption-production
ratio greater than one, are adjusted by the  consumption-production ratio to
obtain the baseline domestic consumption quantity.  The domestic consumption
quantity is distributed in the ratio of the  market shares of substitute (s ),
i.e., the shares of the existing market that switch to the substitutes, given
the  non- availability of the asbestos product.

     For markets with an export orientation,  i.e., markets with a
consumption-production ratio "less than one,  an additional step is generated.
This adjustment for export oriented markets  is based on the assumption that
foreign consumers have other options, such as purchasing the product from
foreign suppliers.  Thus, the height of this step is the baseline price of the
asbestos product.  The corresponding length  is obtained by taking the
difference in the domestic production and  domestic consumption quantities,
i.e., the amount of exports.  Hence, it is assumed that foreign consumers will
not  tolerate any increase in the price of  these imports above the baseline
price.  The only adjustment for import oriented markets is mentioned above.
This quantity is then used as the appropriate baseline quantity.  For all
other modeling purposes these markets are  treated exactly the same as those
markets with no trade, i.e., markets with  a.  consumption-production ratio of
one.  The only other differences arise in  the distribution analysis, which is
described below.

             1.2.2  Product Derived Demand, Curves

             The total derived demand for  fiber is obtained by the horizontal
summation of the individual product (derived) demands for fiber.  However,
these product-by-product derived demands oust be computed carefully to account
for non-zero quasi-rents in the product markets, since. quasi -rents increase a
product market's derived demand for fiber.
     •*  The procedure used to calculate present value prices assigns the
present value of the remaining useful life of the longer lasting product as a
proportion of the asbestos that product's useful life.  This procedure assumes
that present values- can be distributed linearly over time.  Given the need to
convert present value prices to the same useful life of the asbestos product
(which is necessary for estimating consumer surplus), this procedure was
deemed adequate for purposes of the ARC model.

                                    A.3-7

-------
    For markets with zero quasi-rents, the height of each derived demand step
is obtained by first calculating the difference between -the height of the
corresponding step in the product demand curve and the baseline product price
in the data year.  This difference is then multiplied by the product asbestos
coefficient and the result added to the baseline asbestos .fiber price in the
data year , i . e . ,
                   pfn - (pn - p°> • PAC + P°F
    where :
        PI! - height of the ntn step in the product derived demand curve
              (Exhibit A,3-3);

         Pn - height of the ntn step in the product demand curve
              (Exhibit A.3-2);

         pQ « baseline product price (Exhibit A.3-2);

        PAC - product asbestos coefficient; and

        P°p - baseline asbestos fiber price (Exhibit A,3-4).


     The step-length is obtained by multiplying the corresponding step length
in the product demand curve by the PAC, i.e.,

                   qfn - qn » PAC

    where:

        qfn - length of the n"1 step in the product derived demand curve
              (Exhibit A.3-3);
                             th
         qn - length of the n   step in the product demand curve
              (Exhibit A.3-2); and

        PAC - product asbestos coefficient.


    The baseline fiber quantity used by each market is obtained by multiplying
the baseline product quantity by the PAC,  i.e.,

                   qO£ ± - q° « PAC

    where:

        qO, .  - baseline fiber quantity used by a product market 'i'
           >:L   (Exhibit A. 3-3);

           qO „ Daseline product quantity (Exhibit A.3-2); and

          PAC — product asbestos coefficient.
                                    A.3-8

-------
                    Exhibit A.3-3
          Product Derived E>einand Curve
 Price of
i Fiber .'.••;.
                                        Derived Demand
                          f ,:;' .
                                  ^i_i'. * •'

-------
                         Exhibit A.3-4
                   .: Fibeir '
 Price of
'''
                                              Derived Demand (Total)
                                                      : Quantity :b'f•
                                                      •:iFtbier:v ::••:•>=

-------
    For markets with existing quasi-rents, the procedure outlined above is
followed with one modification.  The willingness of primary producers with
quasi-rents, to bid away their quasi-rents in order to obtain asbestos fiber
is incorporated in this procedure.  This is achieved by adjusting upwards the
maximum price of asbestos fiber the producers are willing to pay.
Computationally, the height of each step is the difference between the height
of the corresponding step in the product demand curve and the product's
average variable cost  in the data year rater than the product's price., i.e,

                   pfn - (pn ~ ATC) * pAC 4- P°F

    where:

        Ffn -  height of the n step in the product derived
               demand curve (Exhibit A. 3-3);

         Pn -  height of the n   step in the product demand
               curve (Exhibit A. 3-2);

        AVC -  average variable cost per unit of output in the
               product market;

        PAC "•  product asbestos coefficient; and

        P°p -  baseline asbestos fiber price (Exhibit A.3-4).

             1.2.3  Asbestos Fiber DemandCurve

             The asbestos fiber demand curve is the horizontal summation of
all product derived demand curves.  The baseline fiber price is determined by
identifying the intersection of the fiber demand curve and the fiber supply
curve.  This is achieved by using the equation of the supply function, as
described earlier, i.e.,
    and                  P°F - INTERCEPT + SLOPE • QQ

    where:

             .  Qo - baseline asbestos fiber quantity in the fiber market
                    (Exhibit A.3-4);

            q f s ~ baseline fiber quantity used by product market 'i'
                    (Exhibit A.3-3);

             • pOj, = baseline asbestos fiber price (Exhibit A.3-4);

        INTERCEPT - ordinate intercept of the fiber supply curve; and

            SLOPE — slope of the asbestos fiber supply curve.



                                    A.3-11

-------
              1.2.4   Baseline  .Computation

              The baseline  quantities  in each product  market  for  any  one year
are  obtained  by applying the  appropriate growth rate  to  the  previous years
quantity,  i.e.,

           q°.   - baseline product  quantity for market  '!' in year  't';
            J. j U

        q  £ t-1 ™ Baseline product  quantity for market  'i' in year  't-1'; and

              rj_ - growth rate for market 'i'  from year  't-1'  to  year 't'.


     The baseline fiber quantities demanded by each product market are computed
as explained  in Section  1.2.2.   The total fiber demand in the baseline, and
hence the  price of fiber are  computed as described in the previous section.

     The change in the fiber price based on the fiber  price in 1985,  i.e., the
difference between the 1985 fiber price and the freshly  computed baseline
fiber price,  is translated into  the baseline  price for each  product  market.
This is achieved by  dividing  this change in fiber price  by the product
asbestos coefficient and adding  the result to individual market  prices in the
data year, i.e.,

                   pO «.  Pd +  <-pOf _

    where:

         pO „ baseline product price  (Exhibit 2);

        P°f - baseline asbestos  fiber price (Exhibit  4);

         Pd - product price in 1985;

        P"f - asbestos fiber  price  in 1985; and

        PAC - product asbestos coefficient.

    2.  Computation  of Welfare Effects  in theARCM

    The theoretical  discussion of the welfare economic foundations underlying
the ARCM in Chapter  II of  the RIA Identified  areas 1, 2,  3,  and  4 in the
asbestos fiber market and  areas  5,  6, 7,  and  8 in the output markets that
represent  losses and transfers to the various  parties involved in asbestos,
This section discusses the  algorithms used by the ARCM to compute these areas,

        2.1  Computation of ScenarioPrices andQuantities

        Prior to calculating  areas  1-8,  it is  necessary  to compute the prices
and quantities in all output markets  and the  fiber market under  the  regulation
option being considered.   The algorithms  used by  the ARCM are described below.
                                    A.3-12

-------
             2.1.1  Asbestos. Fibeg Market

             The algorithm for computing prices and quantities in this market
depends on the type of regulation being considered.  The three types of
regulation that this model is capable of simulating are:

         (i)  staged asbestos product bans;

        (ii)  staged asbestos product bans and phase down of annual
              asbestos fiber usage; and

       (iii)  phasedown of annual fiber usage,

    Staged Asbestos Product Bans .  After banning one or more product, the
fiber demand curve is recomputed, as using the derived demands of the
non-banned products only.  The total quantity of fiber obtained is the
scenario  fiber quantity.  The scenario price (P^p in Exhibit A. 3- 5) is
computed by using this scenario quantity in the equation for the fiber supply
curve.
                        Usage .  The scenario fiber price in this case is the
"full" price of fiber (PXF in Exhibit A, 3-6).  However, for calculating all of
the relevant areas it is also necessary to compute the supply price of fiber
(P'^f in Exhibit A. 3-6).  The scenario quantity is identical to the fiber cap
specified.  Using this value with the fiber supply equations yields P'^f.  To
compute P p, the algorithm steps down the fiber demand function until it
locates the first vertical segment (Qg in Exhibit A. 3-6) of the step-function
at which the quantity is greater than (or equal to) the specified fiber cap.
The "full" price of fiber then is the price associated with this particular
step (Pg in Exhibit A. 3-6).

    Staged . Product Bans and Phasedown of Usage .............. Fiber .  Scenario price and
quantity in the fiber market under this scenario is computed in the same way
as in the previous scenario, with one exception.  The demand curve in the
fiber market is • recomputed , as in the case of product bans only, by excluding
the derived demand of the banned markets .   The fiber cap is then imposed on
this newly computed fiber demand, and the calculations proceed as in the
phase -down only scenario.

             2.1.2  Product Markets

             The scenario prices in the non-banned product market are computed
using the change in the fiber price.   The translation of this change is done
as follows:
     where :
              scenario price of the itn product;

              baseline price of the i"1 product;

              scenario price of asbestos fiber;
                                   A.3-13

-------
                     Exhibit A.3-5
 Pricebf
;• Fiber-. •/:
                  .:•; ;;;:B:;-Fiber ;;Marke|-
                  '. j(Pr pdu M:
                              Post-ban Fiber Demand
                                          Fiber Demand
                                         (Total Derived Demand)
                                                Quantity of
                                                Fiber

-------
                          Exhibit A, 3-6
::.Price::-of
      ;$•:
      '•*•;>;

                                               Derived Demand (Total)
                                                           Qiiaiitity of

-------
P f - baseline price of asbestos fiber; and
                                            th
        PAC£ - Product Asbestos  Coefficient for the  ith product.


    As  can be seen,  ?•*•£ < P"j_ for  product  bans only,  since P^-f < P®f occurs
 only  in these scenarios.   The opposite  is  true for  the other  two regulatory
 options, as shown  in Exhibit A. 3-7.

    The price -change algorithm  applies  for all cases  and all  markets with one
 exception.  The  scenario  price  for markets with existing quasi-rents in a
 scenario with a  fiber cap is computed as follows:

                   plt .  AVC£ + (P1f -  P°f )  .  PAC£

 where :

    AVC^ - average variable cost in the baseline for  the ith  producer market,
           and all other  variables are  as"  defined before.

    However, if  the  P1f computed for such  markets is  less  than P°it  the
 baseline product price, the scenario price is  the same as  the baseline  price.
 Nevertheless, even in such a case, P^j_  needs to be  retained for  use  in  the
 computation of areas for  welfare analysis.

    The methods  for  computing scenario  quantities depends  on  the regulation
 option  chosen.   For  staged bans  the scenario quantities in all non-banned
 markets are the  same as the baseline quantities because the price drops along
 the last vertical segment of the demand curve.   Of  course,  the scenario
 quantities for banned markets are  zero.  However, for the  other  two  regulatory
 options, the calculations are not  as straightforward  and are  described  in
 detail  below.

    Computation  of Scenario ..... Quantities  in  Non-Banned  Product  Markets When
 Fiber Cap is ^Imposed in the Fiber  Market .  The first  step  in  computing  product
 scenario quantities given a fiber  cap is to determine the  amount' of  asbestos
 fiber demanded by individual markets.   To  calculate this,  the algorithm "steps
 down" the product derived demand curves until  It identifies the  first
horizontal segment at which the  height  of  the  step  is  less  than  or equal to
 the "full" price of fiber.  If the identified  segment's  height  is less  than
 the full price of fiber,  then the  quantity of  fiber allocated to that market
 is the  quantity  associated with  this step.  On the  other hand, the Identified
horizontal segment's height could be equal to  the "full" price of fiber  in
which event the  quantity  of fiber  allocated to  this market  is somewhat more
complicated to describe.   The quantity  of  fiber  used by  such  a market cannot
be estimated directly.   Mathematically, it is  determined as:
  Qfls  - Q»lf  + (Qn+1lf - Q"lf)
                                        - V
                           A.3-16

-------
       Exhibit A.3-7
•Areas -in the Pptput

-------
 where:

        Q -   - scenario quantity of asbestos fiber used by the i market,  as
               shown in Exhibit A.3-8;

        Qnif - quantity of asbestos fiber associated with the horizontal  step
               lf just  greater than the "full"  price of fiber in the demand
               curve of the  itl1 product (Exhibit  A.3-8);

      Qn  £f - quantity of asbestos fiber associated with the step identified
               whose height is equal to the  "full" price' of fiber in  the
               desired  demand curve of  the ic^  product (Exhibit A.3-8);

        Qcap - specified fiber cap  (Exhibit  A.3-6);

        Qg-1 " vertical step  at which the quantity is just lesser than Qcap  in
               the fiber demand curve (Exhibit  A,3-9);  and

          Qg - vertical step  at which the quantity is just greater than Qcap in
               the fiber demand curve (Exhibit  A.3-9),

    As  can  be seen by  the above computation, if the  specified fiber cap
 overlaps  a  vertical segment  in the fiber demand curve,  then

                                   Qcap ~* Qg

 and therefore,

                                Q1.   -Q1*1.,
                                 IS      if

    After having  estimated the  scenario quantity  of  fiber used by all
 non-banned  markets,  the  scenario quantity in the  product  markets is computed
 as:
where

    ^^is " scenario quantity in the ith product market  (Exhibit A.3-7)
           and the other variables are as defined earlier.

        2.2  Computation of AreasUsed inWelfare AnalysIsof Markets

    After computing the scenario prices and quantities  for all output markets
and the fiber market, the areas used in the welfare analysis can be measured.

             2.2.1  Product Bans Only

             The relevant areas for measuring the welfare effects of product
bans alone are identified below along with the formulae used to calculate
them.
                                    A.3-18

-------
                    Exhibit A,3-8
   Derived Demand Curve of an Output Market
     SKowing Usage of Fiber under Phasedown
;'Pricie"0f
-Tiber.' '>;.
                                     Quantity of
                                     asbestos fiber
                                     used by this
                                     market under
                                     regulation
                                          Cjtiantity of
                                          •.Fiber

-------
                      Exhibit A.3-9
-Output':
                     M^
                                           Quantity of
                                           Output Good

-------
         •  Area  2  (Exhibit A.3-5):   The  loss in fiber market producer
           surplus  transferred  to  the non-banned output markets  in the
           form  of  gains  in  consumer surplus (due to  the  drop in the
           price of fiber).

                    Area 2 -  Q1  •  (P°f -  P1  )

         •  Area  4,,,,(Exhibit A.3-5) :   The  deadweight losses borne  by
           factors  of production associated with the  supply of fiber.

                    Area 4-0.5 •  (Q0 -  Qj)  «  (P°f -  p!f)

         •  Area  2 + Area 4 - Total  loss  of  producer surplus by the
           factors  of production associated with fiber production,

         «  Area  6  (Exhibit A.3-10 >:   Deadweight losses borne by
           consumers of each banned product.

                              si
                    Area 6  - f|   (q^ -  q*'1,,  •  (P\ - **>
                              n-1             i)      i    i)

           where S1 - number of steps in the step demand  function of
                      market "i".

         •  Area8(Exhibit A.3-10):   The short-run deadweight losses
           borne by factors  of production (other than those in the
           fiber market) associated with the supply of each banned
           market with existing quasi rents.

                    Area 8j_ - qb£ •  Pb£ - AVC^

         •  Area  CSG....(Exhibit,.,.A. J-11) :  Consumer surplus gain in  each
           non-banned market.

                    CSGj. - qbi . p^i - pS

Note that:
                             Nnb
                     Area 2 - ff   CSG£
                              i-1

where N   «• number  of non-banned output  markets.


             2.2,2   FiberPhase-down

             Computing the welfare  effects  associated with  a regulation
scenario involving  fiber phase-down is the  same whether or  not certain output
markets  are banned.

    If certain output markets are banned prior  to imposing  the fiber  cap,
Areas 6  and 8 in the banned markets,  as  computed  in Section 2.2.1 above, also
exist and are calculated in  addition to  the  areas identified below.
                                    A.3-21

-------
                     Exhibit A.3-10
•price ;.: of •
Output
  ;>px:
  M^tfr
                        ,6
                  II

-------
                  Exhibit A.3-11
         A Hbii-Banned Quitput Market in a
        v::--C-:>Stageif::B|in.?uiily Scenario
:
-------
Asbestos
       Ar ea rii 1 .^ ( Exh ibit A. 3-6):  Consumer  and producer  surplus
       losses in  the downstream output markets represented  In the
       fiber market as part of willingness  to pay  for. fiber.

               Area 1 - Q    • (P°_ - f'le)
                          cap      f       f

       Area, 2 ,„ jExhib i t A .3 - 6 ) :  Transfer  of welfare  in the  form of
       valuable rights to purchase of use fiber derived from the
       producer surplus losses borne of factors of production
       associated with the supply of fiber.

               Area 2-0    • (P°f - P"1-?)
                          cap      r       T

       Area 3 ( Exhlb i . t .._A . 3- 6 ) :  Deadweight  losses  borne by
       consumers  of products made from asbestos fiber  and the
       short- run  deadweight losses borne  by factors  of production
       (other than those  in the fiber market) associated with the
       supply of  all products in all downstream markets , as
       measured in the fiber market.
       Area 3 -  f]     ' ?n ~ ?°f +  (Qg ~ Qcap)  '  C^f - P°f)
                n-g                                    F

       where;  S* —  number of steps in the fiber demand function, and
                     other variables are as defined earlier.

    •  Area 4 (Exhibit A. 3-6):  Deadweight losses borne by factors
       of production associated with the supply of fiber,

               Area  4-0.5 • 
-------
                  gl
        Area 6 -  T   (qn+I± -  q\)  .
                 n-j

        where Sj_ - number of steps  in demand function of product i;

         and qJ£ - quantity associated with the  first vertical  step  greater
                   than q^-j_ if P^-£  is at the same  level  as  a horizontal  step;

       else, qJj_ - q^j_ — scenario quantity in market 'i'.

        «  Areai::ii7:i:i: (Exhibit 7.):   Short run losses borne by factors of
           production (other than those in the fiber market)
           associated with the supply of each non-banned market and
           transferred to owners of the rights to  purchase  or use
           fiber in the fiber  market.

           If ¥li - P0!, then:

               Area ?£ - (P°i  - AVC|_)  » qli

           else if P1! > V°it  then4

               Area 7j_ - (P1!  - AVC£)  • q1^

        *  Area8(Exhibit 7):   The short-run deadweight losses borne
           by factors of production (other than  those in the fiber
           market) associated  with  the supply of each non-banned
           asbestos product.

           If fl± - p°it then:

               Area 8t - (P°i  - AVCj.)  « (q°i - q1!) .

           else, if P1i > P0if  then:

               Area 8j_ - (Pl±  - AVCj.)  • (q°i - q1!)

        «  Area 5j_ + Area 6j_ - Gross  consumer surplus loss  experienced
           in the ith market,

        •  Area ?£ 4- Area 8^ •» Gross  short-run producer  surplus losses
           experienced by factors (other than those  in the  fiber
           market) associated  with  the production  of output good "i".

        2.3  Welfare AnalysisbyParty

        The eight groups affected by  regulation  of asbestos were identified  in
Section 2,2,  These eight groups are  made up of  the'parties shown below:
        As explained in Section 5,1,  in  such  cases  the  scenario  price  is  the
same as P^ the baseline price, but  the value  of  Pj  (which measures  the
increase in AVC due to higher fiber prices) is required for  the  computing
areas 7 and 8.

                                    A.3-25

-------
         (1)  Domestic Miners and Millers;
         (2)  Foreign Miners and Millers-;
         (3)  Importers of Bulk Fiber, Mixtures and Products;
         (4)  Domestic Primary Processors;
         (5)  Foreign Primary Processors;
         (6)  Domestic Purchasers; and
         (7)  Foreign Purchasers.
         (8)  U.S. Government.

    The producer surplus losses in the fiber market are distributed to the
domestic and foreign miners and millers in a ratio of 1:10.9.^  This ratio
can be changed interactively by the user, if desired (refer to User's Manual
for details).

    For all product markets that have inports, i.e., markets with a
consumption-«production ratio greater than one, the short-run producer surplus
losses, if any, are divided between domestic and foreign primary processors in
the ratio of domestically produced quantity to imported quantity.  Since
foreign producers of goods are assumed to be identical to domestic producers,
this is the only further allocation of producer surplus losses that is
required.

    The consumer surplus losses are all allocated to the domestic secondary
processors/consumers.   Foreign consumers do not experience any surplus losses
since they are assumed to have viable alternatives.  However, consumer surplus
gains in markets with exports, i.e., markets with a consumption- production
ratio less than one,  are divided between domestic and foreign consumers in the
ratio of domestically consumed quantity to the exported quantity.

    The distribution as described above gives the gross distribution of losses
and/or gains experienced by the participants in the market associated with
asbestos. However, for any form of regulation involving fiber phase-down, the
allocation of the rights to purchase or use fiber to the parties identified by
the user (refer to User's Manual) are added to the losses/gains identified
above.  This gives the actual distribution of losses/gains across all parties
after allocating these rights.

    The net world welfare loss is obtained by summing the losses/gains across
all parties in the world.  The net U.S. welfare loss, on the other hand, is
obtained by summing the losses/gains for domestic miners and millers;
importers of bulk fiber, mixtures, and products; domestic primary processors;
and domestic secondary processors/consumers.

    The discounted welfare analysis by markets and by party are available for
all discount rates specified by the user.  The User's Manual should be
consulted for specifying scenarios, discount rates, changing default settings,
and running the ARC model.
     •*  91.6% of asbestos fiber consumed in the U.S. is supplied by foreign
miners and millers.  United States Department of the Interior.  "Asbestos,"
reprint from the 1985 bureau of Mines Minerals Yearbook, Washington, B.C.

                                   A.3-26

-------
    3.  ARCM ComputerCode

    This section provides a copy of the FORTRAN computer code for the ARCM.
The code is "commented" so that the purpose and operation of each section of
the program are clear.

    In order to simulate declining substitute prices and engineering controls
on aftennarket brakes, two standard ARCM subroutines are modified and an
additional subroutine is added.  This is done because the "standard" ARCM that
handles phase-down of fiber usage (and normal bans) is not capable of handling
the interactive "stock flow" issues that arise when aftermarket brakes are not
banned within four years of the OEM brakes,  (The baseline of the aftermarket
brakes is dependent on the number of OEM brakes produced with a four year lag
because the life, of a brake is assumed to be four years.)  These subroutines
have appropriate "comments" at the beginning of their listings.
                                    A.3-27

-------
ARCW.FOR                      Tuesday May 31,  1988  12:00  AM                        Page 1
    1 c
 3 c
 4 c     ASBESTOS REGULATORY COST MODEL (ARCH) : MAIN PROSRAM
 5 c
 6 c     Version 6.31  : Hay 31, 1988.
 7 c
 8 c     Program written fay:
 9 e
10 c                           Vikrant yidge
11 c                           ICF Incorporated
12 e                           9300 Lee Highway
13 c                           Virginia 22031-1207
14 c
15 c                           (703) 934-3000
16 c
17 c     Accompanying Documentation:
18 c
19 c           1. User's Manual
20 c           2. Technical Support Document
21 e
22 c _
23 c                            "
24 c
25 Sineludes'stdsub'
26 * large
27 c
28 c
29       program   arcm
30 c
31 Sincluder'stdvar'
32 $include:'vars.cran'
33 c
34       character istr£6)*S5
35 c
36 c _
37 e
     e                     "•                                       — —
  38 c            this section prints the opening statement on the screen
  39 c _
  40 c                           ' -
  41 c
  42       call vinit
  43       call crt els
  44       call box~{0,3,15,63,vnonti>
  45       cell pcsa (1,17,'EPA/OTS Asbestos Regulatory Cost Model (ARCM)'c,
  46       -           vbold)
  47       call pes  <2,17,'                 Version 6.3' c)
  48 c
  49       jstr(1)*'This program models the economic impacts and costs of c
  50       istr{2)='asbesto$ fiber and product regulations.  It permits a'c
  51       istr£3>s'vanety of regulatory options to be implemented and'c
  52       f str(4)*'al lows flexibility m their implementation.  For'c
  53       istr(5)='assist8ttee in using this model please refer to the'c
  54       istr(6)='acco»panying user"s manual and related documentation.'c
  55 c
  56       do 1 i=1,6
  57        call  pcs (!+7,13,istr(i5>
  58 1     continue
  59 c
  60       call pes (20,20, 'Please respond to queries as indicated. 'c)
  61       call pcs (24, 25, 'Press eny key to eontinue'c)
  62       call setcur (vy,vx)
  63       ipse=key getcO
  64 c
  65       call eeop (5,0)
  66       call pes (9, 20, 'Refer any specific questions regarding'c)
  67       call pcs £10, 20, 'operation of this program to:'c>
  68       call pcs (12,30, 'Vikriw yidge'e)
  69       call pcs (13,30, 'ICF Incorporated' c)
  70       call pcs (14, 30, '9300 Lee Highway'c)
  71       call pes £15, 30, 'Virginia 22031-1207'c)
  72       call pes (17,30, '(703) 934-3000'c)
  73 c
  74       call pcs (24, 25, 'Press any key to eontinue'c)
  75       call seteur (vy,vx)
  76       ipse=key getcO
  77 c
  78       call eeop (5,0)
  79       call pcsa £12,25,'  Initializing... 'c.vrev)
  80       call setcur (vy,vx-1)

-------
ARCH.FOR                      Tuesday May 31,  1988  12:00 AM                       Page 2


   81 c
   82    ,   call sinit
   83       call asbin
   84 c
   85 c          			
   86 c
   87 c  this section sets up the product demand curves for all  markets,  transforms
   88 c  data from year of data (fbyd} to specified baseyear,  and calculates  quasi-
   89 c  rent perpetuities by including the reformulation cost perpetuities.
   90 c			
   91 c	'	
   92 c
   93       do 300 1=1,np
   94 c
   95         do 3001 js1,nsub(i>
   96             a={1«-fdisert)**ns(i,j)
   97             ba(1+fdisert)**na(i>
   98 c
   99             do 199 iy=1,ie
  100               if (ns(i,j) .ne.  r»{O)
  101      -          aps(iy,i,j>*8ps*{a/b>*(b-1)/(e-1>
  102 c
  103               if («ps(iy,i,j> .It. epp{1,i» then
  104                 aps(iy,i,j)=epp(1,f>
  105               endif
  106 199         continue
  107 c
  108 3001     continue
  109 c
  110         if (nsub(i) .eq. 1) then
  111           ps(1,i,1>=aps(1,i,1)

  113 c         m }'  "0mS ''
  114           do 4641 iy=2,ie
  115             if (multsub) then
  116               ps(iy,i,1)=aps(iy,i,1)
  117             else

  119             endif
  120 4641       continue
  121 c
  122         else
  123           insub=0
  124           do 201 j<=1,nsub{i>
  125             do 2011 k=1,insub
  126               if {aps{1,i,j}  .eq. ps(1,i,k» then
  127                 ms{i,k)=ns(i,k)+8ms(5,j)
  128                 go to 201
  129               endif
  130 2011         continue
  131 c
  132             insub^insub*!
  133             ps(1,i,insub)saps(1,f,j>
  134             ms(i,insub}=Bms(i,j)
  135 c
  136   ,.          do 4642 iy=2,ie
  137     '          if (multsub) then
  138                 ps(iy,f,insub)»aps(iy,f,j)
  139               else
  140                 ps(iy,t(insub}=ps(1,i,insub>
  141               endif
  142 4642         continue
  143 c
  144 201        continue
  145           nsubd')=insub
  146 c
  147           do 4630 iy=1,ie
  148             do 4631 j=1,nsub(i}-1
  149               do 46311  k=j+1,nsub(i)
  150 c
  151                 if (ps(iy,i,j)  .eq. ps(iy,i,k))  then
  152                   call  eeop (5,0)
  153                   call  setcur (12,0)
  154                   write (*,*) '     PRICES  OF SUBSTITUTES STIiL EQUAL'
  155                   write (*,*) '     reAR:',baseyr+iy-1,<  MARKET:'.Wp(i>
  156                   write (*,*) '     SUBSTITUTES:',j,k
  157                   write (*,*) '     PRICES:',ps(iy,i,j),ps(iy,i,k)
  158                   call  setcur (22,03
  159                   stop
  160                 endi f

-------
ARCH,FOR                      Tuesday Hay 31, 1988  12iOO AM                        Page  3
161 c
162
163
164
165
166
16?
168
169 c
170 46311
171 4631
172 4630
173
174 c
175 462
176
177
178 4621
179 c
180
181
182
183
184
185
186
187
188 c
189 c
190
191 c
192
193
194
195
196 c
197
198 c
199
200 c
201
202 t
203
204
205
206
207
208
209
210
211 357
212 c
213
214 c
215 300
216 c
217 c
218 c
219
220
221
222 c
223
224
225 c
226
227 c
228
229
230 4638
231 c
232
233
234
235 c
236
237
238 .
239
240

if (ps(1y,i,j) .gt. ps(iy,i,k}} go to 46311
ptemp=ps
if (iy .eq. 1} enrtempsms(i,j)
ps{iy,f,j}=ps(iy,i,k)
if (iy .eq. 1) msCi, j)=ms{i,k)
ps(iy,i(k>=ptemp
if (iy .eq. 1) =emtenp

continue
continue
eorrt i nue
endif

count=0
do 4621 j=1,nsub(i)
count=eount+ms( i , j )
continue

if (count .ne. 1.0} then
call eeop (5,0)
cstl setcur (12,0)
write (V(5x,2a,i2,a,f14.7}'> 'MARKET SHARE(S) OF '
'SUtSTllUtES in MARKET ',idp(i},' ADD TO ', count
caU'setcur (22,0}
stop
endif


iinpinfd"}*. false.

if (cprat(i) .eq. -1} then
cprat(i)=1
inpinf (i)=.true.
endif

if (cprat(i) .gt. 1) epq(1,i5=epq(1,i}*cprat(i)

bbpq(i)=epq(1,i>

fqeC 1 }=f qe( 1 J+epq( 1 , i >*a*rt< i )

idif=baseyr-ibyd
do 357 ij=1,idif
if (ij .It. 15} then
ig=ij
else
ig=15
endif
epq(1,i>=epq(1,i)*{1+grthrt(i,ig}>
continue

bepq(1,i}sepq(1,i}

continue



slope=fpe(1>/(selast*fqe{1 )}
rlnt=fpe(1}-stope*fqe(1}
if (selast .eq. 1) Mnt=0

bbfq»fqe(1)
fqe(1}=0

yr-1

do 4638 i=1, np
fqed >sfqe(1)+epqC1 , i }*ant( i }
continue

afpe=fpeC1)
fpe(1)Brint+slope*fqe<1)
if (fpe(1) .gt. afpe) go to 44444

do 468 i»1,np
aepp( i }*app(1 , i 5
epp( 1 , i )=(f pe( 1 > -af pe)*awt( i )+epp( 1 , i )
bepp(1,i)=epp(1,i>
do 4681 j«1,nsiA>(i)

-------
ARCH.FOR                      Tuesday May 31, 1988  12:00 AM                       Page 4
241
242
243 4681
244 c
245
246
247
248
249
250
251
252
253 c
254
255
256
257 4682
258 c
259 c
260 c
261 c
262 c
263 c
264 c
265 4683
266
267
268 4688
269
270
271
272 c
273
274
275
276
277
278
279 c
280 468
281 c
282
283
284 c
285 c
286
287 e
288 c
289 c
290 c
291 c
292 c
293 c
294 1111
295 c
296
297 c
298
299
300 c
301
302
303
304
305
306
307
308 4001
309 c
310
311
312 c
313
314
315
316 c
317 c
318 c
319
320 c
qs(1,l, j)sepq(1,i)*«s*epq(1 , i )+rcost( i }
avc{ i )=epp( 1 . i > - (qrarea{ j )/epq{ 1 , i »
elseif (ccostd) .gt. 0} then
avc( f )aepp( 1 , i }-ccost{ 1 5
else
go to 4683
endif

s«qr{ i }=1
do 4682 j=1,nsyb(f)
lnsub(i,j}=.trye.
continue



adjustment of steps in export -oriented markets.


if {epratci) .It. 1) then
do 4688 js1,nsub(i>
qsC1,i,j)=qs(1,i,j)*cprat
bfqe(1)=fqt(1>


yr*2



this section awdifies the product demand curves annually.



qeap(yr )=qcapm(yr >

do 400 1*1, np

i g j=baseyr- ibyd*yr- 1
if (Igj -it. 15) igj=15

do 4001 j=1,nsub{i)
qsCyr, i , j)*qs(yr-1 , i , |)*(1+grthrt{ i, igj»
if (j .eq. 1) then
qs1(yr,i , j)sqs
endif
continue

rq=qs1 .eq. 1) then
qrareaC i >=ccost( i }*rq+rcost( i 3
endif . .

**** engineering control cost calculation ****

if (rq .ne. 0) ecost{i)=+vecost(i)*rq)/rq

-------
ARCH.FOR                      Tuesday Hay 31,  1988  12:00 AM                       Page 5


  321         if (exmpt(idp(i))) then
  322           if (qeap(yr) .eq. 0) then
  323             qeapm(yr)=qcapm(yr)+(8wt(i)*qs1{yr,i,nsub(i)»
  324           else
  325            qcaptyr)=qcap(yr)-(aHt(i)*qs1{yr.i.nsub(i))>
  326 c
  327            if (qcap{yr) .It. 0) then
  328              coll eeop (5,0)
  329              call seteur (12,0)•
  330              write t*,'{10x,a,i4//)') 'MODIFIED  FIBER  CAP < 0  IN  '//
  331      -                                'YEAR  ',baseyr+yr-1
  332              write (*,'(2(10x»i,f13.7/))') 'INPUT  CAP    «  ',qeapfn(yr),
  333      -                                    'MODIFIED CAP =  <,qeap(yr>
  334              write (*,'(/10x,a,i2)') 'ERROR  AT EXEMPTED PRODUCT #'
  335      -                               idp{i)
  336              call setcur (22,0)
  337              stop
  338            endif
  339 e
  340           endif
  341         endif
  342 400   continue
  343 c
  344       call iddc (0)
  345       call tddc (0)
  346       call eqpq
  347       if (afpe .ge. fpe(yr» go to  2222
  348 c
  349 44444 iyr»yr+baseyr-1
  350       call eeop (5,0)
  351       call setcur (12,0)
  352       write (*,'(1Sx,a//)'> 'BASELINE FIBER  PRICE  >  '//
  353      -                      'DATA YEAR FIBER PRICE'
  354       Hrite (*,'{10x,a,i4,a,f14.7/)') 'Baseline  fiber  price for ',
  355      •                                iyr,'  = ',fpe(yr)
  356       write (*,'(10x,a,i4,a,f14.7)')  'Data year  C'.ibyd,
  357                                      *} fiber price  = ',afpe
  358       call setcur <22,0)
  359       stop
  360 c
  361 c
  362 2222   bfpe(yr)=fpe(yr>
  363       bfqe(yr)=fqe(yr)
  364       do 210  i=1,np
  365         beppCyr,j>-epp(yr,i)
  366         bepq(yrri)=epq(yr,t)
  367 c
  368 c setting  price of  exports  equal to baseline price.
  369 c
  370         if (cprat(i)  .It.  1)  then
  371            ps(yr,i,nsyb{i))=bepp{yr,i)
  372         endif
  373 c
  374 210    continue
  375 c
  376 c adjustment  of  fiber demand curve to reflect export
  377 c markets'  last  step adjustment.
  378 c
  379
            380        if  ((enf  .or. Ibf)  .and.
  381       -     (((option .eq.  1)  .and,(ibchk .gt.  yr))  .or.
  382      -     ((option  .eq. 2)  .and. (ibehk .gt.  yr) .and.
  383      -      (qcap(yr)  .gt. 0» .or.
  384      -     ((option  .eq. 3)  .and. (qcap(yr) .gt. 0))))  then
  385         call enlbl
 .386         call  idde (1)
  387       endi f
  388 c
  389       call tddc  (1)
  390        if (option  .eq. 3) go to 2339
  391        call bancsqr
  392        call eqpq
  393  c
  394        if (option  .eq. 1) then
  395          if (fpe(yf> .eq. 0) fpe(yr)=rim
  396         call aronban
  397         so to  8888
  398        endif
  399  c
  400  2339  capr=.false.

-------
ARCH.FOR                      Tuesday May 31,  1988  12:00 W                        Page 6
401
402
403
404 c
405 8888
406
407 c
408
409
410
411 c
4t2
413
414
415
416
417
418
419 c
420
421
call fpc1234
call fppfpq
ff (exf) call exempt

yr*yr+1
if {.not.Cyr .gt. ie» go to 1111

call benout
call asbout
call pesa {15,38,' completed 'c,vrev)

if (fr«we(3) .rw. 'Ipt1'> then
call pcss <1S,15,'T0 PR1MT OUTPUT FILE '//
fname{3X1:teneh(fnane(3m//'
call pcsa {19,15, " 'ff ARC« '//fnane(3>(1:
'"AT THE OOS PI?(»IPT.'c,\*told}
endff
call seteur (22,0).

stop
end













ENTER'C.vbold)
lencb(fname<3»)//







-------
AREAS678.FOR                  Tuesday May 31,  1988   12:00 AM                        Page 1
    1 c.	
    2 c         ™	
    3 e
    4 c     ARCH :  CALCULATION OF AREAS 5,  6,  7 AND 8
    5 c
    6 c     Version 6.31  ;  May 31, 1988,
    7 c
    8 c     Program written by:
    9 c
   10 c        Vikram Widge,  !CF  Incorporated, 9300 Lee Hwy., VA 22031-1207
   11 c        (703) 934-3000
   12 c
   13 c         	
   14 c'	'	
   15 c
   16 $large
   17 c
   18 c               	
   19 c~~	;	
   20 c               This  subroutine calculates AREAS 5, 6, 7, and 8.
   21 c
   22 c—	
   23 c
   24       subroutine 8rea5678 (i)
   25 c
   26 $inelude;'vars.cim'
   27 c
   28 c
   29       area5(yr,i}= .eq.  0)  .or.  (fpq(yr,i) .eq. 0)) then
   42         0rea7(yr,i}*0
   43         do 90  j«1,nsubO>
   44           if  <.not.(lnsubCi,j»>  90 to 90
   45           areaSCyr,i)=area8(yr,i >*di f*qs(yr,i,j >
   46           areafipCyr,i}=»rea8p{yr,i}+dif*qs(yr,f,j)*(1/fdisert-1)
   47           lnsubCi,j>».false,
   48 90       continue
   49         swqr(i)eQ
   50         return
   51       endff  '
   52 c
   S3       do 100  j»1,nsub(i)
   54         if (.not.dnsubci,j)» return
   55         if =area7(yr,i>*dif*(fpq{yr,i)-qs1(yr,i,j-1»
   63           endi f
   64           area8(yr,i >*aren8(yr,i)+dif*(qs1*area8p(yr,1>+dt f*qs(yr,i,j}*<1/fdi scrt* 1)
   68           lnsub{i,j)=.false.
   69           if (j  .eq. 1) swqr(i)=0
   70         endff
   71  100    continue
   72 c
   73       return
   74       end

-------
ARQMBAN.FOR                   Tuesday May 31,  1988  12:00 AH                       Page 1
1 c
2 c 	
3 c
4 c
5 c
6 c
7 c
8 c
9 c
10 c
11 c
12 c
13 c
ARCH : CALCULATION OF AREAS UNDER SANS ONLY
Version 6.31 ; May 31, 1988.
Program written by:
Vfkraw Wldge, ICF incorporated, 9300 Lee Bwy., VA 22031-1207
(703) 934-3000
14 c 	 " 	 "~ 	 	 	
15 c
16 $ targe
17 c
18 c
19 c
20 c
21 c
22 c
23 c 	
24 c
25
26 t
This subroutine calculates the CS sains
and PS tosses when only bans take place.
subroutine aronban
   27 $fnclode:'vars.cim'
   28 c
   29 c
   30       pedif*bfpe{yr)-fpe{yr)
   31       area2(yr)*pedff*fqe(yr)
   32       8re84
   36 230   continue
   37       return
   38       end

-------
ASBIN.K3R                     Tuesday Hay 31, 1988  12:00 AH                       Page  1
    1 c	
    2 c	
    3 c
    4 c     ARCM : USER AND DATA INPUT
    5 c
    6 c     Version 6.31 : Hay 31, 1988.
    7 c
    8 c     Program written by;
    9 c
   10 c        Vikrant Widge, ICF Incorporated, 9300 Lee H«y.,  VA 22031-1207
   11 c        (703) 934-3000
   12 c
   13 c	
   14 c            '	~	
   15 c
   16 $include:'stdsub'
   17 Slarge
   18 c
   19 e__	
   20 c~~	
   21 c             This subroutine accepts data from user interactively
   22 c             and reads data from input files.
   23 e	_	
   24 c              :                                                '	~
   25 c
   26 c
   27       subroutine asbin
   28 c
   29 $include:'stdvar'
   30 $include:'vars.cmn'
   31 e
   32 c
   33       real      taps{25,i«,ks),sub dec(ks)
   34 c
   35       integer   pid(10),beyr
   36 c
   37       character res,dstr1*65,dstr2*52,cistr4*40,estr2*60,
   38      -          estr3*60,fstr1*60,fstr2*53,dstr5*40,dstr9*65,
   39      -          dstr7*65,dstr8*54,dstrO*65,fstr3*60,nye*4,nzc*4,
   40      -          fstr4*53,prm1*60,pnn2*65,cc(c*10
   41 e
   42       logical   ccap
   43 c
   44 c	
   45 c	
   46 c              this  section obtains the inputs from the  operator.
   47 c	
   48 c       "                            '    ~     '	
   49 c
   50       call eeop (5,0)
   51       call pcs (7,10,'Three regulatory scenarios are supported '//
   52      -               'by this program'c)
   53       call pcs (10,25,'1. BAN OF PRODUCTS ONLY'c)
   54       call pcs (12,25,'2. BAN OF PRODUCTS AND AN 'c)
   55       call pcs (13,25,'     ANNUAL FliER CAP'c)
   56       call pcs (15,25,'3. ANNUAL FIBER CAP ONLY'c)
   57 5550   call pcs {19,22,'Enter # of option desired HH'c)
   58       optionsjchk (1,3)
   59       if (option  .eq. -99) BO to 5550
   60 c
   61       call eeop (5,0}
   62       call pesa (8,28,' SIMULATION PERIOD 'c.vrev)
   63 5551   call pes (12,20,'Please enter BASE year MM'c)
   64       baseyrsichk (-99,-99)
   65       If (baseyr  .eq. -99) go to 5551
   66
             67 5552  call  pcs (14,20,'Please enter END year   MM'c)
   68       endyr=iehk  (baseyr-t-1,-99)
   69       if (endyr .eq.  -99) go to 5552
   70       call eeop (22,0)
   71 c
   72 c     if (endyr .le.  baseyr) then
   73 C       call  pcsa (22,15,' EM5 YEAR SHOULD SE GREATER THAN BASE YEAR  'i
   74 c    -            vrev)
   75 c       go to 5551
   76 c     endif
   77 c
   78.       ie=endyr-baseyr+1
   79       if ((endyr-baseyr) .gt, ny-1) then
   80         write 
-------
ASBIW.FOR
                              Tuesday May 31,  1988   12:00 AN
Page 2
81
82
83
84
85 c
86
87
88 c
89 4780
90
91
92 c
93
94
95
96 46921
97 4692
98 c
99 4780!
100
101
102
103 c
104
105
106
107
108 22
109 c
110
111
112
113
114
115 c
116
117
118
119 c
120
121
122
123 9571
124 957
125 c
126
127
128 c
129
130
131
132 c
133
134
135 55
136 44
13733
138
139 c
140 4922
141 c
142
143
144 4923
145
146
147

149
150
151
152 c
153 416
154
155
156
157
158
159
160
calt pcsa {22,15,' THIS P8QORAH SUPPORTS A SPAN OF '//nyc(1:2>//
' YEARS 'c,vrev)
go to 5551
endif

ccap=. false.
fnaroe(1)='capenn.dat'

if {{option .eq. 1) .or, (option .eq. 2)) then
call eeop {5,0}
calt pcsi (8,28,' PRODUCT 8ftN SCHEDULE 'e.vrev)

do 4692 iyy=1,ny
do 46921 fxy*1,ip
isfoan(tyy,ixy)!sO
continue
continue

calt pcs {12, 5, 'Enter the number of years in '//
'which bans will take place MM'e}
call yr chk (byrs,0,22)
call eeop {9,0}

do 22 n*1,byrs
write (nye,'{i2)') n
call pcs (12,15, 'Enter ban year #'//nyc{1:2>//' NH'c)
call yr_chk (byear{n>,1,22>
continue

ibchk*99
call eeop (9,0)
do 33 n=1,byrs
beyr»byear(n}-baseyr+1
call nprd_chk 
if (iban .eq. 99} then
ibchk=beyr
byrs=n

do 957 lHPl,ip
do 9571 ll»beyr,ie
isban{ll,im)=1
continue
continue

90 to 4922
endif

call eeop {9,0)
do 44 nn*1,iban
call tsca (nn,nban,'b',12)

do 55 ll-i»yr,ie
isban(ll,nban}=1
continue
continue
continue
endif

if (option .eq. 1) 90 to 9966

call eeop (5,0)
call pcsa {8,28,' F1SER CAP SCHEDULE 'c,vrev}
cell pcs (12, 5, 'Please enter fiber end amount {tons} MM'c)
endamt=rchk {OdO,-99dO}
if (endamt .eq. -99.} go to 4923

148 415 call pcs (14, 5, 'What year will phase down terminate? HM'c)
call yr chk 
-------
ASBIN.FOR                     Tuesday May. 3t, 1988  12:00 AH                       Page 3
161
162
163
164 c
165 418
166
167
168 66
169 c
170 4792
171 c
172
173
174
175
176
177
178
179
180
181
182
183
184
185
186
187
188
189
190
191
192
193 45821
194 4582
195 c
196 4583
197
198
199
200
201
202
203
204 c
205
206
207
208
209
210 c
211
212
213

215
216
217
218

220
221
222
223 836
224 c
225
•226
227

229
230
231
232

234
235
236
237
238
239
240 c
call cchk (fneme(D)
call eeop (22,0)
go to 416

read (1,*> (qcapmd ),i=2,is-1)
do 66 nsis.ie
qcapm(n)=endamt
continue

if (option .ne. 2) go to 4583

do 4582 i=2,ie
if (qcapmO") .ne. 0) go to 4582
ieby=i+baseyr-1
do 45821 n*1,byrs
if (ieby .gt. byear(n)} go to 45821
call eeop (5,0)
call pcsa (8,3,' YOU HAVE SPECIFIED PRODUCT BAMS TOR '//
'YEAR(S) AFTiR FIBER CAP GOES TO ZERO 'C,vrev>
write (nye,'(i4)') ieby
call pcs (10, 10, 'Fiber cap goes to zero in '//nyc//' 'c>
call pcs (12,10, 'One or more products have been banned '//
'in the following years:'c)
call setcur (14,0)
write (*,'(t15,4<5(i4,3x)/))') (byeartj), j=1,byrs)
call pcsa (20,8,' YOU WILL BE PROMPTED FOR BAN AND '//
'FIBER CAP SCHEDULES AGAIN 'C.vrev)
close (1)
call pcs {24,25, 'Press any key to eontinue'c)
call seteur (vy,vx)
ipseskey peteO
go to 47SB
continue
continue

cstr2=' 'i
estr3*< Year Fiber Cap Amount (tons)'e
call eeop (5,0)
call pcsa (5,28,' FIBER CAP SCHEDULE 'e,vrev)
call pcs (6,13,cstr2>
call pcs (8,13,estr3)
call pcs (9,13,cstr2)
call setcur (11,0)

if (eendyr .eq. endyr) then
ixeie
else
i x=eendyr -baseyr
endif

do 836 i=2,ix
jssQ+l

214 if (i .gt. 11) then
call more
j=20
endif

219 write (nyc,'{i4)') baseyr+i-1
write (eqc,'(f10,2)'} qcapm(i)
call pcs (j, 22, nyc//' 'c)
call pcs 
write (cqc,'(f10.2)') endamt
call pcs (j,vx-f-13,cqc//( 'c)
endif


-------
ASBIN.FOR                     Tuesday Hay 31,  1988  12:00 AM                       Page 4


  241       if (ix .gt. 9} ix=1Q
  242       call pcs (ix+11,13,cstr2)
  243       call pes (ix+13,10,'Do you want  to change the annual  '//
  244      -                   'fiber caps?  (Y/H) MM'c)
  245       call yncbk (*4775,*777B)
  246 c
  247 4775  ccap=.true.
  248       go to 4922
  249 c
  250 4777  do 7777 kk=baseyr+1,eendyr-1
  251         write 
  256 	    if (qeapmCU)  .eq. -99.) so to 4778
  257 7777  continue
  258 c
  259       do 77771 kk*eendyr,endyr
  260         Il*kk-faaseyr+1
  261 	    qcapm(U)=efidamt
  262 77771 continue
  263       go to 4792
  264 c
  265 7778  prm1«'		        |   »e
  266       prro2='Party             '            Tormage'c'
  267       rewind 1
  268       read (1,*)
  269       read (1,*} {palocei),i=l,9)
  270 c
  271 9879  call eeop <4,0)
  272       call pcsa {4,28,'  PERMIT ALLOCATION 'c,vrev>
  273       call pcs (5,1Q,prm1)
  274       call pcs (7,10,prm2)
  275       call pcs <8,1Q,prm1)
  276 c
  277       do 6890 i*1,9
  278         j=i+9
  279         write (nyc,'(i2)') i
  280         call pcs //'  'c>
  281         write //', '//permCi)//'  'e)
  287       call pcs 
  289 c
  290       call pcs (23,10,'Do you want  to  change any of these '//
  291      -                'allocations  (Y/N> MM'c)
  292       call ynchk <*9876,*9877)
  293 c
  294 9876  call eeop (23,0)
  295       call pcs (23,10,'Enter  ID # of party with new allocation  '//
  296      -               '{0 to end) MM'c)
  297       isichk (0,9)
  298 c
  299       if (i .eq. -99)  call pty chk  (0,*9876)
  300       if {I .eq. 0) 90 to 9877"
  301 c
  302 98761 call pcs (23,10,'Enter  new allocation for '//
  303      -     perm{i)(1:lench(perm(i)3)//'  MM'c)
  304       paloc(i)=rchk (OdO,-99dO)
  305       if (paloe(i)  ,eq.  -99.) go to  98761
  306
            307       write  (nyc,'(i2)')  i
  308       cell pcs (i+9,13,nye(1:2)//'.  '//pena(i)//'  »c)
  309       write (cqc,'(f10.2)') paloc(i)
  310       call pcs (vy,vx+6,cqc//' 'c)
  311       go to 9876
  312 c
  313 9877  call eeop (23,0)
  314 2469  call pcs (23,10,'Enter  # of parties to whom permits are to  '//
  315      -                'be allocated  MM'c)
  316       ires=ichk (1,9)
  317       call eeop (24,0)
  318 c
  319       if (ires .eq. -99) call pty_chk  (1,*2469)
  320 c

-------
ASBIH.FOR                     Tuesday May 31,  1988  12sOO AM                        Page 5


  321       call eeop (23,0)
  322       do 9965 1=1,10
  323         pflag(i)=0
  324 9965  continue
  325 c
  326       do 99651 ii=1,ires
  327         write (nye,'(i1)')  ii
  328 2472    call pcs (23,10,'Please enter  ID of  party #'//nyc(1:1)//' MK'c)
  329         pid(ii)*ichk (1,10)
  330         call eeop (24,0)
  331 c
  332         if (pid(ii)  .eq. -99)  call  pty chk (0,*2472)
  333         if C(pid(fi) .eq. 10)  .and.  (ires .ne.  1})
  334      -     call pty  chk (2,*2469)
  335 c                 ~
  336         pflag(pid(ii))*1
  337 99651 continue
  338 c
  339 9966  if ({option .eq. 1) .and.  (iban  .It. ip))  go to 8693
  340 c
  341  -     exf=.false.
  342       call eeop (4,0)
  343       call peso (8,28,' PRODUCT  EXEMPTIONS 'e.vrev)
  344       call pcs (12,5,'Do tny products  get exempted from  '//
  345      -               'regulation?  (Y/N)  HM'e)
  346       call ynehk (*8692,*8693)
  347 c
  348 8692  exf=.true.
  349       call pcs (14,5,'Please enter  the number  of products '//
  350      -               'to be  exempted MH'c)
  351       ixmpt=ichk (0,ip}
  352       call eeop (16,0)
  353 c
  354       if (ixjipt .eq. ip) then
  355         call pcsa (18,20,'    YOU HAVE EXEMPTED  ALL PRODUCTS 'c.vrev)
  356         call pcsa (19,20,'  IS TH6R6  ANY  POINT  IN CARRYING ON ?lI 'C,
  357      -                  vbold)
  358         call setcur  (23,0}
  359         stop
  360       endif
  361 c
  362       if ((ixnpt .It.  1) .or.  (ixnpt .gt. {ip-1>5> then
  363         write (nyc,'Ci2>'>  ip
  364         cell pcsa (22,10,' NUMBER OF PRODUCTS  SHOULD BE  GREATER '//
  365      -                   'THAN  1 OR  LISS THAN  '//nyc(1t2>//' 'c,vrev>
  366         90 to 8692
  367       endif
  368 c
  369       do 86921 nn=1,ixmpt
  370         Nrite (nyc,'(i2)'> nn
  371         call tsca (nn»ires,'x',16)
  372         exmpt (ires)=.true.
  373 86921 continue
  374 c
  375 8693  If ((option .eq. 1> .end.  (iban  .eq. ip»  go to 8695
  376 e
  377       enf*.false.
  378       lbf=.false.
  379 e
  380       call eeop (4,0)
  381       call pcsa (8,28,'  6«G!NEER1NG  CONTROLS 'e,vrev)
  382       call pcs (12,5,'Do any products  have engineering controls '//
  383      -               'put on them?  (Y/H) MM'c)
  384       call ynchk (*8682,*8684)
  385 c
 386 8682  do 5692 iyy=1,ny
  387         do 56921 ixy~1,ip
  388           enctKiyy, ixy)=. false.
  389 56921   continue
  390 5692  continue
  391 c
  392       enf=.true.
  393 c
  394       call pcs (14,5,'Enter  the  number of years  in which '//
  395      •  'engineering'c)
  396       call pcs (15,5,'controls will  be put on products IW'c)
  397       call yr chk (ienyrs,0,16)
  398       call eeop (9,0)
  399 c
  400       do 522 n=1,ienyrs

-------
ASBIN.FOR
                              Tuesday May 31, 1988  12:00 AM
Page 6
401
402
403
404
405 522
406 c
407
408
409
410
411
412 c
413
414
415
416 c
417
418
419
420 59571
421 5957
422 c
423
424
425 c
426
427
428
429
430
431 555
432 544
433 533
434 c
435 c
436 8684
437
438
439
440
441 c
442 8688
443
444
445 66921
446 6692
447 c
448
449 c
450
451
452
453
454
455 c
456
457
458
459
460 622
461 c
462
463
464
465
466
467 c
468
469
470
471 c
472
473
474
475 69571
476 6957
477 c
478
479
480 c
Mrite (nyc,'(i2)') n
call pcs (12,15, 'Enter CONTROL year #'//nyc(1:2)//' HM'c)
call eeop (14,0)
call yr_chk (enyr(n>,1,14)
continue ~

ienehk*99
celt eeop (9,0)
do 533 n=1,ienyrs
i enyr=enyr(n) -baseyr+1
call nprd_chk (ien,14,'e',enyr(n))

tf (ien .eq. 99) then
ienehk=ienyr
i eny rs— n

do 5957 lm=1,ip
do 59571 ll=ienyr,ie
enctUU,la)*.true.
continue
continue

go to 8684
endif

cell eeop (9,0)
do 544 nn»1,ien
call tsca (nn.nen. 'e',12)
do 555 ll=ienyr,ie
enct 1 ( U ,nen)=. true.
continue
continue
continue *


call eeop (4,0)
call pcse (8,28,' PRODUCT LABELING 'c.vrev)
call pcs (12, 5, 'Do any products have labels '//
'put on them? (Y/N) We)
call ynchk (*8688,*8695)

do 6692 iyy-1,ny
do 66921 ixy»1,ip
label(tyy,ixy>=. false.
continue
continue

lbf=.true.

call pcs (14, 5, 'Inter the number of years in which'//
' labeling'e)
call pcs (15, 5, 'retirements will be introduced We)
call yr_chk (ilyrs,0,16)
call eeop (9,0)

do 622 n»1,Uyrs
write (nyc,'(i2)') n
call pes (12,15, 'Enter LABEL year #'//nyc(1:2)//< MM'c)
call yr_chk (lyr(n),1,14)
continue ~

i lchk=99
call eeop (9,0)
do 633 n»1,ilyrs
i lyr=lyr(n) -baseyr+1
call nprd_chk (ilbl,14,'l',lyr(n))

if (ilbl .eq. 99) then
i lchk*i lyr
i lyrssn

do 6957 l»=1,ip
do 69571 ll=flyrtie
label(ll,lm)=.true.
continue
continue

go to 8695'
endif


-------
ASBIN.FOR
                              Tuesday May 31,  1988  12:00 AM
Page ?
481
482
483
484
485
486 655
487 644
488 633
489 c
490 8695
491
492
493
494
495 c
496 8685
497
498 c
499 8686
500
501 c
502 8694
503
504 86941
505
506
507
508 c
509
510
511
512
513
514 c
515
516
517
518
519
520 c
521
522
523 8623
524
525
526
527 c
528
529
530
531
532 86922
533 c
534
535
536
537
538
539
540
541 c
542
543
544 c
545 8629
546
547 c
548
549
550
551
552 86291
553
554
555
556
557
558
559
560
call eeop (9,0)
do 644 nn=1,ilbi
call tsca (nn,nl,'l',12)
do 655 lt=ilyr,ie
label(ll,nl)=.true.
continue
continue
continue

call eeop (4,0)
call pcsa (8,28,' SUBSTITUTE PRICES 'c.vrev)
call pcs {12,5, 'Should different substitute prices be used'e)
call pcs {13,5, 'for each year of the simulation? (Y/N) MK'c)
call ynchfc (*8685,*8686)

muUsub=.true.
go to 8694

multsub=. false.
go to 8694

call eeop (4,0)
call pcsa (8,28,' DISCOUNT RATES 'c.vrev)
call pcs (12, 5, 'Please enter number of discount rates '//
'desired (upto 10) MM'e)
nodrt»ichk (1,10)
call eeop (14,0)

if (nodrt .eq. -99) then
call pcsa (22,10,' NUHiER OF DISCOUNT RATES SHOULD BE '//
'SPECIFIED BETWEEN 1 AND 10 'c.vrev)
80 to 86941
endif

dstr1='Please enter the discount rate(s) desired in decimal 'c
dstr8*' equivalent. For example, enter 5% as 0.05 or ,05'c
dstr9s' YOU HAVE ENTERED AN UNACCEPTABLE DISCOUNT RATE'C
call pcs {16,5,dstr1)
call pes (17,5,dstr8)

do 86922 1*1, nodrt
write (nyc,'(i2)') i
call pcs(19,5, 'Please enter discount rate #'//
nyc(1;lench(nyc))//' MM'c)
discrt(s)=rchk (OdO,-99dO)
call eeop (18,0)

if (discrt(i) .eq. -99.) then
call pcsa (24,13,dstr9,vrev)
go to 8623
endif
continue

dstr7« '/
'c
dstrO= Entity Value to be */
used' e
dstr4= 1. Percentage of foreign fiber supply'e
dstr5= 2. Elasticity of fiber supply'e
dstr9= YOU HAVE 6HTEREO AM UNACCEPTABLE PERCENTAGE' C

f sup=91 .60
selast=1 .46

call eeop (4,0)
call pcsa (8,30,' MISCELLANEOUS 'c.vrev)

call eeop (9,0)
call pcs (10,8,dstr7)
call pcs (12,8,dstrO)
call pcs (13,8,dstr7)
call pcs (15,8,dstr4>
write (cqc,'(f6.2)') fsup
call pcs (15,vx+9,cqc(1:6)//'X'c)
call pcs (16,8,dstr5)
write (cqc,'(f6.2)') selast
call pcs (16,vx+17,cqc(1:6)//' 'c)
call pcs (17,8,dstr7)
call eeop (18,0)
call pcs(19,8,'Do you want to change any of the above (Y/N} MM'c)

-------
AS8IN.FOR                     Tuesday May 31,  1988  12:00  AM                       Page 8
561
562 c
563 86Z2
564
565
566 c
567
568
569
570
571
572 c
573
574 e
575 8627
576
577 c
578 8624
579
580
581
582 86241
583
584
585 c
586
587
588
589
590 c
591
592
593 e
594 8625
595 86251
596
597
598
599
600 c
601
602
603
604
605
606 c
607
608 c
609 7783
610 c
611
612
613
614 7784
615
616
617 c
618
619
620
621
622
623
624
625
626
627 c
628
629
630
631
632 c
633
634
635 6661
636
637
638
639 c
640
call ynchk (*8622,*8627)

cat I pcs (21, 8, 'Please enter ID of item to be changed MM'c)
ires=iehk (1,25
call eeop (22,0)

if (Ires .eq. -99) then
call pcsa (24,15, ' YOU HAVE ENTERED AN UNACCEPTABLE OPTION 'c,
vrev)
go to 8622
endif

go to (8624,8625) ires

fsup=fsup/100.
go to 7783

call eeop (19,0)
dstr1=' Please enter the new percentage of foreign supply in'c
dstr2«'deciiBal equivalent, i.e., enter 80% as 0.8 or ,8 IW'c
call pcs (19,8»dstr1)
call pcs (20,8,dstr2)
fsup=rehk (OdO,1dO)
call eeop (21,0)

if (fsup .eq. -99.) then
call pcsa (24,17,dstr9,vrev5
go to 86241
endif

fsup*fsup*100.
go to 86291

call eeop (19,0)
call pcs (19, 8, 'Please enter the new elasticity of '//
'supply MM'c)
selast*rchk C-99dO,-99dO)
call eeop (20,0)
if (selast .eq. -99.) §o to 8625

if (selast .It. 1) then
call pCSS (24, 15,' AN ELASTICITY OF LESS THAN '//
'OHi IS UNACCEPTABLE 
-------
ASB1M.FOR                     Tuesday Hay 31, 1988  12:00 AM                        Page 9
641
642
643
644
645 c
646

648
649
650
651 e
652
653
654
655
656
65? c
658 6664
659
660 c
661
662
663
664
665 c
666
667
668
669 c
670 7781
671
672 c
673 7782
674 c
675 7799
676
677 c
678 7791
679
680 c
681 7792
682 c
683 6660
684
685 1924
686
687 c
688
689
690
691
692
693
694
695
696 c
697 1926
698 1927
699
700
701
702
703
704 c
705
-706
707
708
709
710 c
711 1929
712 2927
713
714
715
716
717
718 c
719
720
open (2,iostatsierr,file=fname{2),status='old')
if (ierr .l«. 0} go to 6662
call file_chk (0,2)
go to 6661


647 6662 call pcs (15,5,fstr3)
call pcs (16,5,fstr4)
call cchk (fnarne(4)}
call eeop {17,0}

ierr*Q
open {4,iostatsjerr,fUe=fname(4),statos='old')
if Cferr .le. 0) go to 6664
call file chk (0,4)
go to 6661

call eeop (4,0)
call pcsa (8,28,' OUTPUT OPTIONS 'c,vrev>

If {option .eq. 1} then
eresf=0
80 to 7799
endif

call pcs (12,5, 'Would you like e printout of the '//
'consistency check (Y/K) MH'c)
call ynchk (*7781,*7782)

eresf=1
go to 7799

cresfaQ

call pcs (14,5, 'Would you like a detailed printout (Y/N) MH'c)
call ynchk (*7791 ,*7792)

dprf*1
go to 6660

dprf=0

call pcs (16,5, 'Would you like the simulation output'c)
call pcs (17,5, 'to be routed to the printer or diskt'e)
call pcs (19,5, 'Please enter P or 0 HM'c}
call cchk (res)

if ({res .eq. 'P') .or, (res .eq. 
call eeop (14,0)

ierr=0
open (8,f i le=fname(8) , iostat=ierr,status='neH' )

-------
ASBIH.FOR                     Tuesday May 31,  1988  12:00 AM                       Page 10


  721       if (ierr .le. 0) go to 2929
  722       call file ehk (1,8)
  723       call ynchi" (*2929,*2927)
  724 c
  725 2929  call eeop £9,0)
  726 3927  call pcs {12,5,'Please enter none  of file where ALTERNATIVE '//
  727      -               Mndices'c)
  728       call pcs (13,5,'should be stored.  (include path if '//
  729      -               'necessary,) HM'e)
  730       call cchk {fname(9»
  731       call eeop (14,0>
  732 c
  733       ierr»0
  734       open (9,file*fname(9)riostats1err,status=*rtew')
  735       if tierr .le. 0) go to 3929
  736       call file chk (1,9)
  737       call ynchk" <*3929,*3927>
  738 e
  739 3929  call eeop (9,0)
  740 4927  call pcs (12,5,'Please enter name  of file where cost-benefit '//
  741      -               'TAlliS'"c)
  742       call pcs (13,5,'DATA should be stored. (Include path if '//
  743      -               'necessary,) We)
  744       call cchk (fr*oe(6»
  745       call eeop (14,0)
  746 c
  747       ierr=0
  748       open (6,fHe=ffiaiae(6),iostBt=ierr,st8tus='new',forni='unfonnatted')
  749       if (ierr .le. 0) go to 4929
  750       call file chk Cl,6>
  751       call ynchlc (*4929,*4927)
  752 c
  753 4929  call eeop (4,0)
  754       call pcsa (12,25,' Processing... 'c,vrev)
  755       call setcur (vy,vx-1)
  756 c
  757 c	
  758 c              '                                            ~    '	
  759 c                   this section reads the input data files
  760 c	
  761 c
  762 c
  763       read <2,*) fpe{1),fdisert,ibyd
  764 c
  765       i«1
  766 2125  read {2,'(i2,2x,a24)',end=2130) idp(i),desc(i)
  767       read (2,*) idp(i)fairt,reost{i),epp(1,i),epq(1,i),
  768      -           na(i),eprat(i),feeost idp(i),(grthrt(i,k),k*1,1S)
  780         read (2,*)
  781       else
  782         read (2,*)
  783         read (2,*)
  784         read (2,*) idp(i),CgrthrtCi,k),k=1,15)
  785       end if
  786 e
  787       read (4,*) idpCi),nsub(i>,(taps£1,i,j),ns(i,j),
  788      -                           affls(i,j),j=1,risub(i))
  789       read (4,*) idp£i),(sub decCj),j=1,nsi4>(i))
  790 c
  791       if (multsub) then
  792         do 2124 j=1,nsub(i)
  793           sps(1,i,j>"taps(1,i,j)*(1+sub  dee(j»**(baseyr-ibyd)
  794           do 21241 iy=2,ie
  795             sps{iy,i,j)=eps(iy-1,i,j)*(1+sub dec(j))
  796 21241      continue
  797 2124    continue
  798       else
  799         do 2123 j=1,nsub(i)
  800           do 21231 iy=1,ie

-------
ASBIN.FOR                     Tuesday May 31,  1988  12sOO AH                       Psge 11


  fSl -,--,       aps(iy,i,j)=taps(1,i,j>
  802 21231     continue
  803 2123    continue
  804       endif
  805 c
  806       do 2126 iks1,ny
  807         If (Cisbanm.idptm .eq.  1}  .and.  {.not.
  808      -     swban(fk,f>»1
  809 2126  cwitinue
  810       i*i+1
  811       go to 2125
  812 c
  813 2130  npM-1
  814 c
  815       close (1)
  816       close (2)
  817       close {4}
  818 c
  819       return
  820       end

-------
ASBQUT.FOR                    Tuesday May SI, 1988  12sOO AM                        Page 1
    \ c	
    2 £""°'"="~	
    3 c
    4 C     ARCH : OUTPUT SUBROUTINE
    5 c
    6 c     Version 6.31 : Kay 31, 1988,
    7 c
    8 c     Program written by:
    9 c
   10 c        Vikram Widge, ICF Incorporated, 9300 Lee Hwy., VA 22031-1207
   11 c        (703) 934-3000
   12 c
   13 c	
   14 c	—
   15 c
   16 $include;'stdsub'
   17 Slarge
   18 c
   19 c,	..	                      	
   20 c~            :           '	*	
   21 c            This subroutine writes the output to a file or printer
   22 c	
   23 c	'	~"	
   24 c
   25       subroutine asbout
   26 c
   27 Sincludei'stdvar'
   28 Sincludes'vars.cran'
   29 c
   30       real         psl(1Q>,csl(10>,a1t(ny>,a3t(ny>,v(10>,r(10>
   31 c
   32       character    opt*4Q,bopt*16,bans2*1QO,bans1*125,temp*4,
   33      -             temp1*125,ten|32*100   .
   34 c
   35       character*80 bstr1,bstr2,pstr1,fstr1»es1,es2,cs3,pQ,p1,p2
   36 c
   37 c
   38       if (option .eq.  1)  then
   39         opta'Product ban  only'
   40       elseif (option .eq. 2) then
   41         opt*'Product ban  and annual, fiber caps'
   42       else
   43         opts'Annual fiber caps  only'
   44       endif
   45 c
   46       if {ibgr .eq. 1> then
   47         bopt='Low Decline'
   48       elseif (ibgr .eq. 2}  then
   49         bopta'Moderate decline'
   50       else
   51         bopt='High Decline'
   52       endif
   S3 c
   54       if {fname{3> .eq. 'IptT') then
   55         p»brlc«M'
   56       else
   57         pgbrk="
   58       endif
   59 c
   60 c	
   61 c                                                '	
   62 c                   this  section divides all areas  by 1,000
   63 c                        	
   64 c	
   65 c
   66       do 8893  yn=1,ie
   67         a1t=0
   69         do 88931 j«1,np
   70           area5(yr,|)«area5(yr,j>/1000.
   71           Bre86(yr,j>5»area6(yr,j)/1000.
   72           area7(yr,j}=area7(yr,j>/1000.
   73           area8(yr,j}=area8(yr,J)/1000.
   74           area8p(yr,j)*area8p(yr,j)/1000,
   75 c
   76           if (option .eq. 1) 50 to 88931
   77           if ((swban(yr.j)  .eq. 1) .or.  exmpt(idp(j)3)  go to 88931
   78           a1t+area5(yr,j)+area7(yr,j)
   79           a3t(yr)=a3t(yr}+area6(yr,j)+area8(yr,j)
   80 c

-------
ASBQUT.FQR                    Tuesday May 31,  1988  1Z:00 AH                        Page 2


   81 88931   continue
   82           area1(yr)=area1(yr)/10QO.
   83           area2s'<2x,a25,1x,f13.2,1x»f12.2,1x»f12.2,1x,f12.2)'
   97       fmt<4)='(8x,14,2x,f12.3,5x,f12,3,4x,f12.3,4x,f12.3)'
   98       fflit<5>='C1§x,i2»B2,a30,f12.2>'
   99       fmt(12)*''
  100       fnrtC14)*'<2x,a25,15x,f12.2,1x,f12.2,1x,f12.2)'
  101       fmt(15)='
  108       if {iday ,ps.  10)  then
  109         write (dstr,'(2(i2,1h/>,i4)') imon,iday,iyr
  110       else
  111         write (dstr,'(i2,2h/0,i1,1h/,i4)') imon,iday,iyr
  112       endif
  113       if (imin .ge.  10)  then
  114         write (tstr,'U2,1h;,i2)') ihr,imin
  T15       else
  116         write (tstr,»{i*2,2h:0,i1)')  Ihr.iniin
  117       endif
  118 c
  119       call  pcsa (12,36,'  completed 'c,vrev)
  120       call pcsa (15,23,'  Writing  output... 'c,vrev)
  121       call setcur (vy,vx-1)
  122 c
  123       open  (3,fite*fname(3j)
  124       open  (6,filesfnameC65,fontF'unfonnatted')
  125       if (fnaroe(3)  .eq.  UptT) write (3,'(a)') pgbrk
  126       ipage*0
  127       call header (0)
  128       write  {3,»(//7x,a19,1x,a/)') 'Regulation Ration s',opt
  129       write  (3,'(7x,a19,1x,i4/>'5 'Beiiming Year    :<,buseyr
  130       write  (3,'(7x,a19,1x,i4/)') 'Ending Tear       :',erxiyr
  131       write  (3,*{7x,a19,1x,a/)')  'Baseline Growth   :',bopt
  132       write  (3,'{7x,a19,1x,10(f4.1,a,2x)//)') 'Discount Rate(s)   ;',
  133      -CdiscrtC i)*100.,'%',i=1,nodrt)
  134       fsup*fsup*10Q.
  135       dsup=dsup*100.
  136       write  <3,'(/7x,a,f7.2/}')   'Elasticity of fiber supply  ',setast
  137       write  <3,'(7x,a,f6.1,a/5')  'Foreign fiber supply        ',fsup,'%'
  138       write  <3,'(7x,a,f6.1,a/>')  'Domestic fiber supply       ',dsup,'%'
  139       iline=19
  140       fastrl*',^	    	'
  141       if (option ,eq,  3)  go to 200
  142       write  (3f'(//7x,a/)')  'PRODUCT BAN  SCHEDULE'
  143       bstr2*'     Year  of  Ban         TSCA Product Nos.'
  144       write  C3,'(15x,a//,15x,a/,15x,a/)') bstr1,bstr2,bstr1
  145       iline=iline+7
 J46 c
  147       do 10  n=1,byrs
  148         jf  (ibchk .eq. 99) po to  103
  149         if  (ibchk .eq. byear(1)-baseyr+1) then
  150          write {bans1,'<22x,i4,13x,a\)') byear(n),'AU Products  '
  151          go to 105
  152         etseff  (ibchk  .eq. byear{n)-baseyr+1) then
  153          write {bans1,'(22x,i4,13x,a>')  byear(n),
  154      •                                  'All Remaining Products '
  155          go to 105
  156         endif
  157 c
  158 103      write {bans1,'(22x,543'>  byear(n)
  159         ix=byear(n)-baseyr+1
  160         ic=0 '

-------
ASBOUT.FOR                    Tuesday Hay 31, 1988  12:00 W                        Page 3
161
162 c
163
164
165
166
167
168
169
170
171
172
173
174
175

177
178 1011
179

181 101
182

184
185 10
186 c
187
188 c
189 105
190
191
192
193
194
195
196
197
198
199
200
201
202
203
204 1051
205
206
Z07 c
208 102
209
210 c
211 c
212 200
213
214
215
216
217
218 c
219
220
221
222
223
224
225
.226
227
228
229 c
230 203
231
232
233
234 c
•235
236
237
238
239
240
flag1=0

do 101 nn=1,ip
if C(isban(ix,nn) .eq. 1) .and. (.not. exmpt(m)}) then
tempi =bans1
If (flagl .eq. 0) then
write Ctenp,'(i2>'} m
bans1=tenpU1 :39)//tewp
ftasW
else
write (tenp,' bansl
ilinesiline+1
write (bar»2,'{40x,a)'> 'except'
ic=0
do 1051 i=1,ip
temp2=bans2
if (exmptti)) then
if (ic .eq. 0) then
write  ' ' ,i
else
write (temp, '(a, i2}'} ',',!
endif
b6ns2»teap2C 1 : 46+i c*3)//temp
ic=ic+1
endif
continue
if Cic .gt. 0} write <3,'(a)') »»ns2
Hine=iline*1

write (3,'(15x,a//)') bstr!
iline=itine+3


if (.not.Cenf)} go to 703
If Ciline .gt. 50) call header {0}
write <3,'(//7x»a/)') 'ENGINEERING CONTROLS SCHEDULE'
bstr2=' Year of Control TSCA Product Nos.'
write (3,'C15x,8//,15x,a/,15x,a/)') bstr1,bstr2,bstr1
iline=f line+7

do 70 n=1,ienyrs
if Cienchk .eq. 99) so to 203
if (ienehk .eq. enyr(1)-baseyr+1> then
write (bansl, '(22x,i4r13x,s\)'} enyr(n),'AU Products '
go to 702
elseif (ienehk .eq. enyr(n)-baseyr+1) then
write (bansl, '(22x, 14, 13x,a)') enyr{n3,
'All Remaining Products '
go to 702
endif

write (bans1,'(22x, 14)') enyr(n)
i x=enyr( n}- baseyr+1
ic=0
fl8i1=0

do 701 r»»1,tp
if  .nn
bansl "tempi ( 1 :39>//temp

-------
ASBOUT.FOR                    Tuesday May 31, 1988  12:00 AM                        Page 4
341
242
243
244
245
246
247 c
248
249
250
251 7011
252 c
253
254 701
255 c
256
257
258 70
259 c
260
261 c
262 702
263
264 7021
265
266 c
267 703
268
269
270
271
272
273
274 c
275
276
277
278
279
280
281
282
283
284
285 c
286 503
287
288
289
290 c
291
292
293
294
295
296
297
298
299
300
301
302
303 c
304
305
306
307 901 1
308

310 901
311

313
314 90
315 c
316
317 c
318 902
319
320 9021
flag1=1
else
write (temp, '{a,i2\)'> ',',nn
bansl«tenp1(1:41+ic*3)//tetnp
ic=ic+1
endif

enctl{0,nn>=.true.
do 7011 m=ix,ie
enct Km, nn}=. false.
continue

endif
continue

write (3, '(a)') bansl
i line*! line+1
continue

go to 7021

write C3,'(a)'5 bansl
Hine=Hine*1
write (3,'<15x,a//>'> bstrl
iline*»line*3

if (,not.(lbf» go to 903
if ((option .ne. 3) .and. enf> call header (0)
if Ciline .gt. 50> call header (0)



























write <3,' 'PRODUCT LABELING SCHEDULE'
bstr2*' Year of Labeling TSCA Product Nos,
write (3,'C15x,a//,15x,8/,15x,a/>') bstrl, bstrZ,
H5ne=iline+7

do 90 n»1,Hyrs
if (ilchk .eq. 99) go to 503
if (ilchk .eq. lyr(1}-baseyr+1) then
writ* (bansV(22x»i4,13x,a\)'> lyr(n),'All
So to 902
elseif (ilchk .eq. lyr(n)-baseyr+1> then
write (bans1,'C22x,i4,13x,a)') lyrtn},
'All Remaining
go to 902
endif

write (bans1,'{22x,i4)'} lyrCn)
ixs=lyr-baseyr+1
ic=0
flag1=0

do 901 nn=1,ip
if ( label (ix,rm)> then
tempi -bansl
if (flagt .eq. 0> then
write (terap,'(i2}'} nn
faans1-terap1 { 1 :39>//temp
flag1=1
else
write (tenp,'(a,i2\)'> ',',nn
bans1=tenpU1 ;41+ic*3j//tenv
ic*ie+1
endif

label(0,nn)=.true.
do 9011 m=ix, ie
label (m,nn}s. false.
continue

309 endif
continue

312 write (3,'(a)'> bansl
iline=i line+1
continue

go to 9021

write (3, '(a)') bansl
5line=n line+1
write (3, '(15x,a//)') bstrl
/
bstrl





Products



Products






































-------
ASBOUT.FOR                    Tuesday May 31,  1988  12:00 AH                       Page 5


  321       iline=iline+3
  322 c
  323 903   write (3,'{5(/),7x,a>'> 'PRODUCT EXEMPTIONS'
  324       icaQ
  325       do 21 1=1,ip
  326         tempi=bans1
  327         if (exnpt(i» then
  328           if (ic .eq. 0) then
  329             write (terap,'(i2)') i
  330             bans1='  '//temp(1:2>
  331           else
  332             write (tesp,'(a,i2}'>  ', ',i
  333             bans1=teap1<1nc*4}//tewp(1:4)
  334           endif
  335           1c«fc*1
  336         endif
  337 21    continue
  338       if Cic .gt. 0) then
  339         write (3,'{/1Qx,a/)') 'The following products have  been  '//
  340      -                        'exenpted from regulation:'
  341         write (3,'(15x,a)'> bansl
  342       else
  343         write (3,'(/10x,a/)'> 'No  products  have been exempted  '//
  344      -                        'from refutation'
  345       endif
  346 c
  347 c
  348       if (option .eq. 1) go to 300
  349       if (iline .gt. 42) call header (0)
  350       pstr1='            Party                      Tomage'
  351       write (3,'(//7x,a/)') 'FIBER PERMIT ALLOCATION (by tonnage)'
  352       write (3,'(15xfa//,15x,a/,15x,a/5'> bstr1,pstr1,bstr1
  353       iline-illne+7
  354       atoc=0
  355       ipid*0
  356       if Cpflas<10> .eq. 1) then
  357         write {3,'(15x,2a,7x,e>'}  »1.  ',perm(10}f'ALl'
  358         go to 47
  359       endif
  360       do 45 i=1,9
  361         if (pflag(i) .eq. 0) then
  362           paloc(i)*0
  363           go to 45
  364         endif
  365         ipidsipid+1
  366         write (3»fint(§)> ipid,'. ', perni(i)fpaloc
  367         aloc=aloc+paloc(i)
  368         HfneMline+l
  369 45    continue
  370       write <3,'(/19x,a29,1x,f12.2)'5  perra(11),aloc
  371 47    write (3,'<15x,a//>'> bstrl
  372       iline=iline*4
  373       if (iline .gt. 25) call header (0)
  374 c
  375       write (3,'{//?x,a/}'> 'FIBER CAP SCHEDULE'
  376       fstr1='      Year                Fiber Cap (tons)'
  377       write (3,'(/10x,a/10x,8/tOx,a//)'3  'The fiber cap schedule '//
  378      -      'shown below is the effective cap '.'schedule,  i.e., '//
  379   •   -      'it does not include fiber demanded by1,'exempted  markets.'
  380       write (3,'(15x,a//,15x,a/,15x,a/)'} bstrl,fstrl,bstrl
  381       if (cendyr .eq. endyr) then
  382         ix=endyr
  383       else
  384         ix=cendyr-1
  385       endif
 -386       do 20 i=baseyr+1,ix
  387         cap=qc8p{i-baseyr+1)
  388         write  (3,'(20x,i4,19x,f10.2>') i,cap
  389 20    continue
  390 c
  391       if (cendyr .ne. endyr) then
  392         write  (3,'(20x»i4,e,i4,14x,f10.2)') cendyr,'-',endyr,endant
  393       endif
  394       write (3,'{15x,a)') bstrl
  395       if (.not.(capr)} go to 300
  396       write (3,'(5(/3,5x,2a/,5x,2a))'3 'Mote: Fiber cap schedule ',
  397      -'revised during model run to','       ensure that  cap  Ss  ',
  398      -'binding in all years.'
  399 c
  400 300   call header (1}

-------
ASBOUT.FOR                    Tuesday Hay 31,  1988  12:00 Ml                       Page 6
401
402
403
404
405
406
407
408 3001
409
410 c
411
412
413
414
415 c
416
417
418
419
420
421
422
423 c
424
425
426
427
428
429
430
431 c
432
433-
434 c
435 310
436 c
437 c
438
439
440
441
442
443
444
445
446
447
448
449 c
450
451
452
453
454
455
456 c
457
458 c
459
460
461
462
463
464
465
-466 c
467
468 c
469
470
471
472
473
474
475
476
477 c
478 301
479 c
480
write <3,'{t20,a)'} 'DESCRIPTION OF PRODUCT CATEGORIES'
if (pgfork .eq. '1') write (3,' write (3,'(15x,i2,27x,a>'> idp(t>,desc(i>
continue
write a,'C5x,B/)'} us1

do 310 j*1,np
banm(j)=' '
jf (exmpt(idp(j>» ban»(j>s'X'
if  .eq. ' ') then
tempi*' I'
else
teinp1=', 1'
endif
endif

If  then
if CbanrtCjM1:1> .eq. ' '} then
terap2»' L>
else
terap2=',L'
endif
endif

temp=banm(j)
barm(j>«' '//terBp(1:1)//tenpK1:2>//teinp2(1j2)

continue


write {6} nodrt
do 346 f*1, nodrt
dcsl*0
dpsUO
fcsl=0
fpsl-0
do 30 j*1,np
dcons{j}=0
dpros(j)=0
feons{j)=0
fprosCj)=0

do 301 yr=2,ie
area5d=area5(yr,j}/(1+dSsert**(yr-1)
area6d=8rea6(yr»j)/{1+discrt{i))**(yr-1)
ar8a7d=8rea7(yr,j)/{1+discrt(i}}**(yr-1}
area8d=area8(yr » J >/( 1+di scrt < i } )**(yr- 1 >
ar8pd=area8p(yr,j)/(1+discrt(i}}**(yr-1}

cons=a rea5d*e rea6d

if ((option .eq. 1) .and. (eprat(j) .It. 1) .and.
(areaSd .It. 0)} then
dcons{ j )=dcons{ j )+cons*cprat{ j }
f cons{ j )=f cons{ j )+cons* ( 1 -cprat ( j ) )
else
deons( j )ssdcons( j )+cons
.endif

pros*area7d*area8d*ar8pd

if ((cf>rat(j> .eq. 1) .and. inpinf(j)) then
f pros( j >*f pros( j }+pros
elseif (cprat(j) .gt. 15 then
dpros( j }«dpros( j 5+pros/cprat ( j )
f pros( j }=f pros( j }+pros*( 1 • 1/epratC j ) >
else
dpros( j )=dpros( j }+pros
endif

cont 1 nue

des I =dcs I +deons ( j )

-------
ASBOUT.FOR                    Tuesday May 31,  1988  12:00 AM                        Page 7
481
482
483
484 30
485 c
486
487
488
489
490
491
492 c
493
494
495
496
497 c
498
499
500
501 40
502 c
503
504 c
505
506
507
508 c
509
510
511
512
513
514
515
516
517
518
519
520
521
522
523
524
525
526
527
528
529
530
531
532
533
534
535
536
537
538
539
540
541
542
543
544
545
.546
547
548
549
550 c
551 555
552
553
554
555
556 c
557
558-
559 c
560 575
dps I s»dps l+dpros( j )
fcsl=fcsl+fcons(j)
fpsl*fpsl+fpros(j)
continue

fmcs=dcsl+fcsl+dpsl+fpsl
fmdcsssdcsl+dpsl
frapssO
fmdpssQ
pval-0
do 40 yr*2,ie

area1d«area1(yr)/<1+disert(i}>**(yr-13
area3d=area3«dSsert(i 3*100.
call tabagg (1,discrt( i ),fmcs, fmps.pval)
call tabagg (2,discrt(i3,f«dcs,fffldps,pvat)

write (3, '(a)' 3 pgbrk
ipage=ipege+1
write (3,'(t64,2a3'3 'Date: ',dstr
write (3,'(t64,2a3'3 'Time! «,tstr
write (3,'(t64,a,i2/3'> 'Page: 'ripage
write (3,'
-------
ASEOUT.FOR
                              Tuesday May 31, 1988  12:00 AM
                                                                        Page 8
  561
  562
  563
  564
  565
  566
  567
  568
  569
  570
  571
  572
  573
  574
  575
  576
  577
  578
  579
  580 c
  581
  582 c
  583 346
  584
  585 c
  586 c
  187 c
  588 c
  589 c
  590 c~~
  591 c
  592
  593
  594
  595
  596
  597
  598
  599
  600
  601
  602
  603
  604
  605
  606
  607
  608
  609
  610
  611 59
  612
  613
  614
  615
  616
  617
  618
  619
  620
  621
  622
  623 c
  624
  625 c
 .626
  627
  628
  629
  630
  631 c
  632 600
  633 c
  634
  635
  636
  637 c
  638
  639
  if (pflag(IO) .eq. 1} then
    write (3,fmt(15» perra(105,pv8l»pval
    v(1Q)=pval
    r(10)sspval
    USW=LIS w+pva L
  else
    write (3,fmt(f5)} perm(10},zero.zero
    p(10)=0
  endif
  write (3,'(2x,a/>'> pO
  write (3,'(4{/>,t30,a>') '(JET WELFARE LOSSES'
  if (pgbrk .eq. 'V> write (S,'(a,t3Q,e}'>'+',
  write (3,'(//20x,a,fl6.2/F>'Li. S. Welfare: ',usw
  write (3f'(20x,a,f16.2//>') 'World Welfare: ',ww
  write (3,'(///10x,8)'} 'Note: Negative entries are welfare '//
                         'gains.'

  write (6> discrt(iMesl(j>,psl(,D,v(jJ,r-(J>»j*1,tG),usw,ww

continue
if (eresf .eq. 05 go to 600
             this section writes the consistency check
write (3,'(a)'} pgbrk
ipag,e=ipage+1
write (3,'(t64,2a)') 'Date: ',dstr
write (3,'(t64,2a)') 'Time: ',tstr
write (3,'(t64,a,i2/)') 'Page: ',ipage
write (3,'(t26,a)O '   MODEL CONSISTENCY CHECK'
if (psbrk .eq. '1') write (3,'(a,t26,a)') '+',

write (3,*)
                               Sum of                         '//

                             AREAS 5 & 7        AREA 3    *   '//

                           over output mkts.   (Fiber Mkt.) '//
    '  Sum of
cs2='tear      AREA 1
    'AREAS 6 & 8'
es3='       (Fiber Kkt.>
    'over output n*ts.'
write <3,'{//7x,a//,3(8x,a/},7x,a//)'> us1,cs1,cs2,cs3,us1
do 59 yra2,ie
  iyr=yr*baseyr-1
  write (3,fmt(4)} iyr,areaKyr),8lt{yr),area3(yr},83t the consistency check is due to  '//
       engineering'
y(155*          controls and/or labeling requirements.'

write (3,'(/3(10x,a/»'> y(9)»y(12},y(13)

if (enf .or. Ibf) then
  write (3,'(2(10x,a/}>'> y(14},y(15)
else
  write (3,'C10x,a>'> y{10)
endif

if (dprf .eq. 1) call detout (ie)

if (fname(3) .eq. 'Ipt1'> write (3,'(a>') pgbrk
endfile 3
close (3>

return
end

-------
BANCSOR.FOR                   Tuesday May 31,  1988  12:00 AH                       Page
    1 c                 	
    2 c	
    3 c
    4 c     ARGN :  CALCULATION OF CS AND OR LOSSES FOR BANNED PRODUCTS
    5 c
    6 c     Version 6.31 :  Hay 31, 1988.
    7 c
    8 e     Program written fay:
    9 c
   10 c        Vikram Widge,  ICF Incorporated,  9300 Lee »ny., VA 22031-1207
   11 c        (703) 934-3000
   12 c
   13 c	
   14 c                       '	~~	
   1i c
   16 $large
   17 c
   18 c	
   19 c                                                              "	
   20 c      This subroutine calculates the CS  and QR  losses in banned markets.
   21 c		
   22 c	
   23 c
   24       subroutine bancsqr
   25 c
   26 $include:'vars.cnn'
   27 c
   28 c
   29       do 80 i«1,np
   30         if {snban{yr,i) ,eq. 0) go to 80
   31         do 801 j=1,nsubCi>
   32           area6(yr,i}=area6{yr,i)+(ps(yr,i,j)-epp(yr,i}>*qs(yr,i,j}
   33           if  (swqr{i} .ne. 1} go to 801
   34           if  (lnsub(i,j» then
   35            areeSpCyr,i}=area8p(yr,i)+{epp{yr,i)-avc(i}}*qs(yr,i,j >/
   36      -                   fdiscrt
   37             lnsub(t,j>=.false.
   38           endif
   39 801      continue
   40         swqr
-------
86NOUT.FOR                    Tuesday Hay 31, 1988  12:00 AH                        Pagt 1
    1 c	
    2 c—	_
    3 e
    4 c     ARCH ;  BENEFIT  MODEL  INTERFACE ROUTINE
    5 c
    6 c     Version 6,31  ;  Hey 31,  1988,
    7 c
    8 c     Program written by:
    9 c
   10 e        Vikram Widge,  ICF  Incorporated, 9300 Lee Hwy., VA 22031-1207
   11 c        (703) 934-3000
   12 c
   13 c	
   14 c	'	'
   15 c
   16 $large
   17 C
   18 c	
   19 c         '          !	
   20 e     This subroutine writes  the index files for yse in the Benefits  Model
   21 c			
   22 c—	'"		
   23 c
   24       subroutine benout
   25 c
   26 $incLude:'vars.om'
   27 c
   28 c
   29       real        bi(2:nylip*1},ai(2sny,ip+1}
   30 e
   31       integer     ina(;p)
   32 c
   33 c
   34       open (8,file=fname{8}>
   35       open (9,file=fn»e(9»
   36 c
   37       write <8,'«) ie-1,baseyr,endyr
   39 c
   40       do  10 ib»1,1p
   41        ira{ib)=0
   42        do 101  ia=2,ny
   43           bi{ia,ib>*0
   44           ai(ia,ib)=0
   45 101     continue
   46 10    continue
   47 e
   48       do  5 i*1,np
   49        if (na(i) .It.  1.5 then
   50           ina(idp(i»=1
   51         else
   52           ina(idp{i5)=naUH0.5
   53        endif
   54 5     continue
   55       write (8,'(37i3,a)'} ina,'  1'
   56 c
   57       do  20 ia=2,ie
   58        do 201  ib=1,np
   59 c
   60           bi(ia,idpCib))=bepq(ia,ib5/bbpq(ib}
   61  c
   62           if  (swban(ie,ib) .eq. 1} 90 to 201
   63           if  (option  .eq. 1) then
   64            ai(ia,idp{ib»=bi(iafidp
   67      -        go  to 201
   68            ai(ia,idpCib»=fpqCia,ib>/fabpq(!b>
   69          •endif
   70 c
   71  201     continue
   72 c
   73        bi{ia,ip+1)»bfqe{ia)/bbfq
   74  c
   75         if {option .eq. 1) then
   76           af(ia,ip*1}=fqe
-------
iENOUT.FOR                    Tuesday Hay 31,  1988  12:00 AM                       Page 2


   81         write <8,<<38(f4.2,1x»'> (bi(i8,ib),1bsl,iprt-1>
   82         write C9,'(38(f4.2,1x))') {ai(ia,ib),ib=1,ip»-n
   83 c
   84 20    continue
   85 c
   86       ervdf \ is 8
   8?       endfite 9
   88 c
   89       close <8)
   90       close {9}
   91 c
   92       return
   93       end

-------
DETOUT.FOR                    Tuesday Hay 31, 1988  12:00 W                       Page 1
    1 c			
    2 c	_________	_	

    3 c
    4 c     ARCH : DETAILED OUTPUT SUBROUTINE
    5 c                                         :'
    6 c     Version 6.31 : May 31, 1988.
    7 c
    8 c     Program written by:
    9 c
   10 c        Vikram Widge, !CF Incorporated,  9300 Lee  Hwy., VA 22031-1207
   11 c        (7035 934-3000
   12 c
   13 c 	
   14 c                                    "	
   15 c
   16 $large
   17 c
   18 c	
   19 c           !	~~	T
   20 c        .   This subroutine writes the detailed output if requested
   21 c             	
   22 c	'	:	
   23 c
   24       subroutine detour
   25 c
   26 Sinctudes'vars.cmn'
   27 c
   28 c
   29       character   banr»*6,begn(2}*11,nf*20
   30       charecter*8Q ffmt(4)
   31  c
   32       yd>='             Baseline      Baseline      Scenario        ')
   33      -     'Scenario'
   34       y(2>='   Year       Price        Quantity       Price          ')
   35      -     'Ouantity'
   36       fB)t(6>='d2x,i4,1x,f13.2,1xtf13.2,a12,10x,a6)'
   37       fBitC7>s'{12x,i4,1x,f13.2,1x,f13.2,1x,f13.2,1x,f15.2}'
   38       fiat(10)«'d2x,i4f1x,f13.2,1x,f13.2,10x,a3,2x,f15.2)'
   39       fmtd1)='d2x,i4,1x,f13.2,1x,f13.2,8x,a6,10x,a6>»
   40       fmtd2>a'd2x,i4,10x,a3,2x,f13.2,10x,a3,2x,f1S.2>'
   41        fmt(13)>='d2x,i4,1x,f13.2,1x,f13.2f10x/a3,1x,f16.2)'
   42       ffmtd>-'(9x,i4,1x,f10.2f1x,f12.2,6x,a3,9x,a3,14x,a3>'
   43       ffmt{2>*'(9x,i4,1x»f10.2,1x,f12.2,1x,f10.2,8x,a3,4x,f14.2)'
   44       ffBttC3>*'t9x,i4,1x,f10.2,1x»f12.2,1x,f10.2,2x,f1Q.2,3x,f14.2>'
   45        ffmt(4>='<9x,i4,1x,f10.2,1x,f12.2,7x,e3,9x,a3,4x,f14.2)'
   46       ifp*0
   47       do 70  i*1,np*1                                            f
   48         write  (3,'(a)')  pgbrk
   49         ipage=ipage+1
   50          write  (3,'(t64,2a)'> 'Date:  ',dstr
   51          write  (3,'Ct64,2a)') 'Time:  ',tstr
   52          write  C3,'{t64,a,i2/)')  'Page:  ',ipage
   53          write  (3,'(//t28,a)'>  'PRICES AMD QUANTITIES BY MARKET'
   54          if (pgbrk  .eq.  '1') write  {3,'{aft28,a)') '+',
   55       -                     '	_^_	'
   56          write  <3,'  then
   58           y<1)='                                  Scenario    Scenario'
   59           y{2>='        Baseline     Baseline      Supply     '//
   60       -         ' Demand        Scenario'
   61           y<3>=' Year     Price      Quantity      Price       '//
   62       -         'Price        Quantity'
   63  c
   64           write  {3,'{t33,2a>'5 'Market: ','Asbestos Fiber*
   65           write  <3,''> ys1,Cy(k>,k=1,3),us1
   66    •      else
   67           write  (3,'{t28,a,I2,2a}')  'Market: ',idp(i),'.  ',dese
   68           if (exmpt(5dp(i») write (3,'
   6°       -                      'This market is EXEMPTED from regulation'
   70           write  (3,'(/7x,a//,2(8x,a/),7x,a/)'} us1,y(1),yC2},us1
   71          endif
   72  c
   73          if {i  .eq. np+1)  then
   74           write  (3,ffmt{15) baseyr,fpe(1),fqe(1),'  -','  -','  -'
   75          else
   76           write  (3,fnrt(6)3 baseyr,epp(1,i),epq{1,i),'-','    -'
   77          endif
   78  c
   79          do 701 yr=2,ie
   80           iyrsbaseyr+yr-1

-------
DETQUT.FOR                    Tuesday May 31,  1988   12:00 AM                        Page 2


   81           if {i  .eq.  (np+1»  then
   82             if  (fqe(yr>  .eq.  0) then
   83               ifp=1
   84               if {(option .eq.  1) .or.  (qeapm(yr)  .eq. 0» then
   85                 write {3,ffmt(4» iyr,bfpe(yr>,bfqe(yr),'+++
   86      -                            fqe(yr)
   87               else
   88                 write (3,ffiut(2)> iyr,bfpeCyr>,bfqe(yr),pf1(yr5,'w,
   89      -                            qeapmCyr)
   90               endif
   91             eiseif {option .eq. 1) then
   92               write  <3»ffmt{2» iyf-,bfpeCyr),bfqe(yr),fpe{yr>,' - ',
   93      -                          fqe(yr)
   94             eiseif  iyr,bfpe(yr),bfqe{yr),'+++»,'+++',
   98      -                            qeap(yr)
   99              else
  100                 write (3,ffmt(2)> iyr,bfpe(yr},bfqe(yrJ,pf1{yr>,'*-H-'>
  101      -                            qcapm(yr>
  102              endif
  103             else
  104              write  (3,ffint(3» »yr,bfpe{yr},bfqe(yr),pf1(yr>,pf(yr>,
  105      -                          qcapm(yr)
  106             endif
  107           endif
  108 c
  109           if {i  .te.  np>  then
  110             if  (bepq{yr,i)  .eq.  0.) then
  111              Nrite  (3,f«nt{123) iyr,'n/a',bepq(yrti),'n/a',bepq(yr,i>
  112             etseif   .eq.  0) .or. {(t}c*p(yr> .eq. 0} .and.
  117      -            (.not.  exnpt(idp
  127             endif
  128           endif
  129 701     continue
  130 c
  131        write C3,'(?x,a,4'}  'Note : "***" indicates either  ',
  141      -                              'scenario price is greater than'
  142           write  {3,'(7x,2a}'} '       maximum substitute price or ',
  143      -                        'fiber cap is zero.'
  144        endif
  145 c
  146 69      if ((qcapm(yr) .eq. 0)  .end. (i  .eq. (np+1») then
  147           if  (option  .eq. 1) then
  148            begn{1)='ttote : '
  149            begn(2)s»       •
  150            nf='(7x,a7,a}'
  151           else
  152             begnd)*'       3.  '
  153             begn{2)*'           '
  154             nf='(7x,a10,a}'
  155           endif
  156           write  (3,nf> begnd),  '"+++" indicates either '//
  157      -                 'all markets have been banned or'
  158           write  (3,nf3 begn(2),'  fiber cap is zero and '//
  159      -                 'price is no longer meaningful.'
  160        endif

-------
DETOUT.FOR                    Tuesday May 31»  1988  12:00 AH                        Page 3


  161 c
  162 70    continue
  163       y(3}=' Market       Area 5        Area 6         Area 7        '//
  164      -     '  Area 8'
  165       y(4)='(TSCA #)'
  166       y(5)='Note: 1. Areas 1-4 in the fiber market ere listed under '//
  167      -     'Areas 5-8.'
  168       y(6)='      2. Areas 6 & 8 include consumer and producer *//
  169      -     'surplus losses for'
  170       y{7)»'         all banned, exempted,  and non-banned markets.  '//
  171      -     'Hence, this is a'
  172       y(8>='         complete accounting of all welfare effects.'//
  173      -     '  The model'
  174       y(11}s'         consistency check, however, is defined in terms'//
  175      -      'of non-banned'
  176       y{15}='         and non-exempted product markets and the fiber '//
  177      •      'market.  There-'
  178       y{16)*'         fore, to perform this check using the '//
  179      -      'figures in this table,'
  180       y{17)ss'         the welfare effects !n the banned and '//
  181      -      'exempted markets should'
  182       y(18>='         be excluded.   Refer to user"s guide for '//
  183      -      'further explanation.'
  184 c
  185       fflite8)='<13x,i2,1x,f15.3,1x,f14.3,1x,f14.3,1x»f14.3>'
  186       fmt<9>*' 'Time;  ',tstr
  194         write <3,'(t64,a,i2/)'> 'Page: 'fipage
  195         write (3,'(t30,a,i4>'> 'AREAS 1-8 FOR »,iyr
  196         if Cpflbrk ,eq. '1')write(3,'(a,t30,a}'} '+','	__'
  197         write <3,'(/t29,a/)'J '(Ondiscounted Values)'"""~~"
  198         write (3,'(7x,a//,2(10x,a/),7x,a/}'> us1,yC3),y(4)rus1
  199         do 801  i=1,np*1
  200           if (i  .eq. (np+133 then
  201             write (3,fmt{9» 'Fiber',area1Cyr>,area2Cyr),area3 then
  205               pros=area8(yrr i}+8rea8p(yr,i)
  206               write (3,fmt(8» Wp(i),area5(yr,O,8rea6(yr,<),
  207      -                         area7(yr,fJ.pros
  208           endif
  209 801      continue
  210 c
  211         write (3,'(7x,a/)'3 us1
  212         write <3,'{7x,a//,8{7x,a/»'>  (y(k>,lc=5,8),y<11)rrk=15,18)
  213 80    continue
  214 c
  215       return
  216       end

-------
EULBL.FOR                     Tuesday May 31, 1988  12sOQ AH                        Page 1


    1 c	
    2 c                       ——-—              —             —	

    3 c
    4 c     ARCH : ENGINEERING CONTROL' AND LABELIMB COSTS CHECK
    5 c
    6 c     Version 6.31 s May 31, 1988.
    7 c
    8 c '    Program written by:
    9 c
   10 c        Vikram Widge, ICf Incorporated, 9300 Lee Hwy.,  VA 22031-1207
   11 c        (703) 934-3000
   12 c
   13 c	
   14 c
   15 e
   16 $inctude:'stdsub'
   17 $lar§e
   18 c
   19 c	
   20 c"''
   21 e      This subroutine checks to see if the costs of engg. control  and/or
   22 c      labeling added to the baseline price exceed the 1st step of  the
   23 c      product's demand function.
   24 e_	
   25 c                         '	
   26 c
   27       subroutine enlbl
   28 c
   29 $include;'stdvar'
   30 Sincludes'vers.etin'
   31 c
   32 c
   33       character   nyc*4
   34 c
   35 c
   36       istop=Q
   37       n=0
   38 c
   39       do 10 ia1,np
   40         tempsO
   41         if (enctl(yr,idp(i}» temp»te»p+ecost(i>
   42         if (label{yr,idp(i)» t«np=tenf»-lGostCi>
   43         if  then
   53             call eeop (4,0)
   54             write (nyc,'
   59             call setcur (12,0)
   60           endif
   61 c
   62           if (swqrCi) .eq. 1) then
   63             tempsavc(i)
   64           else
   65             t«np=bepp(yr,i)
   66           endif
   67 c
   68           if (n .gt. 10) then
   69             call pcsa (22,12,' Hore to come... ',vrev3
   70             call pcsa (23,12,' Press any key to continue',vbold)
   71             ipse»key geteC)
   72             call eeop (10,0)
   73             call setcur (12,0)
   74           endif
   75 c
   76           urite (*,30) 'Product ',idp(i),SHqr(i),temp,ecost{i},lcost(i),
   77      -                 ps(yr,i,nsub(i»
   78 30        format (t12,a,i2,t25,i2,5x,4f10.2)
   79           istop=1
   80   •      endif   '

-------
ENLBL.FOR                     Tuesday Hay 31,  1988  12:00 AH                        Page 2


   81 c
   82 10    continue
   83 c
   84       if Cistop .eq.  1} then
   85         call  setcur (20,0)
   86         stop
   8?       endif
   88 c
   89       return
   90       end

-------
EQPQ.FOR                      Tuesday Hay 31,  1988  12:00 AM                        Page 1
    1 c              	
    2 c—	_________	

    3 c
    4 C     ARCH : E8U1LIBRIUH PRODUCT PRICES AND QUANTITIES
    5 c
    6 c     Version 6.31 : Hay 31,  1988.
    7 c
    8 e     Program written by:
    9 c
   10 c        Vikram Widge, ICF Incorporated,  9300 Lee Hwy.,  VA 22031-1207
   11 c        (703 > 934-3000
   12 c
   13 c,		-
   14 c                                     '	
   15 c
   16 $large
   17 c
   18 c		.	
   19 c	:	—	
   20 c               this subroutine calculates  the equilibrium price
   21 c                   £ quantity in the asbestos fiber market.
   22 c	
   23 c		        "'	
   24 c
   25       subroutine eqpq
   26 c
   27 $inelude:'vars.onn'
   28 c
29
30 c
31 c
32
33
34
35
36
37
38
39
40
41
42
43
44
45 9!
46
47
48
49
50
51
52
53
54
55 90
56
57
58
59
60 c
61 c
62 c
63 c
64 c
65 c
66 c
67 c
68
69
70
71
72
73
74
75
76
77
78
79
80
Integer swpe


swpe=0
qerat=1.0
do 90 i=1,nstd
f pe(yr)=slope*tfqs( i 5+rint
if ((fpe(yr) .eq. tfps(i»







.or.
(fpe(yr) .oe. tfps
Ci+2») then



.and.


fqe(yr>=(fpe(yr5-rint)/slope
if (i .eq. 1) then
qerat*=f qe(yr >/tf qs 1 1 )
else


qerat=(fqe{yr}-tfqsCi-1»/{tfqs(i>-tfqs{i-1))
endif
end if
cont i nue
if (nstd .eq. 0) then
fpe{yr)=0
fqe{yr>«0
endff













This section translates fiber equilibrium price (fpe) to
product market equilibrium price (epp> and quantity {epqK



do 150 i=1,np
ff (fps(i,1) .It. fpe(yr»
qfe(yr,i)=0
go to 151
else
do 1501 JBl,nsub(i>




then



if Cfps .51. fpe(yr>5 then
if (j .eq. nsub(i» then
qfe{yr,i>*fqs{yr,i,
go to 151
else
go to 1501
endif
j)





-------
EQPQ.FOR
                              Tuesday Hay 31, 1988  12:00 W
Page 2
   81             elseif (fps(i,j) .tt. fpe(yr)) then
   82               qfe{yr,i)=fqs(yr,i,j-1>
   83             else
   84               if {j ,eq.- 1) then
   85                 qfe(yr,f)=fqs{yr,i,1)*qerat
   86               else
   87                 cjf e(yr, i }={fqs(yr, i, j )-fcjs(yr, i, j-1 ))*qerat+
   88      -                     fqs{yr,i,j-1)
   89               ersdif
   90               go to 151
   91             endif
   92 1501      continue
   93         endif
   94 151     epqsqfe(yr,O/ant(i}
   95         epdif=fpeCyr}-afpe
   96         epp(yr,i3=epdif*BMt(i>+aepp(i)
   97         ff ((swqr(i) .eq.  1) .and. (epq{yr,i) .nc. 0)) then
   98           avc(i)=epp(yr,i)-qrarea{i)/epq(yr,t}
   99         cndif
  100 150   continue
  101       return
  102       end

-------
EXEMPT.FOR                    Tuesday Hay 31,  1988   12:00 AM                        Page 1
    1 c		
    2 c™~~	
    3 c
    4 c     ARCH : CALCULATION OF  SCENARIO PRICES AND CS BAINS IN EXEMPTED MARKETS
    5 c
    6 c     Version  6.31  :  May 31,  1988.
    7 c
    8 c     Program  written by:
    9 c
   10 c        Vikram yfdge,  ICF  Incorporated, 9300 lee »wy., VA 22031-1207
   11 c        (703) 934-3000
   12 c
  •13 c	
   14 G~~	
   15 c
   16 Slarge
   17 c
   18 c	
   19 c         ~	!	
   20 c                  This subroutine  calculates the price and
   21 c                  consuner surplus gains in exempted markets.
   22 c		
   23 c	
   24 c
   25       subroutine exempt
   26 e
   27 $include;'vars,emn'
   28 c
   29 c
   30       do 10  i=1,np
   31         ?f (.not. exmpt(idp(i)» go  to  10
   32         tfpp(i)=0
   33         fppflag(i)=0
   34 c
   35         fpq(yr,i)=bepq(yr,i)
   36         pr drop=-1,*(pf1(yr}-bfpe(yr»*awt(i)
   37 c
   38         t«rp=0
   39         if (enctl(yr,idp(l)»  ternp=tenp*ecost{i)
   40         if (labeUyr.idpd')))  tenp=tempHGOSt-avc(i))*fpq(yr,i)
   52         else
   53           fpp(yr,i)»bepp(yr,i)
   54           area5(yr,i)=0
   55           area7(yr,i)=(tfpp{i >-avc(i))*fpq(yr,i)
   56         endi f
   57         go to  10
   58-c
   59 20       pr__drop=-'}.*(pr_drop-teiip)  .
   60         fpp(yr,i)*pr_drop*-t5eppCyr,i)
   61         area5(yr,i >=?fppCyr,i)-bepp(yr,i))*fpq(yr,i)
   62         area7(yr,i)aO
   63 c
   64 10     continue
   65       return
   66       end

-------
FPC1234.FOR                   Tuesday May 31,  1988  12:00 AN                        Page 1
    1  c	
    2  C            —„-— :  :	_

    3  c
    4  c     ARCH :  CALCULATION OF FINAL  SCENARIO FIBER PRICE AND AREAS 1, 2, 1, AND 4
    5  c
    6  c     Version 6.31  : Hey 31,  1988,
    7  c
    8  c     Program written  by;
    9  c
   10  c        Vikram Midge, ICF Incorporated, 9300 Lee Bwy., VA 22031-1207
   11  c        (703) 934-3000
   12  e
   13  c                          	
   14  c~~	
   15  c
   16  *inelude:'stdsub'
   17  $ltrfe
   18  c
   19  c                                            	   .
   20  c	'	
   21  c                this  subroutine calculates fiber price after a
   22  c                usage cap and  then calculates areas 1, 2, 3, and 4.

   24  c™"™ '''	
   25  c
   26        subroutine fpc1234
   27  c
   28  $include:'stdvar'
   29  $include:'vars.cmn'
   30  c
   31  c
   32        integer   st3,end3,ltag3
   33  c
   34        character res,nyc*4,nzc*15

   36  c
   37        i ysyr+baseyr -1
   38        write (nyc,'(i4}'> |y
   39  40     ff  (qcap(yr) .ge.  fqe(yr» then
   40         capr=,true.
   41         call  eeop (4,0)
   42         call  pcsa (9,12,'  THE FIBER CAP QUANTITY SPECIFIED FOR '//nyc//
   43                      'IS NOT BINDING 'c.vrev)
   44         call  pes (12,15,'   The  relevant variable values ares'c)
   45         call  pes (13,15,'                             YEAR * 'II
   46       -                   nyc//'  'c)
   47         write (nzc,'(f10,2}'> qcap(yr)
   48         call  pes (14,15,'               FIBER CAP QUANTITY « '//
   49       -                   nzc{1:10}//' 'c)
   50         write (nze,'{f15.7)') fqe(yr)
   51         call  pes (15,15,'             EQUILIBRIUM QUANTITY "'//
   52       -                   nzc//'  'c>
   53         call  DCS (16,15,'(after bans & exemptions,  if any>'c>
   54         write (nzc,'(f15.7)'} bfqe(yr)
   55         call  pes (18,15,'    BASELINE EQUILIBRIUM QUANTITY * 'II
   56       -                   nzc//'  'c>
   57         call  pes (20,15,'   Do you want to continue?  go to 45
   68         if (qcap(yr) ,ge.  fqe(yr)J go to 40
   69  e
   70         call  eeop (4,0)
   71         call  pcsa (12,25,'  Processing... 'c,vrev>
   72         call  setcur  (vy,vx-1)
   73       endif
   74 c
   75       qcrat=1.0
   76        if (qcap(yr) .eq. 0}  then
   77         pf(yr)-tfps(1)
   78         st3=1
   79         qcrat=0
   80         go to 251

-------
FPC1234.F0R                   Tuesday Hay 31,  1988   12:00 AH                        Page 2


   81        endif
   82  c
   83        do 250 i*1,nstd
   84          if (tfqs(i) .eq.  qcap(yr)) then
   85            pf(yr)=tfps(i)
   86            st3=i+1
   87            go to 251
   88          elself (tfqs(i)  .gt. qeap/(tfqs(i>-tfqs(i-1))
   95            endif
   96            go to 251
   97          endif
   98          if (bfpe(yr)  .ge.  tfps(i)} then
   99            end3*f-1
  100            go to 252
  101          endif
  102  250    continue
  103  251    end3=nstd
  104  c
  105  252    pf1(yr>=slope*qcapm(yr)+rint
  106        fpdif=pf(yr>-bfpe(yp}
  107        if  .It. bfpe(yr)) go to 300
  108        area1s(tfqs(st3>-qeap(yr»*{tfps{st3>"bfpe{yr»
  115            flag3=1
  116          else
  117            area3{yr)sarea3{yr>-KtfqsU}-tfqs(j-i:>>*-bfpe(yr}>
  118          endif
  119  255    continue
  120        area4(yr>a0.5*(fafpe(yr>-pf1(yr»*(bf<|e(yr)"qcapni(yr»
  121        return
  122  c
  123  300    call  eeop (4,0)
  124        call  pcsa {15,25,' W//nyc//'> < BWs('//nye//'} 'c.vrev)
  125        call  setcur (22,0)
  126        stop
  127        end

-------
FPPFPQ.FOR                    Tuesday Kay 31,  1988  12:00 AM                       Page  1
1 c
2 c
3 c
4 c
5 c
6 c
7 c
8 c
9 c
10 c
11 c
12 c
13 c
H c
15 c
16 Slarge
17 c
18 c
19 c
20 c
21 c
22 c
23 c '


ARCM : CALCULATION OF SCENARIO PRODUCT PRICES AMD QUANTITIES
Version 6.31 : May 31, 1988.
Program written by;
Vikram Uidge, ICF incorporated, 9300 Lee Hwy., VA 22031-1207
{703} 934-3000

this subroutine calculates the final price and
quantities for all the product markets, using the
final price and cap quantity in the fiber market.


      c
   25  c
   26        subroutine fppfpq
   27  c
   28  $include:'vars.cnin'
   29  c
   30  c
   31        do  140  i=1,np
   32         if  {exinpt(idpti))  .or.  (swbanCyr,!)  ,eq. 1» go to 140
   33         if  (fps(i,1)  .It.  pf(yr)) then
   34           qf(yr,i)=0
   35           go  to  141
   36         else
   37           do  1401 j=1,nsub(i>
   38             if (fpsCi,j> .It. pf(yr» then
   39               qf
   40               go to 141
   41             elseif {fps{i,j> .eq. pf{yr» then
   42               if (j ,eq, 1) then
   43                  qf{yr,i)=fqrf(yr,f,1>*qcrat
   44               else
   45                  qf=(fqs(yr,i,j)-fqs/awtCi>
   54  c
   55         if  (enctl{yr,idp(i}» fpp(yr»i)=ecost(i)
   56         tf  (label-qrarea{i)/bepq .It. bepp(yr,i» then
   64             fppfl8i(f>s1
   65             tfpp(i)=fpp(yr,i)
   66             fpp(yr,i)=bepp(yr,i)
   67           endif
   68  c
   69         else
   70           fppfl8g{i)=0
   71           fPP*fppCyr,f >+fpdif*swt{i>+bepp(yr,i)
   72         endif
   73         call area5678 (!)
   74  140   contirwe
   75       return
  76       end

-------
HEADER.FOR                    Tuesday Nay 31,  1988   12:00 AM                        Page 1
    1 c	
    2 c:	~~	
    3 c
    4 C     ARCH :  OUTPUT HEADER SUBROUTINE
    5 c
    6 c     Version 6.31  : May 31,  1988.
    7 c
    8 c     Program written by:
    9 c
   10 c        Vikram Nidge,  1CF Incorporated, 9300 Lee Hwy., VA 22031-1207
   11 c        (703) 934-3000
   12 c
   13 c		
   14 c                     ~~~~       '	!	
   15 e
   16 Slarge
   17 c
   18 c	
   19 c                                   _____        ,	.	:	

   20 c     This subroutine writes  the  header for the output to a file or printer
   21 c_	
   22 c	'•	'—'	
   23 c
   24       subroutine header (idt)
   25 c
   26 $inelyde:'vsrs.ewi'
   27 c
   28 c
   29         if (ipage .ne.  0) write (3,'(a)') pgbrk
   30         ipage=ipage+1
   31 c
   32         write {3,'(t64,2a)'>  'Date:  'rdstr
   33         write (3,'(t64,2a)'}  'Tine:  ',tstr
   34         write (3,'{t64»a,i2/}') 'Page: '.fpage
   35 c
   36         if {idt .eq, 1) return
   37 c
   38         if (ipage .eq.  1) then
   39           write (3,'(t28,e>'> 'REGULATION SCENARIO'
   40           if  (pgbrk  .eq.  'V> write  <3,'
-------
IDDC.FOR                      Tyesday Bay 31,  1988   12:00 AX                        Page 1
    1  c	       	
    2  c~  ~	'	
    3  c
    4  c    ARCM  ;  INDIVIDUAL PRODUCT  STEP-DEMAND FUNCTIONS
    5  c
    6  c    Version 6.31  :  Hay 31,  1988.
    7  c
    8  c    Program written by;
    9  c
   10  c       Vikram Midge,  ICF  Incorporated, 9300 Lee Huy.,  VA 22031-1207
   11  c       (703)  934-3000
   12  c
   13  c	
   14  c           '	'	!	
   15  c
   16  Slarge
   17  c
   18  c		
   19  c                                      :	

   20  e                  This Subroutine calculates the Individual
   21  c                    product  market Derived Demand Curves,
   22  c                                     	
   23  c                         '   ~~   '	
   24  c
   25       subroutine Iddc (elc fl)
   26  c
   27  $include:'vars.c«n'
   28  c
   29       integer elc fl
   30  c
   31  c
   32       do 30 i=1,np
   33         temp=Q
   34         if (enctl(yr,Sdp(i))) tefnp=tefflp+ecost(t)
   35         if (label tenpsterap+lcost(i)
   36         temp=tenip*elc fl
   37  c
   38         do 301  j=1,nsub(i>
   39           fps(i,j)=8fpe*{psCyr,i,j>-aepp{i>-terap)/OHt(iJ
   40           f qs(yr, i, j >=C)S*fqs(yr,i,j-1>
   44           endif
   45  c
   46  301     continue
   47  c
   48         if 
   50           if +qrarea{iJ/fcis(yr,i,r»syb{i}>
   52  302     continue
   53  30    continue
   54  c
   55       return
   56       end

-------
RES_CHK.FOR                   Tuesday Hay 31,  1988  12:00 AM                       Page 1
1 c
2 c
3 c
4 c
5 c
6 c
7 e
8 c
9 c
10 c
11 c
12 c
13 c
ARCH ". USER RESPONSE CHECK SUBROUTINES
Version 6.31 : Kay 31, 1988.
Program written by:
Vikram yidge, ICF Incorporated, 9300 Lee Hwy., VA
(703) 934-3000
22031-1207
14 C
15 c
16 Sine lode s'stdsub'
17 Slarge
18 c
19 c
20 c 	
21 c
22 c
checks for a Y/N response

23 C 	 — 	 ' 	 	
24 c
25 subroutine ynchk (*,*)
26 c
27 $inctude;'stdvar'
28 c
29 c
30 character res
31 c
32 c
33 fy=vy
34 fx=vx
35 c
36 10 cell setcur (iy,ix)
37 call eeol (vy,vx>
38 read (*,'(a>'> res
39 c
40 if ({res .eq. '¥'} .or. (res .eq. 'y'» return 1
41 if ((res .eq. 'N'J .or. (res .eq. 'n'» return 2
42 90 to 10
43 c
44 end
45 e
46 c
47 c
48 c 	
49 c
50 c
51 c
This subroutine scrolls the fiber cap screen
at a tine to display the complete schedule.
one line
53 e
54 subroutine more
55 c
56 $melude:'stdvar'
57- c
58 c
59 call pcsa (22,28,' More to come... 'c,vrev)
60 kk=vx-1
61 call pcs (24,25,'Press any key to continue'cj
62 call setcur (22, kk)
63 ipse*=key getcO
64 call eeop (22,0)
65 call upscroll ( 1,1 1,20,0, 79, vnonn)
66 c
67 return
68 end
69 c '
70 c
71 c
72 c
73 c
74 c
75 c
76. c 	
77 c
78
79 c
This subroutine checks to see if output file
and informs user appropriately.
subrout i ne f f 1 e_ehk ( i , j 3
exists

   80 $include;'stdvar'

-------
RiS_CHIC.FOR                   Tuesday May 31,  1988  12:00 AM                        Pafe  2


   81 $inelude:'vars.cmn'
   82 c
   83 c
   84       If 
  119       if  {a  .eq.  'e'>  call  pcs (vy,vx,'CONTROLLED'e>
  120       if    call  pcs (vy,vx,'LABELED'c)
  121 c
  122       call pcs (vy.vx,' product  #'//nyc//' HK'c)
  123       j=ichk d,ip)
  124       call eeop (22,0}
  125 c
  126       if  (j  .eq.  -99>  then
  127        urite  (nyc,'(i2)'>  ip
  128        call pcsa (22,10,'  THE TSCA  # OF THE PRODUCT SHOULD '//
  129      -       'BE BETWEEN  1  AND '//nyc//' 'c,vrev>
  130        go to  10
  131       endIf
  132 c
  133       return
  134      end
  135 c
  136 c
  137 c		
  138 c                                                   ~~~	
  139 c             This subroutine requests a year end checks to see if year  is
  140 c             specified correctly within the scenario.
  141 c	*____
  142 c      '               —	
  143 c
  144      subroutine yr chk (ir,ifl,iye>
  145 c
 •146 $lnclude:'stdvar'
  147 Sincludes'vars.emn'
  148 c
  149 c
  150      character   nye*4,nze*4
  151  c
  152 c
  153       iysvy
  154       ix=vx
  155 c
  156 10    vy=iy
  157      vx=ix
  158 c
  159       if  (ifl  .eq. 0)  then
  160        ir=ichk (1,endyr-baseyr)

-------
RES_CHK.FOR                   Tuesday May 31,  1988  12:00 AM                       Page 3


  161       else
  162         fr=ichk (baseyr+1,endyr>
  163       endif
  164 c
  165       call eeop (iye,0)
  166 c
  167       if 
  172         else
  173           write (nyc,'(i4)') baseyr
  174           write {nzc,'(i4)') endyr
  175           call  pcsa (22,25,' YEAR NOT  IN SPECIFIED  RANGE  'e,vrev)
  176           call  pesa (23,20,'SHOULD 8E  SPECIFIED  BETWEEN '//nyc//
  177      -                     'AMD '//nzc//'  'e.vbold)
  178         endif
  179         go to  10
  180       endif
  181 c
  182       return
  183       end
  184 c
  185 c
  186 c	
  187 c                                 ~	:	
  188 c            This  subroutine checks to  see  if the  tuiriber of products
  189 c            specified ore in the acceptable range.
  190 c.	
  191 c    —	——
  192 c
  193       subroutine nprd chk (ir,fye,a,iy4>
  194 c
  195 $inelude:'stdvar'
  196 $include:'vars.cmn'
  197 c
  198 c
  199       character  nyc*4,a
  200 c
  201 c
  202
            203 tO     write 
  205 c
  206       if  (a .eq. 'b') call  pcs (vy,vx,'BANNED'e>
  207       if  (a .eq. 'e') call  pcs (vy,vx,'CQNTRQLLED'e>
  208       if  (a .eq. 'I') call  pcs (vy,vx,'LA8EUsD'e>
  209 c
  210       call  pcs  (vy.vx,'  in  '//nyc//' (99 for all products} MW'c)
  211        ir=ichk C1,99)
  212       call  eeop (iye,0>
  213 c
  214       if  (ir .eq. -99) go to 10
  215       if  ((ir .gt.  ip) .and.  (ir .ne. 995) then
  216        write (nyc,'(i2)')  ip
  217        call pcsa (22,20,'  A MAXIMUM OF  '//nyc(1:2>//
  218      -                    '  PRODUCTS MAY'BE SPECIFIED 'c,vrev>
  219        go  to 10
  220       endi f
  221  c
  222       return
  223       end
  224  c
  225  c
 -226 c	,	
  227 c         ~~   ~                 '	:	——————	.	.	
  228 c            This subroutine displays the appropriate error message
  229 c            regarding party id during  the  permit allocation process.
  230 c	
  231  c~      ~~~	
  232  c
  233       subroutine pty  chk  (!,*)
  234  c
  235  $iriciude;'stdvar'
  236 e
  237 c
  238       if  (i .eq. 03 then
  239        call pcsa (24,20,'  THE  PARTY ID  ENTERED  IS NOT VALID 'c.vrev)
  240       elseif (i .eq.  1} then

-------
RESJIHK.FOR                   Tuesday «ay 31,  1988  12:00 AH                        Page 4


  241         call pesa (24,10,' THE NUMBER OF PARTIES SHOULD BE '//
  242      -                   'SPECIFIED BETWEEN 1  AMD 9 'C,vrev)
  243       elseif 
-------
SAREA6.FQR                   Tuesday May 31,  1988  12:00 AM                        Page 1


    1 c		
      c                     •   -                   —        —

    3 c
    4 c     ARCH :  CALCULATIOM OF AREA 6
    5 c
    6 c     Version 6.31  : Nay 31, 1988.
    7 c
    8 c     Program written fay:
    9 c
   10 c       Vikram Widge, 1CF Incorporated, 9300 Lee Hwy., VA 22031-1207
   11 c       <7Q3) 934-3000
   12 c
   13 c	
   14 c                                        "
   15 c
   16 Slarge
   17 c
   18 c
19 c
20 c
21 c
22 c
23 c
24
25 c
This Subroutine calculates AREA 6.
subroutine sarea6 (i)
   26 iinclude:'vars.cmn'
   27 c
   28 c
   29       integer st6,end6.f Ug6
   30 c
   31 c
   32       area6(yr,i)=0
   33       If  {fpq(yr,i3 .eq. bepq(yr,i3) return
   34 c
   35       do  190 j=1,nsyb(i)
   36        if  {(qcap(yr) .eq. 0) .or. (fpq(yr,f)  .eq.  0)5 then
   37          st6=1
   38          fpq(yr,i)=0
   39          go to 193
   40        endif
   41  -      if  (qsKyr.l.j) .It. fpq(yr,i» ao to  190
   42        if  (qs1(yr,i,j) .eq. fpq(yr,i» st6=j+1
   43        if  (qs1(yr,i,j) .gt. fpq(yr,i» st6«j
   44        §o  to 193
   45 190   continue
   46 193   flag6sO
   47       do  195 l=st6,nsubCi>
   48        if  {flag6 .eq. 0) then
   49          area6(yr,j)=(qs1(yr,i,st6>-fpct-bepp(yr,i}5
   SO          fUi6=1
   51        etse
   52          area6{yr,i)sarea6-Kqs1{yr»i,!}-qs1{yr,i,l-1)>*
   53      -                            (psCyr.i.U-fae^Cyr.f}}
   54        endif
   55 195   continue
   56       return
   57       end

-------
SINtT.FOR                     Tuesday May 31,  1988  12:00 AM                       Page 1
    1 c	
    2 c	;	~
    3 c
    4 c     ARCM : INITIALIZATION OF Ail ARRAYS
    5 c                                                          •
    6 c     Version 6.31  ; May 31, 1988.
    7 c
    8 c     Program written by:
    9 e
   10 c        Vikrara Uidge, ICF Incorporated,  9300 Lee Hwy.,  VA 22031-1207
   11 c        (703) 934-3000
   12 c
   13 c__	
   14 c                                        		
   15 c
   16 $large
   17 c
   18 c			
   19 c	"	
   20 c                   This Subroutine INITializes all  arrays.
   21 C	;	r
   22 c~	—	
   23 c
   24       subroutine sinit
   25 c
   26 Sincludes'vars.cnn'
   27 c
   28
29
30
31
32
33
54
35
36
37
38
39
40
41
42
43 c
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59 c
60
61
62
63
64
65 4747
66 3737
67 c
68
69
70 3738
71 2727
72 c
73
74
75
76
77
78
79
do 2727 l»1, ny
fpeCl}-0
fqe(l)«0
bf pet I )«0
bfqe*0
area2(t)~0
area3{l>=0
area4( I )=0
. pf(l>=0
pfUl>*0
qcap{ I )=0
qcapmC I )=0
byear< t >«0

do 3737 ia1,itn
epp(l,i)=0
^sq( i , i >=0
beppC t , i )=0
bepqU,i>=0
area5(l,i}=0
are«6( I , i >=0
area7Cl,l)=0
areaSC 1 , i )=0
«rea8p{ l,i )«0
qfe(l,i>-0
qf(t,i>=0
f pq< 1 , i )~0
f pp{ I , f )=0
swbanC I , i >=0

do 4747 j»1,ks
ps(l,i,j)«0
qs(l,f,j>«0
qt1Cl,f,J)«0
fqs(l,i,j)=0
continue
continue

do 3738 i*1,ip
isban(l,i>aO
continue
cont 1 nue

do 5757 1»1,1m
avcC i >=0
swqr(i>=0
nsubC 1 >=0
fppf iag(i)KO
tfpp(i)=0
qrarea{ i >=0
  80 c

-------
SIKlt.FOR                     Tuesday Hay 31,  1988  12sOO AM                        Page 2
81
82
83 6767
84 5757
85 c
86
87
88 1234
89 C
90
91
92
93
94
95
96
97
98
99
100
101 C
102
103
do 6767 j=1,ks
fps=0
continue
cent i nue

do 1234 i=1,1Q
dfscrt(i)=0
continue

perra(1)='Dooi. Miners S Millers'
pern!C2>=* Foreign Miners & Milters'
penn(3}=' Importers Of iylk Fiber'
perniC4)»'Dom. Primary Processors'
perm(5 5* 'Foreign Primary Processors'
perm(6}*' Jnparters Of Mixtures'
pennC7)sf Importers Of Products'
perra(8)='Dom. Product Purchasers'
perm(9J='For. Product Purchasers'
perraC 1 0 )* ' Sovernraent '
p«rm(11)='Total'

return
end

-------
TABAGG.F0R                    Tuesday May 31,  1988  12:00 AH                        Page 1
    1 c	
    2 c	~	
    3 c
    4 c     ARCH ; AGGREGATE TABLES OUTPUT  SUBROUTINE
    5 c
    6 c     Version 6.31  :  May 31,  1988.
    7 c
    8 c     Program written by:
    9 c
   10 c        Vikran Widge, 1CF Incorporated, 9300  Lee Buy., VA 22031-120?
   11 c        (703) 934-3000
   12 c
   13 c	
   U c      :	~~~	
   15 c
   16 Starge
   17 c
   18 c		
   19 c      ——	-___	

   20 c        This subroutine writes the 'welfare effects by market' tables
   22 c        •	,____

   23 c
   24       subroutine tabagg (itab,drt,fjbes,fibps,pval}

   26 $include:'vars.cnn'
   27 c
   28 c
   29       real         c(ip),p(ip>
   30 c
   31        character   ctab*2
   32 c
   33       character*80 us2.us3
   34 c
   35 c
   36       write <3»'{a>«)  pgbrk
   37       ipage=ipage+1
   38 c
   39       if  Citab .eq. 1> Gtab=»'1A'
   40       if  (itab .eq. 2) ctab='1S'
   41  c
   42       write (3,'(t64,2a3'> 'Date: ',dstr
   43       write (3,'(t64,2a)') 'Time: ',tstr
   44       write (3,'(t64,a,i2/>'>  'Page:  ',ipage
   45        write (3,'(t26,2a)'> '           TABLE ',etab
   46       if  (pgbrk .eq.  '1'}  write C3,'<«,t26,a>') *+','           	'
   47       write <3,'C//t26,a>') 'WELFARE EFFECTS §Y PRODUCT MARKET'
   48       if  (pgbrk .eq.  M'} write C3,'(a,t26,a)') '+',
   49     -            .        '                           	   I
   50        if  {itab .eq. 2)  write (3,'C/t31,a>'} '(Domestic Iffacts only)'
   51        write (3,'C/t15,2a,f4.1,a//)') '(Present Values, in thoisand ',
   52      -                         'dollars, at ',drt,'  percent)'
   53        us2=' Market        CS Loss       PS Loss         Permit'
   54        us3='=cons
  69           p(idp(j))=pros
  70         endif
  71 c
  72         write  (3,firrtC1)3 idp(j3,cons,pros,banni(j}
  73 30    continue
  74 c
  75        if  (itab  .eq. 2} Write (6) drt,(c(i),p(i),i=1,ip>,fibcs,fibps
  76 c
  77        if  (option .eq.   1} then
  78         write (3,fmt{12}> 'Fiber',fibcs,fibps
  79       else
  80         write (3,fmt(2» 'Fiber',fibcs,fibps,pval

-------
TABACS.FOR                    Tuesday May 31,  1988  12:00  AH                       Page 2
81
82 c
83
84 c
85
86
87
88
89
90 c
91
92
93
94
95
96
9?
98 c
99
100
101
102
103
104
105
106 c
107
108
endif

write (3,'(7x,a/)') us

write {3,'C/10x»a/)'>
write {3,'(10x,a}')
write <3,'(10x,a>')
write (3,'(1Qx,a)'>
write (3,'<10x,a//)')

write C3,'(/10x,a)'> '
» i
write {3,'')
-

if  then
write{3,'C1Qx»8>'} '
,. t
else
writeC3,'{10x,a}'> '
i
endif

return
end


1

L1GENO FOR PRODUCT STATUS:'
B Banned'
X exempted from regulBtiort'
E Engineering controls active'
I Labeling requirements'

Note: 1. Negative entries are welfare'//
gains.'
' 2. CS Loss in the Fiber market is*//
' the sun of all downstream'
producer and consumer welfare losses.'
' 3. Consumer and producer surplus '//
'losses reported above are'


for foreign and domestic '//
consumers and producers.'

for domestic consumers and '//
producers only.*





-------
TDDC.FOR                      Tuesday Hay 31,  1988  12:00 AM                       Page 1


    1 C	
    2 C
    3 C
    4 C     ARCH :  TOTAL DERIVED STEP-DEMAND  FUNCTIONS
    5 C
    6 C     Version 6.31 :  Hey 31,  1988.
    7 C
    8 C     Program written by:
    9 C
   10 C        Vikrain Midge, 1CF incorporated,  9300 Lee Hwy.,  VA 22031-1207
   11 C        {703) 934-3000
   12 C
   13 C	
   14 C
   15 C
   16 SUrge
   17 C
   18 C	
   19 C                               !
   20 C       This  subroutine calculates  Total  Derived Demand  Curve for fiber.
   21 C	
   22 C                                      :
   23 c
   24       subroutine tddc (bftag)
   25 c
   26 $inelude:'vars.cnn'
   27 c
   28
29
30 c
31
32 c
33 c
34
35
36
37
38
39 5757
40 c
41
42
43
44
45
46
47
48
49
50
51 2011
52
53
54 201
55 20
56 c
57
58
59
60
61
62
63 2101
64 210
65 c
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80 1011
real tfhq(250),tfvq(2505

integer bflag


do 5757 a»*1,250
tfpS(Bl)sQ
tfqs(m)=Q
tfhq(ai>=0
tfvq<»>=0
continue

nstd=0
do 20 i=1 ,np
if ((option .eq. 1) .and. (bflag .eq, 1} .and.
(SHban(yr.i) .eq. 1» 90 to 20
if ((option .ne.1> .and. (bfleg .eq. 1} .and.
((swbarKyr, f) .eq. 1) .or. exmpt(idpCi)))) 90 to 20
do 201 js1,nsub(i)
if (fqs(yr,i,j) .It. 0.0001> go to 201
do 2011 k=1,nstd
if (fps(i,j> .eq. tfps(k)) go to 201
continue
nstd=nstd+1
tfps{nstd)=fps(i,j>
cont i nue
continue

do 210 i=1,nstd-l
do 2101 j«i+1,nstd
if (tfps(i) .flt. tfps(j» go to 2101
ttonpBtf ps( 1 )
tfps(i>«tfps{j>
tfps(j)«tt«np
eont 5 nue
continue

do 10 k-l.nstd
do 101 1=1, np
if ({option .eq, 1) .end. (bftag .eq. 1} .and.
(swtenCyr.i) .eq. 1» go to 101
if {(option .ne.1) .end. (bflag ,eq. 1> .and.
((swbarKyr, i) .eq. 1) .or. exmpt{idp(i»)> go to 101
do 1011 j=1,nsub(i3
if (tfps(k) .le. fps(i,j» then
if 
-------
TODC.FOR                      Tuesday May 31,  1988  12:00 W                        Page 2


   81 101     continue
   82 10    continue
   83 c
   84       return
   85       end

-------
ARCM_AMD.FOR                  Tuesday May 31, 1988  12:00 AH                        Page 1
    1 c	
    2 c                                                  ™~~—
    3 c
    4 c     ASBESTOS REGULATORY COST MODEL (ARCH) :  MAIN PROS8AM
    5 c
    6 c     Version AMD : Hay 31 ,1988.
    7 c
    8 c     (version for use instead of  apcm.for «hen either
    9 c      aftermrket brakesc are not banned within 4 years
   10 c      of OEM brakes or if declining prices of substitutes
   11 c      are used)
   12 c
   13 c     Program written by:
   14 c
   15 c                           Vikranr yidge
   16 e                           ICF Incorporated
   17 c                           9300 Lee Highway
   18 c                           Virginia 22031-1207
   19 e
   20 c                           (703)  934-3000
   21 e
   22 c     Accompanying Documentation:
   23 c
   24 c           1. User's Manual
   25 c           2. Technical Support Document
   26 c
   27 c	
   28 c           ——	
   29 c
   30 $inctude:'stdsyfa'
   31 Slarge
   32 c
   33 c
   34       program   arcm
   35 c
   36 $include:'stdvar'
   37 Sincluder'vars.cmn'
   38 c
39
40 c
41
42
43 c
44
45 c
46 c
47 c
48 c
49 c
50 c
51 c
integer onsub(im)
character istr{6}*55
real amq{ny,36:37)
common/ amq/amq
this section prints the opening statement on the screen

   52       call  vfnit
   53       call  crt els
   54       call  box~(0,3,15,63,vnorm)
   55       call  pcsa {1,17,'EPA/OTS Asbestos  Regulatory Cost Model  (ARCK)'c,
   56      -           wold)
   57       call  pcs  {2,17,'                  Version AMD'c)
   58 c
   59       istr(1)='This  program models  the economic impacts and costs of'c
   60       istr{2)='ssbestos  fiber and product  regulations.  It permits a'c
   61       istr<3)a'variety of regulatory  options  to be implemented and'c
   62       istr{4)='allows  flexibility in  their implementation.  For'c
   63       istr(5)='assistanee in using  this  model please  refer to  the'c
   64       istr(6)='acGompanying user"s manual and  related docunentatton.'c
   65 c
   66       do 1  i=1,6
   67        call pcs Ci+7,13»istr{i>3
   68 1      continue
   69 c
   70       cell  pcs (20,20,'Please respond to queries as indicated.'c)
   71       call  pcs (24,25,'Press any key  to  continue'c)
   72       call  setcur (vy,vx)
   73       ipse=key geteC)
   74 c
   75       call  eeop (5,0)
   76       call  pcs (9,20,'Refer any specific questions regarding'c)
   77       call  pcs {10,20,'operation of this program to:'c)
   78       call  pcs (12,30,'Vikram Widge'c)
   79       call  pcs (13,30,'ICF  Incorporated'c)
   80       call  pcs (14,30,'9300 Lee Higbway'c)

-------
ARCMJWD.FQR                  Tuesday May 31,  1988   12:00 AM                        Page 2


   81       call  pcs (15,30,'Virginia 22031-1207'c)
   82       call  pcs (17,30,'(703)  934-3000'c)
   83 c
   84       call  pcs (24,25,'Press  any key to  continue'c)
   85       call  setcur (vy.vx)
   86       ipse=key gete()
   87 c
   88       call  eeop (5,0)
   89       call  pcsa (12,25,'  Initializing...  'c,vrev)
   90       call  setcur (vy,vx-1)
   91 c
   92       call  sinit
   93       call  asbin
   94 c
   95 c
   96       if  (option .ne.  1)  then
   97        write <*,*)  'this  version is for  declining substitute prices'
   98        write (*,*)  'and  currently does not support non-ban options'
   99        stop
  100       endif
  101 c
  102       do  1492 i=1,np
  103        if (=.true.
  127        endif
  128 c
  129        if  (cprat(i) ,gt.  1) epq(1,i)aepq(1,i)*cprat(i)
  130 c
  131         bbpq(i>=epq(1,i)
  132 c
  133        fqe(1)=fqe(1)+epq(1,i)*awt(i)
  134 c
  135         idif=baseyr-ibyd
  136.        do 357  ij=1,idif
  137          if  (ij  .It. 15)  then
  138            ig=ij
  139          else
  140            igs15
  141           endif
  H2          epq(1,i)=epq(1,i)*(1+grthrt(i,ii»
  143 357     continue
  144  c
  145         bepq(1,i)=epq(1,i>
 -146 c
  147 310   continue
  148  c
  149  c                                     '
  150  c
  151       slope=fpe(1)/(selast*fqe(1))
  152       rint=fpe(1)-slope*fqe(1)
  153       If (selast  .eq. 1) Hnt=0
  154  c
  155       bbfcpfqed)
  156       fqe(1)BO
  157  c
  158
  159  c
  160       do 4638 i=1,np

-------
ARC«_W®.FOR                  Tuesday Hay 31,  1988  12:00 AM                      Page 3
161
162 4638
163 c
164
165
166
167 c
168
169
170
171
172 c
173
174
175
176
177
178
179
180
181 c
182
183 c
184 468
185 c
186
187
188 c
189 c
190
191 c
192
193 c
194 c
195 c*~
196 c
197 c
198 c
199 c
200 1111
201 c
202
203
204
205 c
206
207
208 c
209
210
211
212 c
213 3001
214 c
215
216
217
218
219
220
221
222
223
224
225
•226 2011
227 c
228
229
230
231 201
232 e
233
234 c
235
236
237 c
238
239
240
fqe{1>=fqe(1)+epq(1,i)*aHtCi)
cent i nue

afpe=fpe(1>
fpe(1)=rint+slope*fqe(1>
if (fpe(1) .gt. afpe) go to 44444

do 468 f=1,np
aepp(i)=epp(1,i 5
epp<1 , f )=(f pe(1 )-afpe)*awt(i >+epp(1 , i )
bepp(1,i}sepp{1,i>

if (reost{i) .gt. Q> then
qrareaC i >«ccost{ f )*epq< 1 , i )+rcost( i )
avc{ i )=epp{ 1 , i } - (qrareaf 5 )/epq( 1 , i ) )
elseif (ecostO") .gt. 0) then
avc( i >=epp{ 1 , i" ) -ccostC i )
else
go to 468
endif

swqr(i)*1

continue

bfped>=fpe(1>
bfqe{1)=fqed)


call adjust

yr=2



this section modifies the product demand curves annually.



do 300 i=1,np

do 3001 jsl,onsub(i)
a*(1+fdiscrt>**ns(i,j)
b»C1+fdisert)**na{i)

if (ns(i,j) .ne. na{i»
aps(yr,i,j>*aps(yrfi,j}*(8/b)*(b-1>/(a-1}

if (aps(yr,i,j) .It. aepp(i» then
apsCyr i IJ^aeppCi}
endif

continue

if 
do 2011 k=1,insub
If (aps(yr, j,j) .eq. ps(yr,f,k» then
ms< i , k)=ms( i , kH-amst i , j 5
go to 201
endif
cent i nue

insubMnsub+1
psCyr, i , insub)*aps(yr, i , j)
ms( i , i nsub)sanis( i , j 5
continue

nsub(i)sfnsub

do 4631 j=1,nsub(f)-1
do 46311 k=j+1,nsubCi)

ff (ps(yr,i,j) .eq. ps(yr,i,k» then
call eeop (5,0)
call seteur {12,0}

-------
ARCM_AMD.FOR                  Tuesday May 31,  1988   12:00 AH                        Pas* 4
241
242
243
244
245
'246
247
248 c
249
250
251
252
253
254
255
256 c
257 46311
258 4631
259
260 c
261 462
262
263
264
265
266 4621
267 c
268
269
270
271
272
273
274
275
276
277 c
278 300
279 c
280 c
281
282 e
283 c
284
285 c
286
287
288 c
289
290
291
292
293
294 c
295
296 4002
297 c
298
299
300
301
302
303
304
305 4001
-306 c
307
308
309 c
310
311
312
313 c
314 c
315 c
316
317 c
318
319
320
write (*,*) ' PRICES OF SUBSTITUTES STILL EQUAL'
write (*,*) ' YEAR:',baseyr+yr-1,' MARKET:' ,idp(i)
write (*,*) ' SUBSTlTUTES:',j,k
write {*,*) ' PRICES:', ps(yr,i, j),ps(yr,i,k)
call seteur (22,0)
stop
endif

if (ps(yr,i,j) .gt. ps{yr,i,k» go to 46311
ptemp=ps(yr,i,j>
efnte«p=i!)S(i,j)
ps(yr,i,j5=ps(yr,i,k)
ros(i,j}=ms{i,!O
ps(yr,i,k)=ptemp
ms(i,k)=emtenp

continue
continue
endif

eount=0
do 4621 j=1,nsub{i)
count=count+»s( i , j }
lnsub( i , j >= . false.
if (swqr(i) .eq. 1) InsubCi, j)=.true.
continue

if ((count .It. 0.999999} .or. {count .gt. 1.000001)) then
call eeop (5,0)
call sttcur (12,0)
write (*,'(5x,2a,i2,a,f14.7,atl4)') 'MARKET SHARE(S> OF ',
'SUBSTITUTES I« MARKET ',idp(}),' ADD TO ', count, ' IK YEAR ',
yr+baseyr-1
call seteur (22,0)
stop
endif

continue


qcap(yr)=qcapm(yr)


do 400 i«1,np

cur bseq=epq(1,i)
do 4002 ig=baseyr-ifayd+1,yr

if (ig .gt. 15) then
5gj=15
else
lgj=ig
endif

cur bseq»cur bseej*(1+grthrt(i,igj))
continue ~

do 4001 j«1,nsub(i)
qs(yr, i , j )scur_bseq*fns( i , j )
if (j .eq. 1) Ihen
qs1(yr*qs1 (yr, i , j-1 )+qs(yr, i , j )
endif
continue

rq=qs1 (yr , i » nsyb( i ) )
if (rq .eq. 0.) swqr(i)*0

if (swqr(i) .eq, 1) then
qrspea( i )=ccost ( i )*rq*rcost( 5 )
endif

**** engineering control cost calculation ****

if (rq ,ne. 0) eeost(i)=(fecost(i>+vecost(i)*rq)/rq

if (exrapt(»dp(i))) then
if (qeap(yr) .eq. 0) then
qc8pm(yr)ssqG8pm(yr>+(8Mt(i >*qs1(yr, i , nsubci ))}

-------
ARCM_AW>.FOR                  Tuesday May 31,  1988  12sOO AM                        Page 5


  321           else
  522            qeap(yr)=qe8p{yr}-(awtci)*qs1(yr,i,nsub{i»>
  323 c
  324            if (qcap(yr)  .It.  0) then
  325              call  eeop (5,0)
  326              call  setcur (12,0)
  327              write (*,'(10x,a,i4//>'>  'MODIFIED  FIBER CAP < 0  IN  '//
  328      -                                'YEAR  ',baseyn-yr-1
  329              write (*,'{2(10x,a,f13.7/»'>  'INPUT CAP    « '.qcapmCyr),
  330      -                                     'MODIFIED CAP « ',qeap 'ERROR  AT EXEMPTED PRODUCT #'
  332      -                               idpCi)
  333              call  setcur (22,0)
  334              stop
  335            endif
  336 c
  337           endff
  338         endff
  339 400   continue
  340 c
  341       call iddc (0)
  342       call tddc {Q>
  343       call eqpq
  344       if (afpe ,ge.  fpeCyr}}  go to  2222
  345 c
  346 44444 lyr=yr+baseyr-1
  347       celt eeop (5,0)
  348       call setcur  (12,0)
  349       write (*,'(15x,8//)'> 'BASELINE  FIBER  PRICE > '//
  350      -                     'DATA YEAS FIBER PRICE'
  351       write tVClOx,8,i4,a,f 14.7/)')  'Baseline  fiber price for ',
  352      -                                iyr/  »  ',fpe{yr5
  353       write  'Data year  C'.ibyd,
  354      -                              ')  fiber  price  « ',afpe
  355       call setcur  <22,0)
  356       stop
  357 c
  358 c
  359 2222  bfpe{yr)sfpe(yr)
  360       bfqe{yr>=fqe(yr>
  361       do 210 i*1jnp
  362         beppC yr,i ><=epp{yr,i)
  363         bepq=ainc)(yr,idp(i))*ins(i,j3
  392 c
  393             if 
-------
ARCMJWO.FOR                 Tuesday May 31,  1988  1Z:00 AN                       Pafe 6


  401 4926  continue
  402 c
  403       call  iddc (0>
404
405
406
407
408
409
410
411
412
413
414
41S
416
417
418
419
420
421
422
423
424
425
426
427
428
429
430
431
432
433
434
435
436
437
438
439
c

c ***********************#******«»#»*****«*********
c
call tddc {1}
if (option ,eq. 3)
call banesqr
call eqpq
c
if (option .eq. 1}
If (fpe(yr) .eq.
call aronban
90 to 8888
endif
c
2339 capr=. false.
call f pel 234
call fppfpq


go to 2339



then
0) fpe .ne.
call pcsa (18,15,


ie» fo to 1111



completed 'c,vrev>

'Ipt1'> then
'TO PRINT OUTPUT FILE '//
fnajne(3H1:lencbCfnameC3m//' ENTER'c.vbotd)
call pcsa (19,15,
tn AT
endif
call seteur (22,0)
c
stc^>
end
">PT ARCK '//fn8meC3)(1:lerK:h(fname(3)»//
THE DOS PROMPT. 'c.vbold)






-------
ADJUST.FOR                    Tuesday Hay 31,  1988  12:00 AH                       Page 1
    1 c		
    2 c~~~	
    3 c
    4 c     A8GM : AFTERMAKET ADJUSTMENT DUE TO OEM SAN
    5 c            (used only with srcm_amd.for)
    6 c
    7 c     Version At® s Hay 31,  1988.
    8 c
    9 c     Program written by:
   10 c
   11 c        Vikram yidje, ICF Incorporated,  9300 Lee Hwy., VA 22031-1207
   12 c        C703) 934-3000
   13 c
   14 c _,...__	
   15 c	—
   16 c
   17 c	;	.
   1g c_—	:	

   19 c   Adjustment of Aftermarket due  to OEM  ban  and  calculation of OEM losses
   20 c	
   21 c                 ~     !	
   22       subroutine adjust
   23 c
   24 $inelude:'vars.cmn'
   25 c
   26       real       amq(ny,36:37),oenq)*<1+3rthrt£i»igj5)
   43 20       continue
   44         endif
   45 c
   46         if  (CidpCi) .eq. 36) .or.  {idp{i> .eq. 37)J then
   47          amc|{1,idp{i))*bepq(1,i)
   48          do 30 iy=2,enoVr-t>aseyr+1
   49             igj=baseyr-Ibyd+iy-1
   50             if 
   79                 if (k  .eq. 4)  then
   80                   atemp=oemq{iy-4,idp(i»*0.977

-------
ADJUST. FOR                    Tuesday May 31, 1988  12:00 W                        Page 2


   81                 elseif (k .eq. 8} then
   82                   8tempa8temp*oemq(fy-8,idp(i»*0.839
   83     .            elseif (i>+18)  .te.  0)  then
   92                 call  pcs (15,10, 'aftermarket qty.  < or = O'c)
   93                 call  seteur (17,10}
   94                 write (*,51) 'year',i"vN-baseyr-1,'mkt.',idp(i}+18,
   95      '                       'a/m  qty.',amq{iy,idpCi}+18)
   96 51               format (t11,8,2x,i4,3x,a,2x,i"2,3x,a,2x,f10.1J
   97                 call  seteur (20,0)
   98                 stop
   99               endif
  100             endif
  101           endif
  102 60       continue
  103 40    continue
  104 e
  105      return
  106      end

-------
RRiANJW.FOR                  Tuesday May 31,  1988   12:00 AH                        Page 1
    1 c.  ..   .               	
    2 c~~	"
    3 c
    4 c     ARCH :  CALCULATION  OF  AREAS UNDER  BANS ONLY
    5 c            (version of  aror»ban.for  used with aron and.for)
    6 c
    7 c     Version A» :  May 31,  1988.
    8 c
    9 c     ProiraM written by:
   10 c
   11 c        Vikram Widge,  ICF  Incorporated, 9300 lee Hwy., VA 22031-1207
   12 c        (7035 934-3000
   13 c
   14 c	              	
   15 c"	'	
   16 c
   17 SUrge
   18 c
   19 c	;	
   20 c'	
   21 c                   This subroutine calculates the CS gains
   22 c                   and PS  losses  when only bans take place,
   23 c		
   24 c	
   25 c
   26       subroutine aronban
   27 c
   28 Sincludes'vars.cim'
   29 c
   30       real       amadj(ny,36:37)
   31       eonreon/amadj/amadj
   32 c
   33       pedif*bfpe-fqeCyr)}
   36       do 230  1=1,np
   37         if  (swbarrtyr, i) .eq. 1)  go to 230
   38         area5(yr,i}s(epp(yr,i>-beppCyr,i»*epqCyr,i}
   39 c
   40         if  CtidpCi)  .eq. 36) .or.  (idp(i) .eq. 37)) then
   41          atempsO
   42          do  10 j»t,nsubCf)
   43            atemp=atemp+«nadjCyr,fdp(i))*ms< i,j)*(ps(yr,S,j)-beppCyr,i)}
   44 10        continue
   45
            46 c ***** areaS is a gain  here and so is a negative entity *****
   47          area5Cyr,i)=area5(yr,i)+atenp
   48         endif
   49 c
   50 230    continue
   51       return
   52       end

-------
A.4   EXPOSURE AND BENEFITS MODELCALCUIATION METHODS

   This appendix presents details concerning the calculations required for two
aspects of the benefits measurement approach outlined in Volume I of this
Regulatory Impact Analysis.  The first section below reviews the procedures
used  to translate the emissions and related results derived in the IGF (1988)
and Versar (1987) studies of asbestos exposure in occupational and
nonoccupational settings.  The second section provides a step-by-step overview
of the calculations performed by the benefits estimation model.

   A.  EXPOSURECALCULATIONS

   The information provided by the ICF and Versar studies of emissions and
populations exposed are the basic inputs for the health model's calculations.
To derive the direct inputs to the model, however, several additional steps
were  required.  These are outlined below for each major activity giving rise
to asbestos exposures as follows:

   *    Primary manufacturing, both occupational and nonoccupational
   •    Secondary manufacturing, both occupational and nonoccupational
   •    Installation, both occupational and nonoccupational
   •    Use, both occupational and nonoccupational
   •    Disposal or repair, both occupational and nonoccupational

   It must be noted, however, that the "number of people exposed" and the
"million fibers breathed per year" numbers shown for each exposure setting are
correct only for the underlying quantities of each asbestos product, as
reported in the ICF study.  These quantities in turn were based on the latest
information available for each category.  The cost model, on the other hand,
uses  the 1985 quantity for each product category and applies appropriate
growth rates to .arrive at the correct quantity information in the years after
1985, provided such information was available.  In order to make the inputs to
the cost and benefit models consistent, the numbers reported in sections 1, 2,
3, and 5 below are adjusted as described in section 6,   The actual input to
the health benefits model are shown in section 6.

        1-  Exposurefrom Primary Manufacturing

        Emissions from primary and secondary manufacturing were combined for
the dispersion modelling and are all included here under nonoccupational
exposures from primary manufacturing.  ICF's occupational exposure level data
were presented in fibers/cubic centimeter (f/cc).  These estimated exposure
levels represented the arithmetic averages of the many observed occupational
exposure levels for each product assuming compliance with the OSHA 0,2 f/cc
PEL.   To convert f/cc to units of million fibers breathed per year, it was
necessary to multiply exposures measured in f/cc by the volume of air (in
cubic meters) breathed per hour and hours of exposure per year.  For
occupational exposure,  a breathing rate of 1.3 cu m/hour was assumed
        Section 4 reports the data for the nonoccupational exposures from
product use only as there are no occupational exposures for this exposure
setting.  The numbers reported were derived from emissions estimates and
dispersion modelling by Versa" (1988) and are not based on any quantity data
per se, and therefore are not adjusted in section 6.

                                    A,4-1

-------
 (Jennings,  1985).   For  many products,  2000 hours  (8 hours/day x  250 days/year)
 of exposure per year were  assumed (IGF 1988).  However  for products 3, 4, 5,
 6, 11, and  23, exposure durations of 8 hours/day  for only 209, 201, 204, 202,
 202, and  202  days/year  respectively were  assumed  (IGF 1988).  Further
 exceptions  include: product 13,  220 days/year, product  26, 240 days/year, and
 products  30,32, and 33,  200 days/year (IGF 1988).

   'Versar's nonoccupatlonal exposure level data were presented in
 mierograms/cubic meter.  Again,  these estimated exposure levels  represented
 the arithmetic averages of the many estimated nonoccupational exposure levels
 for each  product.   To convert micrograms/cu m to  units  of million fibers
 breathed  per  year  it was necessary first  to convert micrograas/cu m to
 nanograms/cc  by dividing by 1000.   A conversion rate of 30 f/nanogram was then
 used to convert these exposure levels to  f/cc (BSEPA, 1986).  To convert f/cc
 to units  of million fibers breathed per year, the f/ce  were multiplied by
 volume of air breathed  (in cu m)  per hour and hours of  exposure  per year.  A
 breathing rate of  1.1 cu in/hour  was assumed for nonoccupational  exposure
 (Jennings,  1985).   For  all products,  8,760 hours  (24 hours/day x 365
 days/year)  of exposure  per year  were assumed (TJSEPA, 1986).

   Finally, for the mining and milling category,  exposure data* from the ICF
 exposure  assessment (ICF 1988) were combined by summing the populations
 exposed to  each activity,  and calculating a weighted average exposure level
 using the population weights.  The data used to compute the weighted average
 are as follows:
                                                   Mining   Milling


             Population Exposed                      44       111

             Level of Exposure (million  f/yr.)       49       147
   The exposure data underlying the adjustments in section 6 are shown in
Table A.4-1.

        2,  Exposure from,, Secondary Manufacturing

        First, all nonoccupational exposures due to Secondary Manufacturing
are included in the nonoccupational exposures due to Primary Manufacturing, as
discussed above.  Second, the numbers of people exposed from secondary
manufacturing of friction products (products 18-24) in 1985 were estimated
using the 8(a) CBI data for 1981, adjusted for each product by multiplying by
the ratio of production in 1985 to that in 1981.  Furthermore, ICF  (ICF 1988)
assumed the exposure levels from secondary manufacturing to be the  same for
all friction products  (products 18-24).  ICF's exposure level data were
presented in f/cc.  These levels represented the arithmetic average of the
many observed occupational exposure levels for each product assuming
compliance with the OSSA 0,2 f/cc PEL.  To convert f/cc to units of million
fibers breathed per year it was necessary to multiply exposures in f/cc by the


                                    A.4-2

-------
Table A.4-1. Exposure Levels  (in millions  flbars  inhaled p«r year)  and Hunker of Persons
    Exposed to Primary Manufacturing Products for Occupational and Ron-Occupational Settings
                             Occupational

                    No.  of People     MM-.  Fib./Yr
                         •     "C        jasSS;.;-      '
             Honoccupat totnal

No, of People         Mil. Fib./Yr
1,
2,
3.
4.
5.
6.
7.
8,
' 9.
10.
11.
12.
13.
1*.
15.
16.
17.
is.
».
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
3*.
35.
36.
Commercial Paper
Rollboard
Millboard
Pipeline Wrap
Beater-add Gaskets
High-grads Elect. Paper
Booting Pelt
Acetylene Cylinders
Flooring Felt •
Corrugated Paper
Specialty Paper
V/A Floor Tile
Diaphragms
A/C Pipe
A/C Flat Sheat
A/C Corrugated Sheet
A/C Shingles
Drum Brake Linings
Disc: Braka Pads, IMV
Disc Brake Fads, HV
Brake Blocks
Clutch Facings
Auto, fransraiss. Comp.
Friction Materials
Protective Clothing
Thread, yarn etc.
Sheet Gaskets
Asbestos Packings
Roof Coatings
Non-Roofing Coatings
Asb. Reinforced Plastics
Missile iiners
Sealant Taps
Eattary Separators
Arc Chutes
Hintog and Milling


12
27
227
27

162


6

650
7.86
12

11
1.115
ais
14
232
239
1
187

78
163
5
438
497
138
380
134
207
2
155


145
134
110
113




111

87
270
478

473
385
390
385
377
406
113
398

457
208
198
273
220
164
220
220


121


5,747,875
4,847,937
35,897,272
254,772






19,744,593
3,313,602
4,847,937

891,143
24,605,781
21,421,488
1,396,558
8,034,916
8,761,571

12,628,656

16,306,866
42,550,071
5,659,488
63,673,717
59,487,018
17,504,019




841,214


0,0232
0.0476
0.0373
0,405






0.00000185
0.167
0.0218

0.00361
0.0575
0.0214
0.000000827
0.00388
0.0027

0.00234

0.00214
0.00561
0.0000534
0.00233
0.0000394
0.0018




0.407

-------
volume of air  (in cu m) breathed per hour and hours of exposure per year.  A-
breathing rate of 1.3 cu m/hour was assumed  (Jennings, 1985),  For all
products 2000 hours (8 hours/day x 250 days/year) of exposure per'year were
assumed (ICF 1988),    The exposure data underlying the adjustments in section
6 are shown in Table A.4-2.

        3.  Exposure from Installation

        Most of the nonoccupational data were derived from emissions estimates
by ICF Incorporated (ICF 1988) and dispersion modelling by Versar (Versar
1988).  These exposures occur as a result of releases of asbestos to the air
during occupational installation of asbestos products used in construction.
These included products 7, 14, 15, 16, and 17.  Consumer installation exposure
exists for product 29 only, as estimated by Versar (Versar 1987).  For
occupational exposures, ICF data were presented in f/cc.   The levels
represented the arithmetic average of the many observed occupational exposure
levels for each product assuming compliance with the OSHA 0.2 PEL.   fo convert
f/cc to units of millions of fibers breathed per year, it was necessary to
multiply exposures in f/cc by the volume of air breathed (in cu m)  per hour
and hours of exposure per year, hence a breathing rate of 1,3 cu m/hour was
assumed (Jennings, 1985).  For all products, although exposures were typically
less than 8 hours/day, a 2000 hour (8 hours/day x 250 days/year) annual
exposure was assumed for all the exposed population, since the number of
people exposed were estimated as number of full-time-equivalent employees (ICF
1988).

   For ambient exposures to asbestos from construction activities,  Versar
(1988) provided only estimates for total population exposed from installation
and repair and did not allocate the exposed population to the primary products
and exposure categories.  Versar's estimated total number of people exposed
from occupational construction activities was assumed to be equal to the
number exposed from each of the products separately for modeling purposes.

   For consumer installation of product 29, spray roof coatings, such coatings
were assumed to be applied every 4 years (the mid-point of Versar estimate of
3-5 years) by a total of 841,000 persons (Versar 1987).  Thus the number of
persons exposed per year in this category was assumed to be 210,250
(841,000/4).

   For ambient occupational exposures in construction activities, Versar
(1988) provided only estimates for total exposures from installation and
repair.  To allocate these exposures to the primary products by exposure
category,  these total exposure levels were divided according to the proportion
of emissions from each individual product and exposure category as estimated
by ICF (ICF 1988, Exhibits 42-46).

   For ambient exposures to occupational construction activities, Versar's
exposure level data were presented in microgram/cu m.  These levels
represented the arithmetic average of the many estimated ambient exposures for
each product.   To convert microgram/cu m to units of millions fibers breathed
per year It was necessary first to convert micrograms/cu m to f/cc and then
multiply by volume of air breathed (in cu m) per hour and hours of exposure
per year.   Micrograms/cu m was converted first to nanograms/ce by dividing by
1000.  A conversion rate of 30 fibers/nanogram was used to convert these
exposure levels to f/cc (USEPA, 1986).  A breathing rate of 1.1 cu m/hour was

                                    A.4-4

-------
        Table A.4-2.  Exposure Levels (in millions  fibers inhaled per year)  and Honisar of Persona
        Exposed to Secondary Manufacturing Products for Occupational and Non-Geeopational Settings
                                    Occupational                            Konoceupational

                           No. of People     Mil. Flb./fr      Ho. of People         Mil.  Fib./Yr
 1.  Coronercial Paper
 2.  Bollboard
 3.  Millboard                  448                57
 ft.  Pipeline Wrap
 5.  Beater-add Gaskets       1,264                57
 6,  Bigh-grada Elect. Paper     20                57
 7.  Roofing Felt
 8.,  Acetylene Cylinders
 9.  Flooring Felt
10.  Corrugated Paper
11.  Specialty Paper            145                57
12.  V/A Floor Tile
13.  Diaphragms
14.  A/C Pipe
15.  A/C Flat Sheet
16.  A/C Corrugated Sheet
17.  A/C Shingles
18.  Drum Brake Linings       1,937               125
19.  Disc Brake Pads, 1MV       267               146
20.  DisC Braku Pads, H?
21.  Brake Blocks                16               127
22.  Clutch Facings              48               166
23.  Auto Transmiss. Corap.
24.  Friction Materials          27               195
25.  Protective Clothing
26.  Thread, yarn etc.          208               408
27.  Sheet Gaskets              878               276
28.  Asbestos Packings           25               276
29.  Roof Coatings
30.  Son-Roofing Coatings
31.  Asb. Reinforced Plastics   456               239
32.  Missile Liners
33.  Sealant Tape
34.  Battery Separators
35.  Arc Chutes
36.  Mining and Milling

-------
 assumed (Jennings,  1985).   For  all  ambient  exposures  8,760  (  24 hours/day x
 365  days per year)  hours  of exposure per year were  assumed  (USEPA,  1986).

   For  exposures  from consumer  installation of product  29,  an annual exposure
 duration of 4 hours ( 4 hours/day x I  day/year) was assumed.   The estimated
 mean exposure level for product 29  was 0.2  f/cc which was the mean  exposure
 level from consumer installation from  the three studies cited by Versar
 (1987).  The exposure data  underlying  the adjustments in section 6  are shown
 in Table A.4-3.

        4.  Exposure frpmJJse

        Nonoccupational exposures from product use  were derived from emissions
 estimates and dispersion  modelling  by  Versar (1988).  Versar  presented an
 estimate of the average national ambient air asbestos concentration
 attributable to brake use in 1985 of 0.039  ng/cu m  for  the  226,546,000 people
 in the  U.S.  These  exposures were assigned  among the  four brake products, drum
 brakes  for light  and medium vehicle, disc pads for  light and  medium vehicles,
 disc  pads for heavy vehicles, and brake blocks for  heavy vehicles,  as follows:

   Versar estimated that  in'1985:

        •    Cars accounted for 31  percent  of asbestos  emissions;

        «    Light  trucks accounted for 15  percent  of asbestos
             emissions; and

        •    Heavy  trucks accounted for 54  percent  of asbestos
             emissions.

   The  national exposure  level, 0.039  ng/cu m, can  be subdivided using these
 percentages to cars, 0.012  ng/cu m  (0.31 x  0.039),  light trucks,
 0.0058  ng/cu m (0.15 x 0.039),  and  heavy trucks, 0.021  ng/cu  m (0.54 x 0.039).
 Car brakes were assumed to  be 55 percent disc brakes  and 45 percent drum
brakes  (See Appendix A.I).   Emissions  from  brakes were  estimated to be in the
 ratio 1.1 ; 1.0 for disc  ;  drum brakes (Letter from Lynn Delpire to Jo
Mauskopf dated June  17, 1987),  and  thus the .012 ng/cu  m was  assigned to
products 18 and 19  as 0.0052 ng/cu  m and 0.0070 ng/cu m respectively.  ICF
 estimates that light trucks have 50 percent drum brakes and 50 percent disc
brakes  (See Appendix A-l),  and  thus 0.0027  ng/cu m was  assigned to product 18
 for light trucks and 0.0030  ng/cu m was assigned to product 19, accounting for
 the 1.1 : 1.0 emission ratio described above.  Versar assumed that heavy
 trucks  have drum brakes only, and thus 0.021 ng/cu m  was assigned to product
 21.  The total U.S. population was  assumed  to be exposed to emissions from
each  of the four friction products.

   The  ambient exposure data from emissions  from use  of brakes was  further
adjusted for the benefits analysis.  The exposure levels derived above were
attributable to emissions of all brakes being used  in 1985.   For the benefits
analysis exposure data set,   estimates  of exposures  attributable to the first
year of exposure of brakes manufactured during 1985 were needed.  ICF assumed
a brake lifetime of 4 years  for drum brakes  and disc  pads for  light and medium
vehicles, and a decline in production  of approximately  0,9 percent per year
since 1981 for drum brakes  and  8.6  percent per year for disc pads.1  Thus,
approximately 0.247 x (0.0052 + 0.0027) - 0.0020 ng/cu m can.be assigned to

                                    A.4-6

-------
Table A.4-3. Exposure Levels {in millions fibers inhaled per year) and Runfcer of Parsons
     Exposed to Installation of  Products  toe Occupational  and Hon-Ooctspational Settings
                            Occupational

                   Ho. of People     Mil. Fib./fr
                         Nonoecupatlonal

             Ho. of People         Mil. Fib./Xr
 1.  CociBerciai Paper
 2.  Rollboard
 3.  Millboard
 4.  Pipeline Wrap
 5.  Beater-add Gaskets
 6.  High~sra
-------
 product 18 for drum brakes manufactured In 1985 and 0.217 x (0.0070 + 0,0030)
 - 0,0022 ng/cu IB to product 19 for disc brakes manufactured in 1985 where  the
 factors 0.247 and 0,217 were derived as follows:

       If "N" is the number of drum brakes installed in 1982,  the total number
 of drum brakes on the road in 1985, assuming a decline in production each  year
 of 0.9 percent and brake life of 4 years, is given by;

              (N + 0.991 x N 4- 0.991 x 0.991 x N + 0.991 x 0.991
              x 0.991 x N) - 3.946 x N

    The proportion of the drum brakes on the road in 1985 that were
 manufactured in 1985 is thus assumed to be approximately given by;.

              (0.991 x 0.991 x 0.991 x N)/3.946 x N  - 0.247

    Similarly for disc pads,  the total number on the road in 1985, assuming a
 decline in production each year of 8.6 percent and brake life of 4  years,  is
 given by:

 •'             (N + 0.914 x N + 0.914 x 0.914 x N + 0.914
            x 0.914 x 0.914 x N)  - 3.513 x N

    The proportion of the disc brakes on the road in 1985 that were
 manufactured in 1985 is thus assumed to be approximately given by:

              (0.914 x 0.914 x 0.914 x N )/3.513 x N - 0.217

    Finally,  no exposures from use were assigned to product 20,  and
 0.021 ng/cu m were assigned to product 21 (since brake blocks are assumed  to
 have  an average life of only half a year,  all brake blocks were assumed to be
 used  in the year of manufacture).   The exposure data used for the health
 benefits analysis are shown in Table A.4-4.

         5.   Exposure from Repair/Disposal

         Some of the nonoccupational data for estimating exposures in
 repair/disposal were derived from emissions  estimates by ICF  (1988)  and
 dispersion modelling by "Versar (1988).   Other data were derived from
 nonoccupational exposure data compiled by Versar (1987),   ICF estimated
 exposures  from automotive rebuilding for all friction products  together.   The
 total population exposed in  automotive rebuilding was the  number estimated fay
 OSHA  (1986).   This population was  divided among the individual  friction
 products (products 18-24)  in the  same  proportion as those  exposed in secondary
 manufacturing of. these  products  in 1985.

   Occupational population exposure estimates for brake repair  for brakes
 manufactured during 1985  were  estimated using the ICF estimates  for  sales  of
 replacement  brakes for  1989  (Appendix  A.I).   The sales  of  replacement brakes
 for consumer repair were  netted out of these total sales estimates and  then
 the full-time-equivalent employees  required  to install  the remaining brakes
were  estimated.   The IGF estimate  for  total  replacement brakes  sales in 1989
 is 136,045,000  for drum brakes  (product  18)  and 96,273,000 for  disc  brakes
 (product 19).   The total  occupationally-exposed population for brake repair
was estimated by adding together  the exposed population estimates for

                                    A.4-8

-------
        Table A.4-4.  Exposure Levols (in millions fibers inhaled par year)  and Number of Persons
                 Exposed to Use of Products for Occupational and Non-Occupational Settings
                                    Occupational                            Honoccupational

                           Ho. of People     Mil. Fib./Yr      Ho. of People         Mil.  Fib./Yr


 1.  Coranaxeial Paper
 2.  RolUsoard
 3.  Millboard
 4.  Pipeline Wrap
 5.  Beater-add Gaskets
 6.  High-grade Elect. Paper
 7.  Booting Felt
 8.  Ao«tyl«n» Cylinders
 9.  Flooring Pelt
10.  Corrugated Paper
11.  Specialty Paper
12.  V/A Floor Tile
13.  Diaphragms
14.  A/C Pip«
15.  A/C Flat Sheet
16.  A/C Corrugated Sheet
17.  A/C Shingles
18,  Dram Brake Linings                                         226,546,000               0.00058
19.  Disc Brake Fads, IMT                                       226,546,000               0.00064
20.  Disc Brake Pads, m
21.  Brake Blocks                                               226,546,000                0.0061
22.  Clutch Facings
23.  Auto. Iransmtss. Coinp.
24.  Friction Materials
23.  Protective Clothing
26.  Thread, yarn ate.
27.  Sheet Gaskets
28.  Asbestos Packings
29.  Roof Coatings
30.  Non-Roofing Coatings
31.  A»b. Reinforced Plastics
32.  Missile Liners
33.  Sealant Tape
34.  Battery Separators
35.  Arc Chutss
36.  Mining and Milling

-------
automotive rebuilding  and  repair  for  each of the  friction products.

   ICF estimated the exposures  from automotive rebuilding for all friction
products together  (ICF 1988).   The exposure levels were assumed to be the same
for each product.  The exposure levels during occupational brake repair and
rebuilding were derived from the  estimates in the ICF asbestos exposure
assessment by converting the f/cc estimate to million fibers/year.  For this
conversion breathing rates of 1.3 cu  m/hour (Jennings, 1985) and annual
exposures of 2000 hours (8 hours/day  x 250 days/year) (ICF, 1988) were
assumed.

   The exposures from  automotive  rebuilding by primary friction product were
combined with those from occupational brake repair in the exposure data set by
summing the populations exposed to each activity, and calculating a weighted
average exposure level using population weights.  The data used for
occupational exposure  from repair for products 18, 19, and 21 are as follows:
                                             Occupational   Automotive
                                             Brake Repair   Rebuilding
        Population Exposed
             18                                71,395          4,009
             19                                38,890            551
             20                                   117              0
             21                                 3,832             33

        Level of exposure (millions f/yr.)
             18                                   390            133
             19           ,                        390            130
             20                                   390              0
             21                                   390            133
    For ambient nonoccupational exposure from occupational brake repair or
construction removal activities, Versar provided only total population
estimates and did not allocate the population exposed to the primary products
(Versar 1988).  In both cases, Versar's total number of people exposed from
occupational brake repair or construction removal activities was assumed to be
the same as the number exposed from each of the products separately.

    The nonoccupational population exposed estimates from consumer brake
repair for the brakes manufactured during 1985 were derived from survey data
for 1981 (Versar 1987).  The survey indicated that 9,132,000-people actually
purchased brakes and a further 4,054,000 people who were members of the
purchaser's household helped to install them. • The number of people doing home
brake jobs was assumed to remain constant over time and each brake job was
assumed to consist of changing 4 disc pads and 4 brake drums, although the
proportion of those jobs that used asbestos brakes was assumed to change over
time as the population of asbestos brakes declines.
                                    A.4-10

-------
     The number of  consumers  exposed while  changing asbestos brakes  in  1985 was
 therefore computed as,  12,922,280  (13,186,000  x 0.98)  for brake drums  (product
 18)  and 8,570,900  (13,186,000 x  0.65)  for  disc pads (product  19).   The factors
 0.98 and 0.65 were obtained  from Tables  11 and 12  of Appendix A.I and  are the
 ratios of asbestos brakes  to total brake sales for 1989  for drum and disc
 brakes respectively.  The  total  number of  asbestos brake drums and  disc pads
 installed by consumers  in  1989 (as they  repair brakes  manufactured  during
 1985) was calculated as 35,797,440 (0.98 x 9,132,000 x 4) and 23,743,200 (0.65
 x  9,132,000 x 4) respectively.

     The total nonoccupational exposed  population from  brake repair  is
 estimated by adding together the estimates of  the  exposed population from
 ambient exposure from occupational brake repair and consumer  installation of
 brakes.

     For ambient nonoccupational  exposure from  occupational brake repair or
 removal of construction products Versar  provided only  total exposure estimates
 and  did not allocate the exposures from  repair to  the  individual construction
 or friction products.   These exposure  levels were  divided between the
 individual friction or  construction products according to the proportion of
 emissions from the specific  products as  estimated  by IGF (1988, Tables 42-
 46).

     The ambient exposure estimates were  presented  by Versar in micrograms per
 cubic meter.  In order  to  convert them to  units of million fibers per  year the
 unit were first converted  to nanograms/cc  by dividing  by 1000.  These
 exposures were converted to  f/cc by multiplying by a 30  f/nanogram  conversion
 factor (USEPA, 1986).   To  convert f/cc to  million  fibers per  year a breathing
 rate of 1.1 cu m/hour (Jennings, 1985) and an  annual exposure duration of
 8,760 hours (24 hours/day  x  365  days/year)  (USEPA,  1986) were assumed.

     The exposure level  during nonoccupational  brake repair was derived from
 the  estimates in the Versar  nonoccupational exposure assessment (Versar 1987)
 as follows;  Versar assumed  that 39 percent of consumer  brake repairs  were
 done in a garage and the remaining 61  percent  outdoors.  For  those  jobs done
 outdoors,  exposure was  estimated to be at  0.71 f/cc for  .3 hours for one day
with a breathing rate of 1.3 cu  m /hour.   Thus,  0.28 (0.71 x  0.3 x  1.3)
million fibers will be  breathed  during the year for each consumer changing
brakes outside.  For those jobs  done in  a  garage,  consumers were assumed to be
 exposed for 0.3 hours to 0.71 f/cc and then for a  further 2.4 hours at 0.035
 f/cc.  Thus, 0.39  ((0.71 x 0.3 x l,3)-f-(0.035 x 2.4  x 1.3)) million  fibers will
be breathed during  the  year  by each consumer changing  brakes  in a garage.  The
weighted average exposure  level  for all  consumers  changing brakes is,
consequently, 0.32  ((0.39 x  0.39) + (0.61  x 0.28))  million fibers per  year.
 Since consumers were assumed to  change an  equal number of drum and  disc brakes
 and  the exposures  from  changing  these  brakes were  assumed to  be approximately
 the  same,  the weighted  average exposure  level  of 0.32  million fibers/year was
divided equally between products 18 and  19.

    The nonoccupational  exposures from releases  from occupational brake repair
were combined with those from consumer brake repair in the exposure data set
by summing the populations exposed to  each activity, and calculating a
weighted average exposure level  using  population weights.  The data used for
products 18 and 19 are  as follows:
                                    A.4-11

-------
                                              Occupational      Consumer
                                              Brake Repair    Brake Repair
         Population Exposed
              18                               170,871,494      12,922,280
              19                               170,871,494       8,570,900

         Level of exposure (millions  f/yr.)
              18                                   0.00006           0.16
              19                                   0.00003           0.16
    The exposure  data underlying  the adjustments  in  section 6 are shown in
Table A.4-5.                  '  -

        6.  Adiustment of Exposure Data

    The "number of people exposed" and the  "million  fibers breathed per year"
numbers shown for each exposure setting  in  the previous sections are correct
only for the underlying quantities of each  asbestos  product, as reported in
the IGF (1988') study.  These quantities  were based on the latest information
available for each category, but  the ARCM (the cost  model), on the other hand,
uses the 1985 quantity for each product  category  and applies appropriate
growth rates to arrive at the correct quantity information In the years after
1985, provided such information was available.  In order to make the inputs to
the cost and benefit models consistent,  the numbers  reported in the previous
sections are adjusted as described in this  section.

    The set of exposure information in the  ICF (1988) study (also referred to
as the AEA in the tables) was "adjusted" by the ratio of the actual 1985
quantity to the quantity used in  the ICF study because the ICF study had used
the latest available quantity information.   This allows the ARCM to generate
its baseline from 1985 to 2000 taking into account plant closings and other
post-1985 information and thereby reduce the associated exposures/populations
appropriately.

    The exposure  assessment quantity information  is  listed by exposure
setting,•e.g., primary manufacturing, installation,  etc.  Cases in which the
ICF study's quantity or exposure  information have been revised are noted by
footnotes which provide explanations for each change.  Table A.4-6 shows the
"adjustment" factors for the relevant exposure settings, Tables A.4-7 and
A.4-8 show the "adjusted" population (number of people exposed) or the
exposure level (million fibers breathed per year) for occupational and
nonoccupational exposures respectively,*
        The "Use of Products" category has only nonoccupational exposure data
for products 18, 19, and 21.  These data were based on Versar's report and
remain unchanged.

                                    A.4-12

-------
Table A.4-5. Exposure tevals (in millions fiber* inhaled per year) an<3 Nunfcer of Persons
  Exposed to Repair/Disposal of Products for Occupational and Non-Occupational Settings
                            Occupational

                   No, of People     Mil. Fib,/Yr
             Honoceupational

Ho. of People         Mil. Pib./Yr
1.
2.
3.
4,
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
CoaiBsreial Paper
Rollboard
Millboard
Pipeline Wrap
Beater-add Gaskets
High-grade Elect. Paper
Roofing Felt 263
Acetylene Cylinders
Flooring Fait
Corrugated Paper
Specialty Paper
V/A Floor file
Diaphragms
A/C Pipo
A/C Flat Sheet 20
A/C Corrugated Sheet 9
A/C Shingles 164
Drum Brake Linings 75,404
Disc Brake Pads, UMV 39,441
Disc Brake Pads, HV 117
Brake Blocks 3,865
Clutch Facitiga 100
Auto. Transmiss. Coinp.
Friction Materials . 57
Protective Clothing
fhread, yaan etc.
Sheet Gaskets
Asbestos Packings
Roof Coatings
Non-Roofing Coatings
Asb. Reinforced Plastics
Missile Liners
Sealant Tape
Battery Separators
Arc Chutes
Mining and Milling


296 171,136,373 0.0000067







2,080 171,136,373 0.0000057
2,080 171,136,373 0.0000025
244 171,136,373 0.0000049
376 183,793,774 0.0113
386 179,442,394 0.00767
390 170,871,494 0.000000587
388 170,871,494 0.0000169
125

120













-------
                                                                 fable A.4-6.  Adjustment factors for Exposed Populations and ixposure Levels
Product Category
                            Units
  Primary
 Quantity
used in AEA

Commercial Paper                   Tons                  0          00
Rollboard                          Tons                  0          0.0
Millboard                          Tons                581         157.3
Pipeline Wrap                      Squares         296,949 g/        0,0
Beater-add Caskets                 Tons             15,940 b/    4  869.6
High-grade ftectrical Paper        Tons                698        '  17 6
Roofing Felt                       Tons                  0          olfl
Acetylene Cylinders                Pieces          308,121          0.0
Flooring Felt                      Tons                  0          0.0
Corrugated Paper                   Tons                  0          0.0
Specialty Papers                   Tons                434         587.0
Vinyl-Asbestos Floor Tile          Sq. Yards             0          0,0
Asbestos Biaphragms                Pieces         -   9,770 c/        0.0
Asbestos-Cement Pipe               Feet         15,062,708 d/        0.0
Flat A-C Sheets                    Squares           5,165          0.0
Corrugated A-C Sheets              Squares               0          0.0
A-C Shingles                       Squares         176,643          0.0
Drum Brake Linings 
                                                                            n/i,
                                                                            "/*
                                                                    9«»
                                                                    9,612,6550
                                                                        ,   M*
                                                                        4,667.0
                                                                            "/•
                                                                            «/•
                                                                            «/»
a/»
0.0
0.0
                                             .
                                              1S6.BZO.O
                                            4,570,266.0
                                                    «*•
                                                    rtf.
                                                    "/«
                                                    n/«
                                                    "/*
                                                    «*«
                                                    "/«
           156,820
         4,570266
         7,237,112
           585,500
        5>,&«,g5
            4,835
            4,667
      423.048.5J9
            2.M6
                                                                                                                     n/a
                                                                                                                  is
1.0000
1.0100
1.1200
1.0000
1.0000
1.0300
1.0000
1.0000
1. 0000
1.0000
    156820.0
  4,615968.7
  8105565.4
    585 500.0
   ..
  9612655.0
      4,980.1
      4,667.0
423,048539.0
      2,046,0
        9BO.O
                                                                                                        -
                                                                                                      ,J;?
   d/
   d/
   d/
   /a
1  0000
 n/a
 n/I
 n/8
                                                                                   1.0200
                                                                                   1.0000
                                                                                   1.0000
                                                                                    n/a
                                                                                    n/a

                                                                                                                                                                                                      :
n/a
n/I
n/S
n/l
n>a
n/a
                           a/  The AiA reported 276,949 tons but population Mas actually based on 296,949 tons.

                           b/  16,505 tons are reported in the A6A,  but  only  15,940 were used to estimate population in the AEA.

                           c/  The AEA calculated the exposed populetion ba»«d on *. chlorin* capacity (usina asbestos diaphraspsj of 9,295,000 Metric ton* In 1985.  Since the ARCH uses
                               P*"0*^'0" wJujet, the utiltiation rate  of  TTH is used to calculate the actual production of chlorine in 1985.  However,  this does not affect the existing
                           d/  The 216,903 tons used in the AEA  were converted using a conversion factor of .0144 tons/foot.

                           e/  Population exposed due to secondary manufacturing is calculated by applying the primary population correction factor to the existing secondary populations
                               {See text for explanation.)                                                                                                                 ^*^

                           f/  Exposed population for Asbestos Packfnjs was recalculated entirely -- the existing exposed population associated with the output of 1 ton in
                               primary manufacturing is 3 for occupational and 3,601,492 for oonoccupatioroil.

                           g/  Production eject tries as some companies Mere reclassified ma producer* of Specialty Papers.  However, population still increases  fro* 20 to 30 because the
                               companies 'included now had stopped  processing asbestos after 1985.

-------
                             Table A.4-7.   Adjusted Exposed Populations  (Occupational)

1.
2.
3,
4.
5.
6.
i"
9.
10.
11.
12.
13.
14.
15,
16.
17.
18.
19.
20.
21.
22.
23.
24.
2S.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
Product Category — >

Counereial Paper
Rot I board
Killbosrd
Pipeline Wrap
Beater-add Gaskets
High-grade Electrical Paper
Roofing Felt
Acetylene Cyl inders
Flooring Felt
Corrugated Paper
Specialty Papers
Vinyl -Asbestos Floor Tile
Asbestos Diaphragms
Asbestos- Ceffient Pipe
Flat A-C Sheets
Corrugated A-C Sheets
A-C Shingles
Drum Broke Linings (IHV)
Disc Irake Pads UWV)
Disc Brake Pads (HV)
Srake Slocks
Clutch Facings
Automatic Transmission Confsonents
Friction Haterlals
Asbestos Protective Clothing
Asbestos Thread, Tarn, etc.
Asbestos Sheet Gasket ing
Asbestos Packing
toof Coat trigs and Cements
Kon-Roofins Coatings, etc.
Asbestos-Reinforced Plastics
Hissile Liner
Sealant Tape
Battery Separators
Arc Chutes
Primary Population
Existing Adjusted
12
35
227
2?
162


2
650
286
12

11
1,115
815
14
232
239
1
187
78
163
3
438
467
138
380
134
207
2
12
35 a/
235
27
206


2 b/
650
236
53

11
1,565
916
15
283
239
11
191
78
167
9 c/
582
553 d/
157
- 380
134
207
2
Secondary Population Installation Population »ep»ir t Disposal
Existing Adjusted Existing Adjusted
448
1,264
20



145




1,937
267
16
48

27
208
878
25


456




448
1 296
30 «/
,396 396


149

921 933
16 49
7 7
236 323
2,719 If
300 f/
19 «/
48 f/

28 f/
208
885
25


529




Existing



263






n
9
164
75,404
39,441
117
3,865
4 Art
tuu
57









Population
Adjusted



263






61
225
06,398 g/
32,568 g/
117 g/
3,935 g/
73 9/
43 V









»/  Revision of calculation ef existing exposed population in the AEA — population should be 35 instead of 27.
b/  Revision of calculation of existing exposed population in the Al* Cresrtsed Product Asbestos Coefficient used) -
    population should be 2 instead of 6.
c/  Exposed population for Asbestos Packings was recalculated entirely -- the existing exposed
    population associated with the output of 1 ton Is 3.
«/  Revision of calculation of existing exposed population in the AEA -- should be 467 instend of 497.
e/  Production declines as some con-panics Here rectassified as producers of Specialty Papers.  Heuever, population
    still increases from 20 to 30 because the conpanies Included now had stopped processing asbestos after 1985.
f/  Population exposed due to secondary manufacturing it calculated by applying the primary copulation correction
    factor to the existing secondary populations,  (See text for explanation.)
§/  Rebuilding is included in repair and disposal for existing and corrected populations.

-------
              table A.4-8.  Adjusted Exposed Populations ant Exposures (Nonoccupational)  a/


1.
2,
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.

Product Category

Commercial Paper
Rollboard
Millboard
Pipeline Wrap
Bester-sdd Caskets
High-grade Electrical Paper
Roofing Felt
Acetylene Cylinders
Flooring Felt
Corrugated Paper
Specialty Papers
Vinyl -Asbestos Floor Tile
Asbestos Diaphragms
Asbestos- Ceraent Pipe
Flat A-C Sheets
Corrugated A-C Sheets
A-C Sfcingles
Orun Brake Linings (LW)
Btsc Brake Pads |IHV)
Disc Brake Pads (Hv>
Brake Blocks
Clutch Facings
Automatic Transmission Components
friction Materials
Asbestos Protective Clothing
Asbestos Thread, Tarn, etc.
Asbestos Sheet Gasket ing
Asbestos Packing
8oof Coatings and Ceffients
lion-Roofing Coatings, etc.
Asbestos-Reinforced Plastics
Kfssile liner
Sealant Tape
Battery Separators
Are Chutes

Primary Population Secondary Population Installation Exposure Repair * Disposal Exposure
Existing


5,747,875
4,847,937
35,897,272
254,772





19,744,593
3,313,602
4,847,937
891,143
24,605,781
21,421,488
1,596,558
8,034,916
8,761,57!

12,628,656

16,306,866
42,550,071
3,601,492
63,673,717
59,487,018
17,504,019




a/ A! 1 exposures
Adjusted ExNting Adjusted Existing Adjusted Existing


5,74T,875
4,847,937 ;
37,082,888 b/
254,772
0.000018 0.000018 0.0000067




19,744,593
3,313,602 0.0000261 0.0000264
21,232,368 0,00000098 0.00000298 9 0000057
0.0000004J 0.00000043 0.0000025
891,143 0.0000038 0.0000052 0 0000049
34,542,107 o om
24,065,022 0.00767
1,704,883 0.000000587
».».«* 0.0000169
'
12,922,247

16,306,866
43,468,616 b/
7,031,484 b/ c/
84,570,429 1.04 1.04 41
?0,389,388
19,925,386 b/




are Million fibers breathed per year.
Adjusted






0.0000067





0.0000173
0.0000025
0.0000067
0.0123
0.00624
0,009000587
0.0000171














b/ the correction factor used f» for this population Is the sun of the actual 1985 primary and secondary
    quantities divided by the SUB of th* primary and secondary quantities  reported in the AE*.   This  is done
    because the existing primary population includes the existing secondary population.

cf  Exposed population for Asbestos Packings Here recalculated entirely -••  the existing exposed
    population associated with the output of 1  ton is 3,601,492.

d/  8ased on Versar's estimates {Nonoccupational Exposures,  June  17,  1987}.

-------
    The major revisions to get  the adjusted exposure  input numbers are;

    *   Asbgs.tps Diaphragms  (13): • The exposed population in the  ICF
        (1988) study is calculated based on chlorine  production capacity
        (using asbestos diaphragms) of 9,295,000 metric  tons in 1985.
        Since the ARGM uses  actual production volumes, the average
        capacity utilization rate of 77 percent (based on the Use and
        Substitutes Analysis, Appendix F)  is used to  calculate the volume
        of chlorine actually produced in 1985.  However,  the exposed
        population remains unchanged since the discrepancy resulted from
        two different methods for "indexing" the exposures,  not underlying
        differences in exposure itself.

    *   Factors for Revising..Exposure Data:  The ratio of the relevant
        1985 quantity, i.e., domestic production for  primary manufacturing
        and the sum of domestic production and imports for the other
        categories,  was used to adjust the exposure  data except  as noted
        in footnotes to Tables A.4-6 through A.4-8.   Furthermore, since
        the exposed nonoccupational population due to secondary
        manufacturing is included in the exposed nonoccupational
        population due to primary manufacturing, the-  adjustment factor
        used is the ratio of the sum of the 1985 primary and secondary
        quantities to the sum of the primary and secondary quantities used
        in the ICF study.

    *   Adj us tments__ t_o_. JExpo sur e	Data, ( Population, v-& •  Expo sure):  All the
        adjustment factors are applied to the ICF study's populations to
        get the adjusted exposure information.  The exceptions to this are
        the adjustments to nonoccupational exposure data for installation
        and repair & disposal categories.  The exposed populations for
        these two categories are assumed not to change since the  exposures
        are not-site-specific (unlike the other occupational and
        nonoccupational populations).  Instead, the level of exposure,
        i.e., fibers per year,  is assumed to change in relation to the
        change in quantity.  Therefore, for these categories, it  is the
        exposure levels that are adjusted.

    •   Adjustments for:i:i:Jmports:  In most cases, the  adjustment factor for
        exposure for installation and repair/disposal categories  is the
        consumption-production ratio for the product  because the  ICF
        (1988) study did not typically count imports  in  calculating
        exposed populations  or exposure levels in these  categories.
        Instead these calculations were based on domestic production only.
     •^  The factors used for correcting exposure data associated with
secondary manufacturing are based on the sum of domestic and  imported mixtures
processed by secondaTy^-KocessoTS.  The exception to this are "friction
products" (products 18-24), for which the primary manufacturing factor is 'used
to correct the existing exposed populations.  This is done because  the ICF
(1988) study used the ratio of primary processor quantities in 1985 and 1981
to calculate the 1985 populations associated with secondary manufacturing
based on the relevant 1981 populations.  The number of non-respondent
secondary processors in 1985 for these products made it impractical to assess
the exposed population directly.

                                    A.4-17

-------
    Adjustment for Drum__Bra.kejLlnings  and  Disc

    After the appropriate  adjustments  were made  to  the  exposure data,  in order
to ensure consistency  across the  cost  and  benefits  models,  the data for drum
brake linings and disc brake pads for  light motor vehicles  were further
adjusted to distinguish between OEM  and aftermarket use.  The exposure data
was adjusted as follows:

        •  The exposed populations for all exposure settings, except
           occupational repair and disposal, were split between OEM
           and aftermarket use based on the quantity split  in 1985 as
           reported in the Use and Substitutes Analysis (Appendix F)
           -'- 129,042,572  pieces  of  drum brake linings  were split into
           34,713,675  pieces for  OEM use and 94,328,903 pieces for*
           aftermarket use; 65,869,172 pieces of disc brake pads (IH?)
           were split  into 10,077,464  for  OEM use and 55,791,708 for
           aftermarket use.  For  example,  occupational  population
           exposed due to  primary manufacturing  of  drum brake linings
           was estimated to be 1,565 persons and was split  into 421
           (1,565 * 34,713,675 /  129,042,572) for OEM use and 1,144
           (1,565 * 94,328,903' /  129,042,572) for aftermarket use,

        •  The exposure levels were  kept the same for both  OEM and
           aftermarket use for all exposure settings, except
           occupational repair &  disposal, since the populations were
           changed as  described above.

        •  The total exposed occupational  population due to repair &
           disposal of drum brake linings  and disc  brake pads (UMV)
           was attributed  to aftermarket use.

    Tables A.4-9 through A,4-13 show the actual  inputs  to the benefits model
for the five exposure  settings (primary manufacturing,  secondary
manufacturing, installation, use,  and  repair &disposal).  The data for OEM and
aftermarket use of drum brake linings  appears as data for products 18 and 36
respectively, and as products 19  and 37 for the  OEM and aftermarket use of
disc'brake pads (LMV).
                                    A.4-18

-------
Table A.4-9. Exposure Levels (in millions fibers inhaled per year) and Number of Persons
   Exposed  to  Primary Manufacturing Products for Occupational and Non-Occupational Settings
                            Occupational

                   No. of People     Mil. Fib./?r
             Konoocupational

Ho. of Faopla         Mil. Fi
1.
2,
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23,
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
3*.
35.
36.
37.
38.
CouKiercial Papar
Rollboard
Millboard
Pipelina Wrap
Beater-add Gaskets
High-grade Elect. Paper
Roofing Felt
Acetylene Cylinders
Flooring Felt
Corrugatad Paper
Specialty Paper
V/A Floor Tile
Diaphragms
A/C Pipe
A/C Flat Sh«»t
A/C Corrugated Sheat
A/C Shingles
Drum Brake Linings (DIM)
Disc Brake Pads, UW {OEM)
Disc Braka Fads, HV
Brake Blocks
Clutch Facings
Auto, Iransmiss , Comp.
Friction Materials
Protective Clothing
Thread, yarn etc.
Sheet Gaskets
Asbestos Packings
Roof Coatings
How-Hoofing Coatings
Asb. Reinforced Plastics
Hiesile Liners
Sealant Tnpe
Battery Separators
Arc Chutes
Drum Braise Linings (A/M)
Disc Brake Pads, LMV (A/M)
Mining and Milling


12
35
235
27

206


2

650
286
53

11
421
140
15
283
239
11
191

78
167
9
582
553
157
380
134
207
2
1,144
776
155


145
134
110
113




111

87
270
478

473
385
390
385
377
406
113
398

457
208
198
273
220
164
220
220


385
390
121


5,747,875
4,847,937
37,082,888
254,772
-





19,744,593
3,313,602
21,232,368

891,143
9,292,154
3,681,659
1,704.883
9,785,424
8,761,571

12,922,247

16,306,866
43,468,616
7,031,484
84,570,429
70,389,388
19,925,386




25,249,953
20,383,263
841,214


0,0232
0.0476
0.0373
0.405






0.00000185
0.167
0.0218

0.00361
0.0575
0.0214
0.000000827
0 . 00388
0.0027

0.00234

0.00214
0.00561
0.0000534
0.00233
0.0000394
0,0018




0.0575
0.0214
0.407

-------
Table A.4-10. Ex|xjsur* Lewis (in millions fibers inhaled per y«ar) and Hundber of Persons
 Exposed to Secondary Manufacturing Products for Occupational and Hen-Occupational Settings
                             Occupational                            Honoccwpational

                    So, of People     Mil. Pib./Tr      80, of People         Mil. Fih./Jr
1.
2,
3,
4,
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
IS.
17.
IB.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
Conmerclal Paper
Rollboard
Millboard
Pipeline Wrap
Beater- add Caskets
High- grade Elact. Paper
Roofing Felt
Acetylene Cylinders
Flooring Felt
Corrugated Paper
Specialty Paper
V/A Floor tils
Diaphragms
A/C Pipe
A/C Flat Sheet
A/C Corrugated Sheet
A/C Shingles
Drum Brake Linings 
-------
Table A.4-11. Exposure Levels (In millions fibers Inhales! per yoar) and Rutribor of Parsons
      Exposed to Installation of Products for Occupational and Non-Occupational Settings
                             Occupational

                    Ho. of People     Mil. Fib./Yr
             Nonoccupational

Ho, of People         Mil. Fib./Xr
1.
2.
3.
4.
5.
6.
7.
8.
9,
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21,
22.
23.
24.
23,
26.
27.
28,
29.
30.
31.
32.
33.
34.
35.
36,
37.
38.
CoBiaereial Paper
Rollioard
Millboard
Pipeline Wrap
Beater- add Gaskets
Bigh-grade Elect. Paper
Roofing Fait 396
Acetylene Cylinders
Flooring Felt
Corrugated Paper
Specialty Paper
Y/A Floor file
Diaphragms
A/C Pipe 933
A/C Flat Sheet 49
A/C Corrugated Sheet 7
A/C Shingles 323
Drum Braka Linings (Offl)
-Disc Brake Pads, UW (091)
0isc Braks Pads, BV
Brake Blocks
Clutch Facings
Auto. Transmisa. Comp,
Friction Materials
Protective Clothing
Thread, yarn etc.
Sheet Baskets
Asbestos Packings
Roof Coatings
Son-Hoofing Coatings
Ash. Reinforced Plastics
Missile Liners
Sealant Tapa
Battery Separators
Arc Chutes
Drum Brake Linings (A/M)
Disc Brake Pads, LMV (A/M)
Mining and Milling






439 171,136,373 0.000018


«



296 171,136,373 0.0000264
723 171,136,373 0.00000298
723 171,136,373 0.00000043
130 171,136,373 O.OOOOQ052











210,250 1.04










-------
             Table A.4-12. Exposure levels (in millions fibers inhaled pet year) and H-unsber of Persons
                       Exposed to Use of Products for Occupational and Ron-Occupational Settings
                                          Occupational                            Bonocoupational

                                 No. of People     Mil, Fib./Yr      Ho, of People         Mil. Fib./fr
 1,  Cownareial Paper
 2.  Rollioard
 3.  Millboard
 4.  Pipeline Wrap
 5. . Beater-add Gaskets
 6.  High-grade Elect. Paper
 7.  Sooting Felt
 8,  Acetylene Cylinders
 9.  Flooring Felt
10.  Corrugated Paper
11.  Specialty Paper
12.  WA Floor file
13.  Diaphragms
14.  A/C Pips
15.  A/C Flat Sheat
16.  A/C Corrugatod Sheet
17.  A/C Shingles
18.  Drum Brake Linings (OEM)
19.  Disc Brake Pads, LM? (OEM)
20.  Disc Brake Pads, HV
21.  Braka Blocks
22.  Clutch Facings
23.  Auto. Transmlss. Comp.
24.  Friction Materials
25.  Protective Clothing
26.  Thread, yarn etc.
27.  Sheet Gaskets
28.  Asbestos Packings
29.  Roof Coatings
30.  Son-Roofing Coatings
31.  Asb. Reinforced Plastics
32.  Missile Liners
33,  Sealant Tape
34.  Battery Separators
35.  Arc Chutes
36,  Drum Brake Linings (A/M)
37.  Disc Brake Pads, IHV (A/M)
38.  Hinlng and Hilling
 60,943,018
 34,659,752

226,546,000
0.00058
0,00064

 0.0061
165,602,982
191,886,248
0.00058
0.00064

-------
Table A.4-13. Exposurd Levels (in millions fibers inhaled per year) and Number of Persons
   Exposed to Repair/Disposal of Products for Occupational -and Non-Occupational Settings
                             Occupational

                    Ho, of Peopla     Mil. Fib.
             Nonocetifiational

No. of People         Mil. Fifo./Yr
1.
2,
3.
4,
5.
6.
7,
8.
9,
10,
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35,
36.
37.
38.
Conmercial Paper
RolUsoard
Millboard
Pipeline Wrap
Beator-add Gaskets
High-grade Elect. Paper
Roofing Felt 263
Acetylene Cylinders
Flooring Felt
Corrugated Paper
Specialty Paper
V/A Floor lile
Diaphragms ,
A/C Pipe
A/C Flat Sheet 61
A/C Corrugated Sheet 9
A/C Shingles 225
Brunt Brake Linings (OEM)
Disc Brake Pads, IHV 
-------
     B.   BENEFITS  MODEL CALCULATIONMETHODOVERVIEW

     To  estimate the  adverse  health effects from exposure to asbestos  in  the
baseline and under the regulatory  alternatives,  the  population at  risk is
divided into ten  homogeneous exposure  categories for each product  and into
nine age cohorts.  The ten exposure categories  are:

     •    Primary manufacturing, both occupational and nonoccupational
     •    Secondary manufacturing, both  occupational and nonoccupational
     •    Installation,  "both occupational  and nonoccupational
     »    Use,  both occupational and nonoccupational
     •    Disposal  or  repair,  both occupational and nonoccupational

The  nine age groups  are ten  year groups  from birth to age 90.   Within each
group,  all persons are assumed to  have an age equal  to the mid-point  of  the
group.

     Next, the health effects  attributable to the first year of product
manufacture  for one  member of each age and exposure  subgroup,  both in the
baseline and with the  regulatory alternative, are estimated using  an
adaptation of the life table  model described in Eddy (1980).   The  method used
is described below and the computer model included as Appendix A-5,

     The  health effects model  is a  non-stationary Markov process containing 5
states  in which an individual might reside during a  given 5-year time period.
These states are:

         1, Alive, with no known excess lung cancer or mesothelioma or
           gastrointestinal cancer;

         2. Dead from excess  lung cancer;

         3. Dead from excess gastrointestinal cancer;

         4. Dead from excess mesothelioma;  and

         5. Dead from all other causes.

     It is assumed that in the first year  of exposure  an individual has a
probability of 1 of being in  State  1 and  at age  90 a  probability of 1 of being
dead, that is, in States 2 through  5.  A  "transition  matrix" for each five
year period is used  to calculate the probabilities that an individual will
enter or  leave each  of the possible  states  between the  first year  of exposure
and  age  90,   The transition matrix  can be  written as:
           Pll         P12         P13         P14         P15

            01000
            00100
            00010
            00           0           0           1
                                    A.4-24

-------
States 2 through 5 are  "trapping states", in the sense that they are terminal
states for an individual.  The transition probabilities in the first row of
the matrix are derived  as follows:
     Pll  -  1 - (DLC + DGC + DM + DOC)
     P12  -  DLC
     PI 3  -  DGC
     P14  -  DM
     PI5  -  DOC

where

     DLC - five-year excess death rate from lung cancer attributable to
           first year of exposure to asbestos

     DGC «• five-year excess death rate from gastrointestinal cancer
           attributable to first year of exposure to asbestos

      DM - five-year excess death rate from raesothelioma attributable to
           first year of exposure to asbestos

     DOC - five-year death rate from all other causes

    Thus, the model calculates the total expected health effects for an
individual from each population age and exposure subgroup due to the first
year of exposure to asbestos products manufactured in the first year of the
analysis by five-year periods, starting at the individual's age at time of
exposure until age 90,  The model specifically performs the following
operations;

        1. Calculates the appropriate transition probabilities;

        2. Multiplies the initial state vector by this matrix of
           probabilities to obtain a new state vector;

        3. Records the probability of an individual's dying from
           asbestos-induced lung cancer, gastrointestinal cancer or
           mesothelioma from changes in the probability of being in
           states 2,  3, and k between the initial and new state
           vectors;

        4. Records the product of the age at death and probability of
           dying during the period for the three asbestos-related
           cancers and all other causes;

        5. Replaces the initial state vector with the new state
           vector.

     A different transition matrix for each tine period for each population
subgroup for each product is needed to determine the health effects of
asbestos exposure.   To compute these transition matrices, the following inputs
are required:

        1. Age-specific five-year death rates for lung cancer
           attributable to asbestos exposure in the given year;

                                   A.4-25

-------
        2. Age-specific  five-year  death  rates  for  gastrointestinal cancer
           attributable  to  asbestos  exposure  in the  given year;

        3. Age-specific  five-year  death  rates  for  mesothelioma
           attributable  to  asbestos  exposure  in the  given year;

        4. Age-specific  five-year  death  rates  due  to'all other causes.

       The assumption  is made  that mesothelioma death rates do not depend on
age, sex, race, or smoking  habits.   However,  excess  lung cancer and
gastrointestinal cancer  death  rates  and  other  mortality rates do vary
according  to these demographic characteristics.   For simplicity, it is
assumed that the  nonoccupational  population  is identical to the U.S.
population in terms of sex,  race, and smoking habits, and age distribution
(see Table A.4-14).  All occupational  categories  are assumed to have the same
demographic characteristics, and these   are estimated from industry data (see
Table A.4-14).  Smoking habits are assumed to   be  the same as in the general
population.

    In this analysis,  the linear,  no-threshold dose-response relationships
proposed by Nicholson  (1983) are used to convert information on asbestos
exposure levels into excess lung cancer  and mesothelioma death rates for each
time period.  As suggested by Nicholson  (1983),  the  excess death rates from
gastrointestinal cancer are assumed  to be equal to 10 percent of those for
lung cancer for each time period.

    For lung cancer, Nicholson postulates a relative risk model that includes
a minimum 10-year latency period between onset of  exposure and increased risk
of death from cancer:
        IL - IE *  Ii + KL-* f * d(t-io)]for t >  10

        IL = IE    for t <- 10

where

          IL - age-specific lung cancer death rate with exposure to asbestos

          IE -= age-specific lung cancer death rate without exposure to
                asbestos

           t - time from onset of exposure until current age (years)

     d,  , _.  = duration of exposure from onset until 10 years (latency
               period) before current age (years)

           f -« intensity of exposure (f/cc)

          KL - dose-response constant

     IL - Ig — absolute excess lung cancer death rates due to asbestos
                exposure.
                                    A.4-26

-------
Table A.4-14,   Sex,  Race,  and Age Distribution of Exposed Populations
     Characteristic

         Year
ProRgrtion of Population (DecimalShare)
    Occupational     Nonoccupational
       1983
1980
         Male
         Female
     Race
         White
         Non-white
       0.79
       0.21
       0.88
       0.12
0.49
0.51
0.88
0.12
0
10
20
30
40
50
60
70
80
- 9
- 19
- 29
- 39
- 49
- 59
- 69
- 79
- 89
0.0
0.1
0.205
0.210
0.193
0.175
0.117
0.0
0,0
0.146
0.174
0.176
0.139
0.108
0.099
0.083
0.055
0.020
     Sources:   For occupational:   Research Triangle
               Institute 1985 (August).   Regulatory. Impact
               Analysis, of Controls on Asbestos and Asbestos
          - •    Products.   Prepared for the Office of Pesticides
               and Toxic Substances,  U.S.  EPA.   Washington,  B.C.
               Appendix B.   For nonoccupational;  UDOC.   1980.
               U.S.  Department of the Census.   Statistical
               Abstract of the United States.   Washington D.C.:
               Bureau of the Census.
                               A.4-27

-------
     For mesothelioma,  Nicholson postulates an absolute risk model;


         IM - % * f *  [(t-10)3 - (t-10-d)33    for t > 10-fd

         IM ™ % * f *  (t-10)3                 for 10 + d >- t > 10-f-d

         % - 0                                     for t <- 10

where

          t -   time since  first exposure (years)

          d -   total duration of exposure (years)

          f -   level of exposure (f/cc)

         KM «*   dose-response  constant

The  dose-response constants,  estimated using data from human studies of
asbestos-related diseases, vary in magnitude considerably as shown  In
Table A.4-15.   The values  for the dose-response constants used in this
analysis are the mean  values  proposed  by the CPSC (1983)  of l.OE-2  (
for  lung cancer and 1.08E-8  (f-yr/cc)"1  for  mesothelioma.

     The unit measure  for  exposure level in  Nicholson's equations is fibers
per  cubic centimeter (f/cc).   His equations  were  developed from studies  that
used disease data from occupationally  exposed workers with a typical exposure
of 8 hours  per  day,  250 days  per year  and a  breathing rate of 1.3 cu a/hour.
For  a worker so exposed, an exposure level of 1 f/cc is equivalent  to 2,600
million fibers  breathed per year (1 x  1,000,000 x 1.3 x 8 x 250).   To use
Nicholson dose-response relationships  for all different exposure categories
where exposure  levels,  breathing rates and hours  exposed per year nay all be
different than  those for a full tine worker,  the  exposure levels derived from
million fibers  breathed per year,  as outlined in  the previous  subsection.  The
million fibers  breathed per year were  then divided by a normalizing factor of
2,600 to  convert  these exposure levels into  Nicholson's full-time-equivalent
worker  exposure  level  measured as f/cc before use  in the  dose-response
relationships presented above.

     In  order to compute the age-specific five-year excess death rates from
lung cancer  attributable to a single year of exposure the following inputs are
used in Nicholson's  lung cancer dose-response equation described above:

         (a)    Asbestos  exposure level in the given year,  normalized to
               Nicholson's occupational  exposure  f/cc units;

         (b)    Age-specific five-year  baseline lung cancer death rates;  and

         (c)    Lung  cancer dose  response constant.

For  all products  and exposure  categories,  the exposure levels  are assumed to
remain  constant at  the  levels  presented  in the exposure data tables  (Tables
A.4-9 through A.4-13).   As indicated,  the  million  fibers  breathed per year
exposure  levels presented in  these  tables  are divided by  the normalizing

                                    A.4-28

-------
       Table A.4-15.   Estimated Values  of Lung Cancer  and Mesothelioma
                            Dose-Response  Constants
         Mortality  Study
  Estimated Value        Estimated Value
Lung Cancer Constant  Mesothelioma Constant
                                        (f-yr/ee)-1
                          (f-yr/cc)-1
Finkelstein et al. 1983

Seidman et al. 1979, pp. 61-89

Dement et al. 1982

Selikoff et al. 1979, pp. 569-585

Peto 1980, pp. 829-836

Henderson and Enterline 1979,
  pp. 117-126

Hughes and Weill- 1980, pp. 627-637

Rubino et al. 1979

Nicholson et al. 1979

McDonald et al. 1980

Berry and Newhouse 1983, pp. 1-7
      4.8 E-2

      6.8 E-2

    2.3-4.4 E-2

      1.0 E-2

      1.0 E-2

    3.3-5.0 E-3


      3.1 E-3

      1.7 E-3

     ' 1.2 E-3

      6,0 E-4

      6.0 E-4
1.2 E-7

5.7 E-8



1.5 E-8

7.0 E-10
Source;  Chronic Hazard Advisory Panel on Asbestos.  1983 (July).  Report to
         the U-.S. Consumer Product Safety Commission.  Washington D.C. •
          p. 11-129,
                                   A.4-29

-------
factor of  2,600  to  convert  them to  Nicholson's  occupational exposure  f/cc
units.  Age-specific  five-year  baseline  lung cancer  rates  were taken  from  the
Vital Statistics of the United  States  for 1977  (U.S.  Department of Health  and
Human Services,  1981).  A baseline  lung  cancer  rate  for the year 1990 is
projected  using  the 1977 rates  and  inflating them for the  older cohorts as
suggested  in Doll and Peto  (1981).   Increases of 2 percent per year for men
over 50 and 4 percent per year  for  women over 40 are assumed.   These  increases
are projected because of past increases  in smoking.   Since smoking rates have
been declining in recent years,  the projected 1990 lung cancer death  rates are
likely to  overstate the baseline death rates that will be  observed in the
twenty-first century.  Therefore, 1977 lung cancer rates have  been used in
this analysis.   This  assumption understates these rates in the beginning of
the period of analysis, but is  likely  to overstate concentrates later in the
period.  The lung cancer dose response constant that is used in this  analysis
is 1.0 E-2 (f-yr/cc)"i, the mean value of those that are presented in
Table A.4-15 as  computed by the CPSC (1983).

     In order to compute the five-year age-specific  death  rates from
gastrointestinal cancer attributable to  a single year of exposure,  a  ratio of
excess gastrointestinal deaths  to lung cancer deaths of 0.1 is assumed as
suggested  by Nicholson (1983).

     In order to compute the five-year age-specific  death  rates from
mesothelioma attributable to a  single  year of exposure,  the following inputs
are used in Hicholson's mesothelioma dose-response equation described above:

        (a)    Asbestos exposure level in the given  year,  normalized  to
               Nicholson's  occupational  exposure f/cc units;

        (b)    Time since year  of exposure;  and

        (c)    Mesothelioma dose-response constant.

For all products  and  exposure categories,  the exposure levels  are  assumed  to
remain constant  at  the levels presented  in Tables A.4-9 through A.4-13.  As
indicated,  the million fibers breathed per year exposure levels presented  in
these tables are  divided by a normalizing factor of  2,600  to convert  then  to
Nicholson's occupational exposure f/cc units.   For each five-year  period,  the
time since exposure is assumed  .to...be...equal to .the. time from "exposure..-to -the
mid-point  of the period.   The mesothelioma dose-response constant  used is  1.0
E"-Bnff'-yr/ee)-1--,	which is the mean  value of those presented in Table  A.4-15 as
computed by the  CPSC  (1983).

     Five-year death  rates  for  all  causes by sex,  race,  and age are estimated
based on the 1978 U.S. life tables  and are assumed to remain constant in the
future (Cooper et alA 1983).  All persons alive at age 89  are  assumed to die
during their ninetieth year.

     Finally, in  order to estimate  the avoided  cases  of cancer from the
estimates of avoided  cancer deaths,  the  cure  rates for the three asbestos-
related cancers  are estimated from  the equation;

        (Relative survival  rate  at  time  t)   «-  c  + (1-c) (l-b)t
                                    A.4-30

-------
  where:

      c  —   cancer cure rate (the proportion of people with the disease  for
             whom it is no longer life threatening);

      b  -   annual mortality rate for dying patients;  and

      t  —   time since diagnosis (years).

  Estimated values for both "c"  and "b" are obtained  using publicly available
  data on survival-for lung cancer,  gastrointestinal  cancer (Axtell e£ al. 1986)
  and  mesothelioma (Chahinian 1982) .   The  values of  the cure rates estimated
  and used in the analysis are 8 percent for lung cancer,  36 percent  for
  gastrointestinal cancer ,  and 2 percent for mesothelioma.

     The health  effects model tracks  an individual for each age and  exposure
  subgroup starting from a single year of exposure, by  five year periods, until
  age 90,  at  which point the probability of being alive is assumed to zero.  For
  each five-year  period the probability of  dying of asbestos-related  cancers is
I  estimated as  the product of the probability of being  alive in  that  time period
  and the probability  of dying from an asbestos.-related cancer if alive.  The
  probability of  being alive during any five year time  period decreases with
  age.-  The probabilities of dying from asbestos-related cancers if alive are
  estimated using the  Nicholson  dose-response relationships  and  the exposure
  data.   These  probabilities increase  with  time  elapsed since the initiation of
  exposure as follows.

     The  dose-response  relationships  assume a minimus  ten-year  latency period
 between exposure  and excess  cancer risks.   Thus, the  probability of dying from
  an asbestos -related cancer  will be  zero  for the first two five year periods
  after exposure.   After ten years,  the probability of  dying of  an asbestos-
  related cancer  increases with  time since  onset  of exposure.  In the case of
 mesothelioma, the absolute risk model generates  death rates that increase with
  time since  exposure.   In the case of lung cancer (and gastrointestinal cancer
 which is estimated as  10 percent of  the lung cancer rate)  the  excess risks
 remain  constant over time  relative to the baseline lung  cancer death rates.
 However, the baseline  lung cancer death rates increase with age and,
 therefore,   the probability of  excess  lung cancer or gastrointestinal cancer
 increases with age or  time since onset of exposure.   Thus,  for each age
 cohort,  the probabilities  of dying from asbestos-related cancers attributable
 to a single year  of exposure increase with time since  the  onset of  exposure
 except at the older ages where  competing  causes of death reduce the
 probability of observing deaths  from  asbestos-related cancers.

     The probabilities  of observing deaths  from asbestos-related cancers in
 each five year tiae period for  an individual from each age-exposure subgroup
 are multiplied by the number of  people in the population subgroup to generate
 estimates of the expected asbestos-related cancers in the  subgroup
 attributable to the single year  of exposure.  These estimates  follow the same
 time distribution relative to exposure as  the individual probabilities --no


        The  36 percent cure rate  for gastrointestinal cancer is  the cure rate
 for colorectal cancer.  Cure rates for other gastrointestinal cancers  may
 differ  from this rate,

                                    A.4-31

-------
cases for ten years followed by an  increasing an  then  decreasing number with
age.

    Estimates of deaths from asbestos-related cancers  are  generated for
exposures both with and without the regulations and the differences in
asbestos-related cancers computed for each five year period.  These
differences, avoided cancers, are the estimate health  benefits  for the
regulation.  When these avoided cancers are aggregated across age-cohorts,
their resultant time distribution ranges fron 10  to 80 years with most cases
occurring 35 to 60 years after exposure.

    The results for each population age-exposure  subgroup  for each product are
added for each five-year time period after the start of the analysis to
determine, for each product, the total avoided cancer  deaths during each time
period attributable to the regulatory alternative.  In doing this aggregation
it is assumed that the avoided cancer deaths are  distributed uniformly
throughout each five-year period.  Furthermore, the aggregation of the avoided
cancer deaths estimated for different exposure categories  has to take into
account the timing of exposures.

    Exposures from releases during product installation are assumed to be
contemporaneous with those from primary and secondary  product manufacturing,
Exposures from repair or disposal are assumed to  occur at  the end of the
average product life.  Exposures during product use are assumed to be evenly
distributed across the time from product manufacture to repair  or disposal.
The estimated avoided cancer deaths for the repair/disposal category are   *
shifted forward in time by a number of years equal to  the  average product life
before being added to the estimates for primary and secondary manufacturing
and installation.  The estimated avoided cancer deaths for one  year of
exposure in the use exposure category are assumed to be replicated for each
year of use of the product, shifted forward in time one year at a time from
the time of manufacture.  Thus estimates are obtained  for  the number of
avoided deaths from lung cancer, gastrointestinal cancer,  and mesothelioma
attributable to the regulation's impact on each product's  manufacture in the
first year of the analysis.

    After the avoided cancer deaths attributable  to asbestos releases from
products manufactured during the first year of the analysis have been
estimated, the avoided cancer deaths for products manufactured  all subsequent
years of the analysis  are estimated by multiplying the first year estimates
by the ratio of the level of production in the subsequent  year  compared to
that in the first year.  The ratio of future to current production varies
according to general trends in the industry baselines  as well as according to
features of the regulatory alternatives.

    The total number of avoided cancer deaths attributable to the regulations
impact on asbestos products manufactured 1987-2000 for each product for each
five-year period after the start of the analysis  are then  calculated by
aggregating the deaths avoided associated with each year of manufacture.  The
timing of the cases is preserved by assuming that the  deaths in any five-year
period are uniformly distributed, and by shifting the  estimated avoided deaths
for any given year of manufacture forward in time by the number of years from
the beginning of the analysis.  Finally, the total numbers of avoided excess
cancer cases for each five year period are estimated by dividing the estimated
numbers of cancer deaths by the death rates for each type  of cancer.

                                    A.4-32

-------
 REFERENCES
 Advisory Committee on Asbestos.  1979a,  Asbestos volume 1: final report of
 the Advisory Committee,  London, UK; British Health and Safety Commission (as
 reported in USEPA 1986).

 Advisory Committee on Asbestos.  1979b.  Asbestos volume 2: final report of
 the Advisory Committee.  London, UK: British Health and Safety Commission (as
 reported in USEPA 1986).

 Axtell, LM, Asire, AJ, Myers, MB.  1976.  Cancer Patient Survival.  Report
 No. 5.  Washington, B.C.: U.S. Government Printing Office.

 Berry, G and Newhouse, ML.  1983.  Mortality of Workers Manufacturing Friction
 Materials Using Asbestos,  Br. J. Ind. Med: 40.  pp. 1-7.

 Bertrand, R.,  Pezerat H.  1980.  Fibrous Glass: carcinogenicity and
 dimensional characteristics.  In Biological effects of mineral fibers.  IARC
 2:901-911,

 Chahinian, AP.  1982.  Malignant Mesothelioma.  In: Cancer Medicine, 2nd
 edition, Holland, JE and Frie, E, eds., Philadelphia: Lea and Febiger.

 Chronic Hazard Advisory Panel of Asbestos,  1983 (July).  Report to the U.S.
 Consumer Product Safety Commission by the Chronic Hazard Advisory Panel on
 Asbestos.  Washington B.C.: Consumer Products Safety Commission.

 Cooper, R, Cohen, R,  Amiry, A.  1983.  Is the Period of Rapidly Declining
 Adult Mortality in the U.S. Coming to an End?  Am.  J. Public Health ;73.
 pp. 1091-1093.

 Dement, JM, Harris, RL, Synions, MJ,  et al.  1982.  Estimates of Dose-Response
 for Respiratory Cancer among Chrysotile Asbestos Textile Workers.  In:
 Inhaled Particles V. , Walton, HH, ed., Oxford : Pergamon.

•Dement JM, Harris RL, jr., Symons MJ, Shy CM.  1983.  Exposures and mortality
•among chrysotile asbestos workers.   PArt II: Mortality.  Am J-Ind Med 4:421-
 433.

 Doll,  R and Peto, R.   1981.  The Causes of Cancer:  Quantitative Estimates of
 Avoidable Risks of Cancer in the United States Today,  J. Nat.  Cancer
 Inst.:  66. pp. 1191-1308.

 Doll,  R and Peto, R.   1985..  Asbestos: Effects on the health of exposure to
 asbestos.   London,  UK:  Health and Safety Commission.

 Eddy,  DM.   1980.  Screening for Cancer: Theory, Analysis, and Design.
 Englewood Cliffs, N.J.: Prentice-Hall.

 Henderson,  VI  and Enterline, PE.   1979.  Asbestos Exposure: Factors Associated
 with Excess Cancer and Respiratory Disease Mortality.  Annals NY:  Academy of
 Sci:  330.   pp.  117-126.
                                    A,4-33

-------
 Hobbs,  MST.,  Woodward,  SD,  Murphy,  B et al.   1980.   The Incidence of
1Pneumoconiosis,  utesothelioma,  and other respiratory cancer in men engaged in
 mining and milling crocidolite'in Western Australia.   Biological Effects  of
 Mineral Fibers;  2.   pp.  615-625,  IMC Scientific Publication No.  30.

 Hughes, J and Weill,  H.   1980.   Lung Cancer  Risk Associated with Manufacture
 of Asbestos-Cement Products. Lyon,  France:  IARC Scientific Publication No. 30,
 pp.  627-635.

 ICF Incorporated.   1988 (March).   Asbestos  Exposure Assessment.   Prepared for
 Dr Kin Wong,  Chemical Engineering Branch,  Office of Pesticides and Toxic
 Substances, U.S.  EPA Draft  Report.

 Jacob,  G and  Anspach,  M.  1964.   Pulmonary Neoplasia among Dresden Amosite
 Workers.   Annals  N.Y.  Academy  of Sci.:  316.   p.  536.

 Jennings 1985.  Versar,  Inc. Methods for assessing  exposure to chemical
 substances.   Volume 7.   Methods  for assessing consumer exposure to chemical
 substances.   Report to EPA  under EPA contract 68-02-3968.

 Jones,  JSP, Smith,  PG,  Pooley, FD e_t al.   1980.   The Consequences of Exposure
 To Asbestos Dust  in a Wartime  Gas Mask  Factory.   Biological Effects of
 Mineral Fibers:  2.   pp.  637-653,  Lyon,  France:  IARC Scientific Publication
 No.  30.

 Langer,  AM.   1986  (April 18).  Letter to Document Control  Officer (&S-793),
 Office  of Toxic Substances, U.S.  Environmental  Protection  Agency fron Dr.
 Arthur  M.  Langer, Associate Director, Environmental Sciences Laboratory,  Mount
 Sinai Medical Center,  NY.

 McDonald,  JC,  Liddell,  FDK, Gibbs,  GW et al.   1980.   Dust  Exposure and
 Mortality in  Chrysotile  Mining,  1910-1975. Br.  J. Ind.  Med.  :  37,  pp.  11-24.

McDonald AD,  Fry JS, Wooley AJ, Mcdonald JC.   1983.   Dust  exposure and
mortality in  an American chrysotile textile  plant.  . Br  J Ind Med 40:361-367.

National  Research Council.  1984.   Nonoccupational  Risks of Asbestiform
 Fibers, Washington  D.C.:  National Academy Press.

Nicholson, WJ, Selikoff,  IJ, Seidman, H et al.   1979.   Long-Term Mortality
 Experience of Chrysotile  Miners and Millers  in  Thetford Mines,  Quebec. Annals
NY Academy of Sci.  :  330.  pp. 11-21.

Nicholson, WJ.  1983.  Quantitative Risk Assessment for Asbestos-Related
Cancers.   Washington, D.C.: U.S.  Department  of  Labor, Occupational Safety and
Health  Association, Contract J-9-F-2-0074.

Peto, J.   1979.  Dose-Response Relationships  for Asbestos-Related Disease:
 Implications  for Hygiene  Standards,  Part II,  Mortality.  Annals N.Y,   Academy
Sci  :330.  p.  195.

Peto, J.   1980.  Lung Cancer in Relation to Measured  Dust  Levels  in an
Asbestos  Factory.   In: Biological Effects of  Mineral  Fibers.   Wagner,  JC,  ed.
Lyon, France  : IARC Scientific Publication No.  30,  pp.  829-836.


                                    A.4-34

-------
 Peto,  H,  Seidman, H,  and  Selikoff,  IJ,  1982.  Mesothelioma  Incidence  In
 Asbestos  Workers:   Implication for  Models  of  Garcinogenesls and Risk
 Assessment,    Br. J.  Cancer  :45.  pp.  124-135.

 Rubino, GF,   Piolatto, G, Newhouse, ML et  al,   1979.  Mortality of Chrysotile
 Asbestos  Workers at the Balangero Mine, Northern  Italy.   Br.  J.  Ind   Med- 36
 pp.  187-194.

 Seidaan,  H,  Selikoff, IJ  and Hammond,  EC.   1979.  Short-Tem Asbestos Work
 Exposure  and Long-Term Observations.   Annals  of N.Y. Academy Sci.: 330  pp
 61-89.

 Selikoff,  IJ,  Hammond, EC, Seidman, H.  1979.   Mortality  Experience in
 Insulation Workers  in the United States and Canada.  Annals of  N.Y. Academy of
 Sci.:  330.   pp. 91-116.

 Stanton,  MF,  Layard M, Tegeris, A., et al..   1981.  Relation of particle
 dimension to  carcinogenicity in amphibole  asbestos and other fibrous  minerals.
 JNCI 64:965-975.

 U.S. Department of  Health and Human Services.   1981.  Vital Statistics of the
 United States  1977:  Volume II' -- Mortality Part A, Hyattsville, Md:
 National  Center for Health Statistics.

 U.S. Department of  Labor.  1986 (June  11).  Occupational  Safety and Health
 Administration, Office of Regulatory Analysis.  Final Regulatory Impact and
 Regulatory Flexibility Analyses of  the Revised  Asbestos Standard.

 USEPA 1986.  Airborne Asbestos Health Assessment  - Update.   Environmental
 Criteria  and Assessment Office, EPA/600/8-84/003F, Research Triangle  Park, 1C
 June.

 USCPSC.   1983.  U.S. Consumer Product  Safety Commission.  Chronic hazard
 advisory  panel on asbestos (CHAP). Washington,  DC: U.S. Consumer Product
 Safety Commission.

 Versar Incorporated.  1988.  Asbestos Modeling  Study..  Prepared for Exposure
 Evaluation Division, Exposure Assessment Branch, Office of  Pesticides and
 Toxic Substances, U.S. EPA Final Report.

 Versar Incorporated.  1987 (September  25).  Konoccupational Asbestos  Exposure.
 Prepared  for Exposure Evaluation Division,  Exposure Assessment  Branch, Office
 of Pesticides and Toxic Substances,  U.S. EPA Final Report.

WHO,  1985.  World Health Organization.  Environmental health criteria
 document on asbestos and other natural minerals.  Draft.
                                   A.4-35

-------

-------
                      A-5  HEALTH EFFECTS COMPUTER MODEL

    This appendix presents the computer model- developed for estiaating the
health effects associated with exposure to asbestos in both the baseline and
under the various regulatory alternatives.
                                   'A.5-1

-------
                       DESCRIPTION OF BENEFITS PROGRAM
MAIN PROGRAM -- IN AMB.FOR

 1. Characterizes variables as real, integer, charter, and common, specifies
    their dimensions, and creates some double precision variables.

 2. Reads in values for dose-response constants by product at default values
    KL - 0.01, KB - 1.0 x 10   for all products.

 3. Sets starting age and age interval for age groups.

 4. Reads in population weights by age, sex, race, for occupational,
    nonoccupational, and school plus occupational groups  (nixed).

 5. Prompts user for name of baseline index file.

 6. Prompts user for name of alternative index file.

 7. Opens baseline and alternative index files.

 8. Prompts user for routing of output to disc file or printer.  If user
    chooses disc file, prompts user for file name and opens output file.
    Cautions user if output file already exists and allows user  to choose
    another name or to overwrite the existing file.

 9. Reads in number of years for analysis (frost 1-20 years) and  identifies
    starting and ending year.

10. Reads in average lifetime for each product rounded to the nearest integer
    (to 1 if average lifetime is less than 1),

11. Prompts user for Exposure Categories to be estimated.

12. Prompts user for Products to be estimated.

13. Prompts user for dose-response constants to be used,

14. Prompts user for year of baseline lung-cancer deaths to be assumed, 1977
    or 1990.

15. Prompts user for proportion of excess lung-cancer death rate assumed for
    Gl cancer.

16. Prompts user for number of discount rates <1-10) and their values,

17. Prompts user to specify exposure data file, including drive  specifier and
    name,

18. Reminds user of name of output file and asks user to wait for program
    terminated message.

19. GALL INTAB - - Subroutine to compose and write to the output  file 4 tables
    containing the values for the inputs used in the analysis,

                                    A.5-2

-------
 20.  Reads  in exposure  levels  in units  of millions  of fibers breathed per year
     and number of people  exposed from  user-specified CBI disc.  '

 21.  Initializes variables that accumulate cases, deaths, and people  exposed,
     by product and in  total,  with and  without  the  new regulations  to zero
     (RRR,  TOT1, PPP).

 22.  Initializes index  variables to zero  (BPROJ,  PROJ).

 23.  START  BAN/HO  BAN Loop (2)  (or New  Regulation/Status  Quo).

 24.  Initializes transition natrix to zero.

 25.  Initializes life-years variable (EXP1).

 26.  CALL DARSAD --  Subroutine to calculate  from  1985 input data, number  of
     people exposed and level  of exposure for the first year of  the analysis
     for each exposure  category for each  product, using new regulation or
     status quo production-level indexes.
                             *

 27.  STARTS PRODUCT  Loop (36 or lower number chosen by  user).

 28.  Initializes,  for each product,  single and multiple-year collecting
     variables,  multiple-year  life-years  variable,  average age variable,  and
     population variable (R, RR,  EX1, TA,-  SSI).

 29.  STARTS GROUP  Loop  for exposure categories  (10  or lower number  chosen by
     user).

 30.  Initializes,  for each exposure category, single  year collecting  variable
     and single year life-years  variable  (T, El).

 31.  If  repair  or  disposal  --  creates time shift variable for onset of
     exposure.

 32,  Skip to  end of  GROUP  Loop  if zero people exposed in  the exposure category,

 33.  CALL INIT  --  Subroutine to  set number of people  exposed, level of exposure
     in  f/cc  duration of exposure (1 year) for the  product and exposure
     category.

 34.  Sets AGEMID to  first Age,  5  years.

 35.  STARTS AGE GROUP Loop  (9).

 36.  Sets appropriate population weight.

 37.  Initializes state vector to  [10000] for each age-group.

 38.  Calculates number of 5-year  periods from age in  1990 to age 90 (N).

 39.  STARTS FIVE YEAR Loop  (N).

40. Calculates age at midpoint -of  each 5  year period.

                                    A.5-3

-------
41, Calculates 5 year age period number (1-18)- for each iteration of 5 Year
    Loop,

42, CALL INC - - Subroutine to calculate baseline lung cancer death rate for
    product, exposure, and 5 year age category -- using the 1977 and 1990
    rates as specified by the user.

43. Calculates asbestos induced excess death rates for lung cancer.

44. Calculates asbestos induced excess death rates for mesothelioma.

45. CALL TRANSI -• Subroutine to calculate excess deaths from lung cancer,
    gastrointestinal cancer, and mesothelioma for each remaining 5 year period
    of lie for product, exposure, and age category for products manufactured
    during the first year of the analysis only.

46/ ENDS FIVE YEAR Loop.  •

47. Sets starting age for next age group.

48. ENDS AGE GROUP Loop.

49. CALL AG -- Subroutine to adjust estimates of excess deaths from lung,
    cancer, gastrointestinal cancer, and mesothelioma for the use exposure
    categories (4 and 9) where a given product may be used for multiple years.

50. ENDS GROUP (Exposure category) Loop.

51. CALL AGG -- Subroutine to convert estimates of excess deaths from lung
    cancer, gastrointestinal cancer, and mesothelioma for all exposure
    categories front first year product estimates to estimates- for multiple
    years of production.

52. CALL PENT -- Subroutine to compute excess cases from excess death
    estimates and to store both estimates for each product in variable ERR.

53.      PRODUCT Loop.

54. CALL TOTAL -- Subroutine to write to output file estimated excess deaths
    and cases by five year period for all products with the new regulation and
    with the status quo.

55. ENDS BAN/NO BAN Loop.

56. CALL BANEFF -- Subroutine to write to output file differences between new
    regulation and status quo situation for each product separately and for
    all together.  Discounted totals are also computed and presented..

57. STOP.

58. END.
                                    A,5-4

-------
Subroutine DAREAD -- in INDATA.FOR

 1. Characterizes variables,

 2. Reads in exposure level and population number data for 1985.

 3, Reads in production projections indexes for 1987-2007 relative to 1985 by
    CALL FILE -- Subroutine to read in and write to output file production
    indexes in baseline regulation and alternative regulation situation.

 4. For each product and exposure category, calculates the number of people
    exposed in first year of analysis by weighting 1985 population estimate by
    first index.  Exposure level is assumed to remain constant at input level
    and duration of exposure is set at 1 year.

Subroutine INIT-- in INDATA.FOR

 1. Characterizes variables.

 2. Defines the three product and exposure category specific parameters:
    number of people, level of exposure, and duration of exposure, derived in
    DAREAD and used in the simulation.

 3. Aggregates number of people exposed across exposure categories for each
    product.

 4. Sets NO;  1 -- occupational; 2 -- nonoccupational; 3 -- school and
    occupational, mixed'.

Subroutine INC — in INDATA.FOR

 1. Characterizes variables.

 2. Calculates weighted average baseline lung cancer death rate for the 5 year
    period and population group (by exposure category and age) of interest
    using either 1977 or 1990 lung cancer death rates as required by the user.
    The race and sex weights vary according to whether the exposure is
    occupational or nonoccupational.

_S4Abrout;ine__TRANSI --in CAL.FOR

 1, Characterizes variables.

 2. CALL LIFE -- Subroutine to calculate 5 year mortality rate for all other
    cases (weighted average by sex and race).

 3. Calculates nonconstant elements of the transition matrix for the year and
    population group of interest.

 4. Calculates new state vector.

 5. CALL ACCUM - - Subroutine to collect cancer deaths for each 5 year period
    since first year of analysis.

 6. Puts value of new state vector into old state vector.

                                    A.5-5

-------
SubroutineACCUM -- in CALC.FOR

 1.  Characterizes variables.

 2,  Accumulates for each 5 year period and for each age deaths from four
    different causes, excess lung cancer, excess gastrointestinal cancer,
    excess mesothelioma, and all others.

 3.  Accumulates remaining life-years for exposed population for banned and
    unbanned products.

Subroutine LIFE -- in INDATA.FOR

 1.  Characterizes variables,

 2.  Calculates weighted average death rate for all other cases using 5-year
    death rates by sex and race.  The race and sex weights vary according to
    whether the exposure is occupational or nonoccupational,

SubroutinePENT -- in TABLES,FOR

 1.  Characterizes variables.

 2.  For each product, computes and stores total cases and average age of death
    from lung cancer, gastrointestinal cancer, and mesothelioma attributable
    to asbestos exposure.

Subroutine TOTAL -- in TABLES.FOR

 1.  Characterizes variables,

 2.  Totals and writes to output file deaths and cases of lung cancer,
    gastrointestinal cancer, and mesothelioma by 5 year period and for all
    periods for all products together for new regulation and status quo.

Subroutine BANEFF -- in TABLES.FOR

 1,  Characterizes variables.

 2.  Initializes difference variables for each product separately.

 3,  Computes differences for total deaths and cases by disease and product, and
    writes them to the output file.

 4.  Initializes difference variables for all products together.

 5.  Computes differences in deaths, by disease and total, and total cases, by
    5-year period with and without the new regulation for all products.

 6.  Calculates the total differences in deaths, by disease and total,  and
    total cases, with and without the new regulation for all products, at 0
    discount rate -and up to ten other discount rates,

 7,  Writes to output file results of regulation effects calculations for all
    products,

                                    A.5-6

-------
Subroutine FILE -- in FILE.FOR

 1. Characterizes variables.

 2. Reads in products projection indexes, 1987-2007, relative to 1985 from
    base and alternative files named by the user,

 3. Writes the index files to the output file.

 4. Creates PROJ.for no ban indexes and BPROJ for either .ban or no. ban indexes
    depending on IB - 1 or 2 respectively, (BAN/NO BAN Loop).

SubroutineAG -- in CALC.FOR

 1. Characterizes variables.

 2. For use exposure categories only (4 and 9} converts total excess cancer
    deaths for 1 year use of product to excess deaths from use of the product
    for the average product lifetime, adjusting timing of excess deaths for
    each year after first year of analysis to reflect time of exposure.

Sub rout i.nemAGi -- in GALC.FOR

 1. Characterizes variables.

 2. For all exposure categories, converts total excess cancer deaths for 1
    year of production to excess deaths from multiple-year production by
    weighting the first year estimates by each subsequent year's production
    level index, and adding the estimates for all the years.  Before adding
    the estimates for each year, the timing of excess deaths for each year
    after first year of analysis is adjusted to reflect time of exposure.

Subroutine INTAB -- in TABLES.FOR

 1. Characterizes variables«

 2. Writes to output file table listing files used in the analysis and tine
    period of analysis.

 3. Writes to output file exposure groups analyzed (CALL GR for Group list).

 4. Writes to output file products analyzed (CALL PR for Product list), and
    their dose-response constants, year for baseline cancer, and GI to lung
    cancer ratios assumed.

 5, Writes to output file table listing discount rates used.

Subroutine GR -- in TABLES.FOR

 1, Characterizes variables,

 2, Lists exposure group categories.
                                    A.5-7

-------
Subroutine_PR -- in TABLES.FOR




 1.  Characterizes variables,




 2.  Lists product categories.
                                    A.5-8

-------
ABM.FOR
                              Tuesday Hay 31, 1988  1Z:00 AH
                                                                         Page 1
    1 C
    2 C
    3 C
    4 C
    5 C
    6 C
    7 C
    8 C
    9 C
   10 SLARGE
   11 SNOFL0ATCALLS
   12 C
 INTERACTIVE BENEFITS MODEL  FOR ASBESTOS RIA
 WRITTEN  BY JO MAUSKOPF  -  RESEARCH  TRIANGLE INSTITUTE,  NORTH
 CAROLINA

 TEL.  C919) 541-6468

 5/16/88
   13 C
   14 C
   15 C
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31
   32
   33
   34
   35
   36
   37
   38
   39
   40
   41
   42
   43
   44
   45
   46
   47
   48
   49
   50
   51
   52
   53
   54 C
   55
   56
   57,
   58
   59
   60
   61
   62
   63 C
   64
   65
   66
   67
   68
   69
   70
   71
   72
   73 C
   74 6661
   75
   76
   77
   78
   79
   80
 COMMON/T/«ANOP,MANOS, IN$0»U$EO,D1SO,MANAP, MANAS, I»SA,USEA,
*DISA,PiWNaP,PMANOS,PINSO,PUSEO,PDISO,PMANAP,P«AHAS,PIKSA,
*PUSEA,PDISA
 REAL MAKOP(38),MAMOS(38), INSO(38),USEO(38) ,D1SO(38) ,
*MANAP(38hMANAS(38} , INSAC38) ,USiA(38),D ISAC38) ,PMANOPC38» ,
*PHAMQS{38),PIN$0<38),PUSEO(38),PDiSQC38>,PMANAP(38>,
*PMANAS(38>,PINSA(38>,PUSEA(38),PDISAC38)
 DIMENSION POP(38,1Q>,P(5,5>,V(5>,TOT1(2,28,4>,
*RMAX(38,10},RLEV(38,10), TAC18,4),PPP{2,38),
* OISC{10),TT1C2,4),8PROJ(38,20},PROJ(38,20),RR*1£38,8,115,
* R(28,4),RR(28,4),RRR2(38»8,11),T£m(38,8,11>,T£M2(38,8,11)
 REAL FKl{38>,F»a{38},0WT{9,3>,OSRim4,3)
 REAL A6i,DT»TT
 INTE6ER LlFE(38),AGEST,AG£iNT,NPNa8),At38),8C10>
 INTEGER AGEMID,YEAR,IYRS
 SEAL*8 PP,P,T,R,WT,V,TOT1,TT1,R>TM,FDTL,DISC,RR,
*EXP1,EX1,E1,TA,RRR1,RRR2,PPP,T£M1,'&£«2
 CHARACTER RES,PCBRK
 CHARACTER*25 F I LE , F I LE2, F I LE3, F I LE4 , F I LE7
 COMMON /A1/T{28,4>
 COMMON /01/ F,MAXOT,PP
  DATA FKL/.01,.Q1,.01,.01,.01,.01,.01,.01,.01,.01,.Ol,
  .01,. 01,. 01,. 01,. 01,. 01,. 01, .01,. 01, .01,. 01, .01,. 01,. 01,
   .01 , .01 , .01 , .01 , .01 , ,01 , .01 , .01 , .01, .01 , .01 , .01 , ,01/
 DATA FKM/. 00000001 , .00000001 , .00000001 , .00000001 ,
  .00000001 , .00000001 , .00000001 , .00000001 , .00000001 , .00000001 .
  .00000001 , .00000001 , .00000001 , .00000001 , .00000001 , .00000001 ,
  .00000001 , .00000001 , ,00000001 , .00000001 , .00000001 , .00000001 ,
  .00000001 , .00000001 , .00000001, .00000001 , ,00000001 , .00000001 ,
* . 00000001 , . 00000001 , .00000001 . .00000001 ,
* .00000001 , .00000001 , .00000001 , .00000001 , .00000001 , .00000001/
 DATA AGESI/5/
 DATA AGE I NT/ 10/
  DATA OyT/.0,.1,.205,.210,.193,.175,.117,.0,.0,
* .146, .174, . 176, . 139, . 108, .099, ,083, .055, .020,
* .06, .36, .17, , 13, . 1 1 , .10, .07, .0, ,0/
  DATA OSRWT/.695, .095, .185, .025, .431, .059, .449, ,061,
*  .431,. 059,. 449,. 061/

 WRITE 
 WRITE (*,*) 'THIS PS
 WRITE (*,*)
 WRITE (*,*)
 WRITE (*,*) 'TO RUN THIS PROGRAM, FOLLOW THE USER FRIENDLY'
 WRITE (*,*> 'INSTRUCTIONS!'
 WRITE C*,'(8(/»')
 PAUSE 'Press the  or the  key to continue'

 WRITE (*,'{24(/))'>
 WRITE (*,*> 'Please enter name of data file containing BASELINE'
 WRITE {*,*) 'indices.  (Include path if necessary,)'
 READ (*,'CA)') FILE3
 WRITE (*,'')
 WRITE <*,*)'PieBSe enter name  of data file containing ALTERNATIVE'
 WRJTE (*,*)' indices.  (Include path H necessary,)'
 READ (*,'(A>')
 WRITE (*,'(///)')
'THIS PROGRAM MODELS THE BENEFITS Of ASBESTOS'
'PRODUCT REGULATIONS.'
 OPEN<1,IOSTAT=IERR3,FILE=FILE3,STATUS='OLO'>
 IF OERR3 .LE. 0) GO TO 6662
 WRITE (*,'')
 WRITE (*,*) 'FILE ', FILES,'  NOT FOUND ON SPECIFIED PATH'
 WRITI (*,'(//}')
 WRITS (*,*> 'Please enter name of data file containing SASELINE'

-------
ABM.FOR                       Tuesday Hay 31, 1988  12:00 W                        Page  2


   81       WRITE (*,*> 'indices.  Cinclude path if necessary,)'
   82       READ <*,'
   84       GO TO 6661
   85 6662  l£RR4=Q
   86       OPEN {2,IOSTAT=1£RR4,FILE=FILE4,STATUS='OLD')
   87       IF (IERR4 .16. 0) GO TO 146
   88       WRITE <*,'(//)')
   89       WRIT! <*,*} 'FILE ',FILE4,' NOT FOUND ON SPECIFIED PATH'
   90       WRITE (*.'(//>')
   91       WRITE (*,*)'Plea$e enter name of data file containing ALTERNATIVE'
   92       WRITE <*,*> 'indices.  {Include path if necessary,)'
   93       READ ') FILE4
   94       WRITE (*,'{///>'}
   95 C
   96  146  WRITE {*,*> 'Would you like the output to be routed to the'
   97       WRITE {*,*) 'printer or to a file on disk ?  Enter P  or D'
   98       READ '> *ES
   99       WRITE {*,*)
  100       IF ((RES .EQ.  '»>') .OR. {RES .EQ. *p')> THEN
  101         FIL£2»'LPT1'
  102         PGBRKs'T
  103         OPEN (3,FILEsFlLE2>
  104       ELSEIF ({RES .EQ. '0') .OR. (RES .EQ. 'd'» THEN
  105         PGSRK="
  106         WRITE (*,*)  'Please enter desired name of OUTPUT file.'
  107         WRITE (*,*)  '(Include path if necessary.)'
  108         RiAD '> FILE2
  109 1927    IERR2=Q
  110         OPEN (3,FILE=FILE2,IOSTAT=IERR2,STATUS='HEW'>
  111          IF (IERR2 .L£. 0) GO TO 2929
  112         WRITE (*,*)
  113         WRITE (*,*)  'FILE ',FILE2,'  ALREADY EXISTS!'
  114         WRITE (*,*)
  115 1928    WRITE (*,*>  'Should file be  overwritten (Y/N>?'
  116         READ (V(A)'} RES
  117         IF (CRES .E«.  'Y') .OR.  (RES .EQ.  'y'»  THEN
  118           OPEN (3,FlLEsFlLE2,STATUSs'OL»'5
  119           60 TO 2929
  120         fLSEIF CCRES .EQ. 'N'>  .OR.  (RES .EQ. 'n'J> THEN
  121            WRITE {*,*)
  122           WRITE {*,*>  'Enter new name of output  file     --->'
  IS           READ {*,'(A)') FILE2
  124           WRITE {*,*>
  125           GO TO 1927
  126         ELSE
  127           GO TO 1928
  128         ENDIF
  129       ELSE .
  130         WRITE (*,*)
  131          WRITE (*,*>  'INVALID OPTION  -  PLEASE  CHOOSE AGAIN'
  132          WRITE (*,*)  •
  133          GO TO 146
  134        ENDIF
  135  C
  136  2929    PRINT *
  137         WRITE (*,*)  'Please enter desired  name of '//
  138       -              'cost-benefit TABLES"  DATA  file.'
  139          WRITE (*,*)  '{Include path if  necessary.}'
  140          READ (*,'(A)')  FILE7
  141  2927    IERR7=0
  142          OPEN (7,FILE=FIL£7,10STAT=IERR7,STATUSs'NEWrF0RM='UNFORMATTED')
  143          IF (1ERR.7 ,LE.  0) SO TO  1929
  144          WRITE (*,*)
  145          WRITE (*,*)  'FILE '.FILE?,'  ALREADY EXISTS!'
 -146          WRITE <*,*)
  147  2928    WRITE (*,*)  'Should file be  overwritten  {Y/tW
  148          READ C*,'(A}'>  RES
  149          IF {(RES .EQ.  'Y')  .OR.  (RES .EQ.  'y'»  THEN
  150            OPEN (7,F!LE=F!LE7,STATUS='OLD',FOR«='UNFORHATTED'>
  151            GO TO 1929
  152          ELSEIF {{RES .EC.  'N')  .OR.  (RES .EO.  'n')) THEN
  153            WRITE (*,*)
  154            WRITE (*,*>  'Enter new name  of output  file     -•->'
  155            READ (*,'(A)')  FILE?
  156            WRITE {*,*)
  157            GO TO 2927
  158          ELSE
  159            GO TO 2928
  160          ENDIF

-------
ABM.FOR
                              Tuesday Hay 31, 1988  12:00 AM
                                                                                  Page 3
       743
       744
 161  C
 162  1929
 163
 164
 165
 166
 167
 168
 169
 170
 171
 172
 173
 174
 175
 176
 177
 178
 179
 180
 181
 182
 183
 184
 185
 186
 187
 188
 189
 190
 191
 192
 193
 194
 195
 196
 197
 198
 199
 200
 201
 202
 203  123
 204
 205
 206
 207
 208
 209  124
 210
 211
 212
 213
 214
 215  125
 216
 217
 218
 219
 220
 221
 222
 223
 224
 225
 226  126
 227
 228
 229
 230
 231
 232
 233
234
 235
236
237
238
 239
 240
READ(1,743) IYRS,ISY,IEY
REMK1.744} (LIFEC15,1=1,38)
READ(2,743> IYY,ISS,IEE
FORMAT(12,2C5X,I4»
FORMAT(3813)
            WRITE (*,*)
            WRITS <*,*)
            WRITE C*,*>
            WRITE (*,*>
            WRITE <*,*)
            WRITE <*,*)
            WRITE (*,*>
            WRITE (*,*}
            WRITE (*,*)
            WRITE C*,*}
            WRITE (.*,*")
            WRITE <*,*)
            WRITE C*,*)
            WRITE (*,*>
            WRITE (*,*)
YOU WILL NOW SELECT THE POPULATION TO BE ANALYZED'
FOR THE PROJECTED HEALTH BENEFITS OF THE REGULATION,'
THE POPULATION CAN BE COMPOSED OF THE FOLLOWING'
TEH CATEGORIES:'

          0 - PRIMARY MANUFACTURING OCCUPATIONAL'
          1 - SECONDARY MANUFACTURING OCCUPATIONAL'
          2 - INSTALLATION OCCUPATIONAL'
          3 - USE OCCUPATIONAL'
          4 - REPAIR/DISPOSAL OCCUPATIONAL'
          5 - PRIMARY MANUF. AMSIENT NON-OCCUP.'
          6 - SECONDARY MANUF. AMBIENT NON-OCCUP.'
          7 - INSTALLATION NON-OCCUPATIONAL '
          8 - USE NON-OCCUPATIONAL '
          9 - REPAIR/DISPOSAL N0«-OCCUPATIONAL '
            '
WRITE (*,'<6
PAUSE 'Press the  or the  key to continue'
WRITE 
WRITE C*,*) 'YOU HAVE FOUR OPTIONS FOR CHOOSING THE POPULATION'
WRITE (*,*) 'TO BE ANALYZED.  THESE OPTIONS AND THEIR CORRESPOND-'
WRITE (*,*> 'ING REFERENCE NUMBERS ARE THE FOLLOWING:'
WRITE {*,*)
WRITE (*,*) '
WRITE (*,*> '
WRITE (*,*> '
WRITE C*,*) '
WRITE (*,*)
WRITE (*,*)
WRITE (*,*) 'ENTER THE REFERENCE NUMBER OF YOUR CHOICE.'
READ C*,*) IGROUP
WRITE (VC24
IF (IGROUP .EQ. 1} THEN
  NEG=10
  DO 123 1=1, NEG
                                      ALL  CATEGORIES'
                                      ALL  OCCUPATIONAL  CATEGORIES'
                                      ALL  NON -OCCUPATIONAL  CATAGORIES'
                                      USER SELECTED  GROUPS'
              CONTINUE
            END IF
            IF (IGROUP  .EQ.  2}  THEN
              DO 124  1=1, NEG
              CONTINUE
            END IF
            IF (IGROUP  .EQ.  3)  THEN
            NEG=S
              DO 125  1*6,10
                B=!
              CONTINUE
            END IF
            IF (IGROUP  .EQ.  4)  THEN
            WRITE  (*,*)  'HOW MANY  CATEGORIES ARE YOU  INTERESTED  IN?'
            READ (*,*) NEG
            WRITE  (*,*)
            WRITE  <*,*>
            DO 126  1=1, NE6
              WRITE (*,*>  'ENTER CATEGORY  ', !
              READ  {*,*) B(!>
              b< f >*b( i >+1
            CONTINUE
            END IF
            WRITE  
            WRITE  (*,*)  'THIS PROGRAM GIVES YOU THE OPTION OF RUNNING THE'
            WRITE  (*,*}  'MODEL  FOR ALL PRODUCTS, SPECIFIC GROUPS OF PRODUCTS,'
            WRITE  (*,*)  'OR  ANY  INDIVIDUAL PRODUCT.   IF YOU WOULD  LIKE  TO SEE'
            WRITE  (*,*)  'A LIST OF ALL THE PRODUCTS AND THEIR REFERENCE'
            WRITE  <*,*)  'NUMBERS ENTER 1,  IF NOT ENTER 0.'
            READ {*,*)  I
            WRITE  
            IF (I  .EQ.  1) CALL  LIST
            WRITE  (V(24(/))')
            WRITE  <*,*}  'IF  YOU WISH TO RUN THE MODEL FOR ALL THE  PRODUCTS,'
            WRITE  (*,*)  'ENTER  1,  IF ONLY  FOR A SUBSET OF ALL THE  PRODUCTS'
            WRITE  (*,*)  'ENTER 0.'

-------
ABM.FOR                       Tuesday May 31,  1988  12:00  AM                        Page 4


  241       READ (*,*) I
  342       WRITE CVC12C/})'}
  243        IF (I  .EQ.  1) THEN
  244         NP=38
  245         DO 127 N=1,NP
  246           A(H>»N
  247 127     CONTINUE
  248        EISE
  249         WRITE £*,*>'HOW MANY PRODUCT CATAGORIES ARE  YOU  INTERESTED  IN?'
  250         READ  <*,*>  NP
  251         yRITE CVC24
  252         00 128 N=1,NP
  253           WRITE (*,*} 'ENTER THE PRODWCT REFERENCE # FOR PRODUCT  ', N
  254           READ (*,*> A(N)
  255       WRITE (V<35(/»'>
  256 128     CONTINUE
  257         ENDIF
  258       WRITE CV(27{/»')
  259         WRITE {*,*> 'THE DEFAULT DOSE RESPONSE CONSTANTS ARE:'
  260         WRITE {*,*}
  261         WRITE <*,.*} '       LUNG CANCER  » 0.01'
  262         WRITE C*,*> '       HESOTHEUOMA = 0.00000001'
  263         WRITE (*,*>
  264         WRITE (*,*)
  265         WRITE (*,*)
  266         WRITE (*,*) 'DO YOU WISH TO CHANGE THESE CONSTANTS FOR AMY'
  267         WRITE (*,*) 'PRODUCT CATEGORIES?'
  268         WRITE (*,*>
  269         WRITE (*,*) 'INTER  1 IF  YOU WANT TO MAKE CHANCES, AND ENTER'
  270         WRITE (*,*) '0  IF YOU DON"T.'
  271         READ  {*,*}  I
  272         WRITE (VC20 'IN HOW MANY PRODUCT CATEGORIES ARE  YOU INTERESTED'
  275         WRITE <*,*) 'IN CHANGING AT LEAST WE OF THE DOSE RESPONSE'
  276         WRITE {*,*> 'CONSTANTS?  '
  277         READ  <*,*>  I
  278         WRITE <*,'<21
  279         WRITE <*,*> 'RISPOMD TO  THE PROMPTS TO ENTER TH6 REFERENCE'
  280         WRITE <*,*) 'NUMBERS OF  THOSE PRODUCTS HAVING DOSE RESPONSE'
  281         WRITE C*,*> 'CONSTANTS THAT YOU  WISH TO MODIFY.'
  282         WRITE 
  283         DO 2112  N=1,I
  284           WRITE  <*,*) 'ENTER PRODUCT NUMBER ',N, '  THAT HAS A DOSE'
  285           WRITE  (*,*> 'RESPONSE  CONSTANT TO BE CHANGED.'
  286           READ  (*,*)  NPN(N>
  287         WRITE  (*,*)
  288         KITE  (*,*)
  289 2112     CONTINUE
  290         WRITE  C*,'(24(/»')
  291          DO 2113  N-1,1
  292         WRITE  (*,*)  'THE LUMG CANCER DOSE RESPONSE CONSTANT FOR  '
  293         WRITE  (*,*)  'PRODUCT »,NPNCN),' = ',FKL{NPN(N»
  294         WRITE  (*,*)
  295           WRITE  (*,*) 'ENTER 1 IF YOU WISH TO CKANSE THIS, ENTER 0'
  296           WRITE  (*,*) 'IF YOU DON"T.'
  297         READ  (*,*) II
  298         WRITE {*,*)
  299         WRITE <*,*}
  300         IF (II  .Ed.  1> THEN
  301            WRITE  <*,*> 'ENTER THE NEW LUNG CANCER DOSE RESPONSE CONSTANT'
  302           WRITE  (*,*} 'FOR  PRODUCT  ',NPNCN>,' .'
  303           READ <*,*5  FKL(NPN(H»
  304            END IF
  305          WRITE CV(4(/))')
-306           WRITE  (*,*) 'THE  MESOTHELIOHA DOSE RESPONSE CONSTANT FOR'
  307         WRITE (*,*)  'PRODUCT ',NPN(N>,' = ',FKH(NPN{N))
  308           WRITE  (*,*)
  309           WRITE  (*,*> 'ENTER 1 IF YOU WISH TO CHANGE THIS, ENTER 0'
  310           WRITE  (*,*> 'IF YOU DON«T.'
  311            READ (*,*)  IE
  312           WRITE {*,*)
  313           WRITE {*,*)
  314            IF (II .EQ. 1)  THEN
  315           WRITE {*,*} 'ENTER  THE NEW MESOTHELIOMA DOSE RESPONSE '
  316           WRITE <*,*} 'CONSTANT  FOR PRODUCT ',NPN(N5
  317           READ (*,*)  FKMCNPN(N))
  318           END1F
  319          WRITE 
-------
ABM.FOR                       Tuesday May 31,  1988  12:00 AM                        Page 5


  321         WRITE (*,'«(/»'}
  322         ENDIF
  323         URITE<*,'(13 'RATES AS THEIR DECIMAL EQUIVALENTS.  AS  A« '
  341         WRITE (*,*} 'EXAMPLE, A DISCOUNT RATE OF 10% WOULD BE ENTERED'
  342         WRITE (*,*) 'AS .1'
  343         WRITE (*,'<4C/»'>
  344         DO 130 N=1,NN
  345          WRITE C*,'(A,I2)') ' ENTER DISCOUNT RATE f ',N
  346          READ (*,*) DISC(N)
  347 130     CONTINUE
  348         WRITE (*,'{22(/})')
  349         WRITE {*,*) 'WHAT EXPOSED POPULATION CHARACTERIZATION FILE'
  350         WRITE <*,*> 'DO YOU WANT TO USE?  REMEMBER TO INCLUDE THE'
  351         WRITE (*,*) 'DRIVE SPECIFIER!'
  352         READ (*,'CA)') FILE
  353         OP£N(UNlT*4,FILE*FlLE,FORH='FORMATTED',STATUSs'OLD<)
  354         WRITEC*,'C24C/)}'3
  355         WRITE (*,*) 'THE OUTPUT OF THIS RUN IS STORED IN  THE  FILE'//
  356      -              ' NAMED ',FILE2
  357         WRIT1C*,*}
  358         WRITEC*,*)
  359         WRITEC*,*} 'WAIT FOR THE PROGRAM TERMINATED'//
  360      -             ' MESSAGE BEFORE YOU PROCEED.'
  361         WRITE (*,'{13{/))')
  362         CALL INTAt(FILE3,FILE4,FILE2,FILE,IYRS,ISY,IEY,NE6,S,«P,
  363      *  A,FKL,FKH,IYfSI,KN,DISC,PGBRK)
  364 101     FORMAT C1X}
  365 202     FORMAT C10{4f2Q.8/»
  366         READ C4,101}
  367         READ {4,202} MANOP
  368         READ C4,101)
  369         READ (4,202) MANOS
  370         READ (4,101)
  371         READ (4,202) IMSO
  372         READ (4,101)
  373         READ C4,202> USEO
  374         READ (4,101)
  375         READ (4,2023 DISO
  376         READ (4,101)
  377         READ (4,202} MANAP
  378         READ (4,101)
  379         READ (4,202) MANAS
  380         READ (4,101)
  381         READ (4,202) INSA
  382        .READ (4,101)
  383         READ (4,202) USEA
  384         READ (4,101)
  385         READ (4,202) DISA
  -386         READ {4,101}
  387         READ (4,202) PMANOP
  388         READ (4,101)
  389         READ (4,202} PMANOS
  390         READ (4,101)
  391         READ (4,202) PINSO
  392         READ (4,101)
  393         READ (4,202) PUSEO
  394         READ (4,101)
  395         READ (4,2023 PD1SO
  396         READ (4,101)
  397         READ (4,202) PMAHAP
  398         READ (4,101)
  399         READ (4,202) PMAHAS
  400         READ (4,101)

-------
ABH.FOR                       Tuesday Hay 31,  1988  12:00 AM                        Page 6
401
402
403
404
405
406
407
408
409
410
411
412
413 446
414 445
415 444
416
417
418
419 448
420 447
421
422
423
424
425 37
426 36
427 34
428
429
430
431
432 3342
433 3341
434 C
435 C
436 C
437
438
439
440
441 28
442 27
443
444
445 C
446 C
447 C
448
449
450
451
452
453 47
454 46
455
456
457
458 696
459 695
460
461
462 C
463 C
464 C
465
-466
467
468
469 75
470 77
471
472
473
474
475
476
477
478 C
479
480
READ (4,202) PINSA
READ (4,101)
READ (4,202) PUSEA
READ (4,101)
READ (4,2025 PDISA
DO 444 K«1,38
DO 445 1=1,8
DO 446 ,1=1,11
RRR1(JC,I,J)=0.0
RRR2(K,I,J5«0.0
TEH1(K,I,J>=0.0
TiM2(K,I,J>=0.0
CONTINUE
CONTINUE
CONTINUE
DO 447 K»1,2
DO 448 !=1,38
PPP(K,I)«0.0
CONTINUE
CONTINUE
BO 34 K«1,2
DO 36 1=1,28
DO 37 J«1,4
TOT1CK,!,J)aQ.O
CONTINUE
CONTINUE
CONTINUE
DO 3341 1=1,38
DO 3342 ,1=1,20
BPROJ(I,J}=0.0
PROJ(I,J)=0.0
CONTINUE
CONTINUE

!B*BASELIN£/AITERNATIV£ INDEX

00 98 11=1,2
DO 27 K-1 ,5
DO 28 KK*1,5
P{K,IOO«0.0
CONTINUE
CONTINUE
£XP1*0.0 .
CALL DAREAD(POP,RMAX,RLEV,Ii,BPROJ,PROJ,IYRS,PGSRK)

1P=PRCOUCT INDEX NP=NQ. OF PROOUCTSC38)

DO 1 !!P=1,NP
IPSA(I1P)
DO 46 1=1,28
DO 47 J=1,4
RR(1,J)*Q.O
R{I,i)=Q.O
CONTINUE
DO 695 1=1,18
DO 696 J=1,4
TA(I,J)=0.0
CONTINUE
CONTINUE
EX1O.O
SS1«0.0

IG=EXPOSURE GROUP INDEX N5=NUHBER OF EXPOSURE 6RQUPSC105

DO 11 IIG«1,NEG
DO 77 1=1,28
DO 78 J=1,4
TO,J>=0.0
CONTINUE
CONTINUE
IG=B(IIG)
11=0.0
ISH*0
IF UG.EO.S.OR.IG.EO.IQJ !SHsLIFE{IP>
IF CPOP(IP,Jfi).E8.0.) GOTO 11
CALL INIT(RLEV,RMAX,IP,IG,NO,POP,SS1)
AGEMIBsAGEST
J=AGi GROUP INDEX NA=NO. OF AGE GROUPS (9>
DO 5 J=1,9
UTsfOWTCJ N05

-------
ABM.FOR                       Tuesday May 31,  1988  12:00 AN                        Page 7
481
482 C
483
484 2
485
486 C
48?
488 C
489

491
492
493
494 C
495 C
496 C
497 C
498 C
499
500
501
502
503 C
504 C
505 C
506 C
507
508
509
510
511
512
513
514 10
515 C
516 C
517 C
518
519
520 8
521

523
524 11
525
526
527
528
529 1
530
531 98
532
533
534
535
IF (WT.IO.O.) GOTO 5

DO 2 1*1,5
V(!)=0.
VC1)=1.

Ka(90-AGEMlD)/5
IA*5 YEAR IHOEX NT=MAX NUMBER OF TIME PERIODS IN A L!FE(18)

490 00 8 tA=1,N
A0E=( 1 A- 1 >*5+AGEH I 0+2 . 5
lPER=iA+CAaEMID/5}
CALL l«e)*F*(TT-1Q5**3
iF(TT.LE.10-WW!am SOTO 10
FOTH=FDT«- F»l{ IP)*F*(TT- 10-MAXDT )**«
FDTHs5.*FDTH
YEAR=(IA*5}+1984



CALL TRANS! (FDTI,FDTM»P,V»AGE,1PER,PP»WT,OSRWT, NO,
* 1S«,IP,1G,IB,IA,6I,E1,AOEM!D,TA>
CONTINUE

522 5 AGEKID=AGEMID+AGEIKT
CALL AG(T,R,!G,LIFE,!P,E1,EX1)
CONTINUE
CALL AGG(R,TOT1,I6,1P»IB»BPROJ,PROJ,RR,
* EXP1,EX1,1YRS,TEM1,TEH2,D!SC,NN>
CALL PRNT
CONTINUE
CALL TOTAi{TOT1,IB,TT1,EXP1,PGBRK)
COMT1NOE
CALL BANEFF(OISC,TOT1 ,TT1 , IB.NN.RRR1 ,R8S2,PPP,KP,A,
* PG8RK,TE«1,TEK2)
STOP
END

-------
CALC.FOR                      Tuesday Hay 31,  1988  12:00 AM                       Page 1


    1       SUBROUTINE TRANSi{FDTi.,FDTMrP,V,AGE»IPER,PP,WT,0SRWT,NO,
    2      * ISH.tP.IGjIB.SA.GI.EMSEMIDJA)
    3 c
    4       DIMENSION P(5,5},V(S},WC5),OSRWT(4,3},TA<18,4>
    5        INTEGER AGEKID
    6       REAL*8 S,S1,PP,P,T,FMR,AF«R,BFMR,WT,V,W»S2,S3,
    7      * F»TL,FDTM,£1,TA
    8       COMMON /A1/TC28,4>
    9       CALL HFECIPER,FMR,OSRUT,NO>
   10         IF =FDTM
   14        P{1,5)=FMR
   15        J»C1,1>=1.0-(PC1,2>+Pt1f3)+PCl,4>+PC1,5})
   16        IF(P(1»1}.LE.O.ODO) P(1,1)=O.ODO
   17        P(2,2)*1.0
   18        P<3,3)-1.0
   19        P<4,4)=1.0
   20        P(5,5X1.0
   21        GOTO 421
   22   39    P(1,1)=O.ODO
   23        P(1,2>=FDTL
   24        PC1,3)*GI*FDTL
   25        P(1,4)sFDTH
   26        P(1,5)=l.O-CPC1,2>+P(1,3)i-PC1,4)}
   27  421  DO 1 1=1,5
   28       S=0.
   29       S1«0.
   30       DOZJ-1,5
   31       S1-SHP(!,J)
   32 2     SaS+P(J,I}*V(J)
   33       IF(i>ABS(S1-1.0DO).&T..0000001DO) GOTO 99
   34 1     W(I)sS
   35       CALL ACCUK(T,TA,V,W,28,4,2,IPER,FDTL,FOTH,PP,MT,AGE,
   36      * !SH,IPf!G,lB,IA,E1,AGEHID>
   37       DO 3 1=1,5
   38 3     VCI)=W(I>
   39       RETURN
   40 99    yRITE<3»98) 1,{P<1,J>,J=1,5>
   41 98    FORMAT
   42       STOP
   43       END
   44
             45       SUBROUTINE ACCUN(T,TA,V,W,N1,N2,N3,IPER,FBTL,FDTM,F>P,VT,
   46      * AGE,!SH,!P,IG,IB,IA,E1,AGEMID>
   47 C    THIS SUBROUTINE ACCUMULATES DATA.  ALL 6ROUPS  ARE ADDE8  TOGETHER.
   48 c
   49       REAL*8 PP,S1,T,WT,V,W,FDTL,FOTK,E1,TA
   50       DIMENSION T{N1,N25,VC5),W(5),TAC18,4>
   51       IKTE6ER IK<4),AGEH!D
   52       DATA IK/2,3,4,5/
   53        RIA»(IA-1)*5.+2.5
   54        R1SH=ISH
   55        IFT=CRISH/5.+.53
   56        MIPER=IA+IFT
   57        SAGE=ASEMtD
   58        tAGE=(A6E+2.5)/5.
   59       DO 1 K=1,4
   60       S1=(WUKOO)-V(!K
   64  1      CONTINUE
   65       RETURN
   66       END
   67 e
   68 c
   69        SUBROUTINE ASCT,R,IG,LIFE,IP,E1,EX1>
   70 c
   71           DIMENSION T(28,4},R(28,4),
   72      *   LIFIC38)
   73        REAL*8 A3,A2,R1,R2,R,T,E1,EX1
   74          !F(IG.NE.4.AND.!G.NE.9> GOTO 10
   75          «=LIFE(IP)
   76        RN=N
   77          DO 20 H=1,4
   78          DO 30 1=1,28
   79          DO 40 J=1,N
   80          K«(

-------
CALC.FOR                      Tuesday Hay 31,  1988  12:00 AM                        Page 2


   81          IF (J.LE.5)               RJ=J
   82          IF (J.GT.S.AND.J.LE.IO)  R4=J-5
   83          IF (J.GT.1Q.AND.J.LE.15) RJ=J-10
   84          IF (J.GT.15.AND.J.LE.203 RJ=J-15
   85          IF (a.GT.2Q.AND.J,LE.25) RJ=J-20
   86          IF (J.GT.25.AND.J.IE.30) RJsJ-25
   8?          IF (J.fiT.3Q.AND.J.LE.35) RJ=J-30
   88          IF (a.GT.35.A».J.L£.40> RJ=J-35
   89          IF tJ.GT.40.AND.J.L£.45} RJ=J-40
   90          IF «R
  133  78     CONTINUE
  134         IF(BPROJC!P,D.EQ,0.0)  GOTO  999
  135          «NN=NM+1
  136         IFUB.EQ.2) GOTO 99
  137         DO 37 J»1,NNN
  138         DO 36 1=1,4
  139         DO 38 K=1,IYRS
  140         IF(J.LT.HNN)  '
  141      *  TEM1{IP,!,J)sTEMlaP,I,J)+«BPROJ{IP,IC>/BPROJ+
  144      *  (CBPROJ(IP,K)/8PROJ{IP,1))*SU)>
  145  38     CONTINUE
 -146  36     CONTINUE
  147        DO 22 1=5,7
  148        11=1-4
  149        TEM1UP,J,J}=TEM1(!P,!l,J)*CRUn
  150  22    CONTINUE
  151        TEM1{IP,8,J>«TEM1(IP,1,J)*CR<1>+TEK1
  152      * +TEM1(IP,3,J}*CRC3)
  153  37    CONTINUE
  154        GOTO 95
  155  99     CONTINUE
  156         DO 57 J=1,NNN
  157         DO 56 1=1,4
  158         DO 58 Ks1,IYRS
  159         IF(J.LT.NNN) TEH2(IP,I,J)=
  160      *  TEM2(IP,1,J>+«BPROJ(IP,IC)/BPROJ(1P,1))

-------
CALC.FQR                      Tuesday May 31,  1988   12:00 AM                        Page 3


  161      *  *S(1)*C1.0DO/(1.0WN-DISC(J»**K5)
  162         IF(J.EQ.NNN)  T£K2(IP,l,J)=TEH2(!P.f,J}+
  163      *  CCBPROa<;tP,IC}/BPR04(!P,1)}*S{I»
  164  58     CONTINUE
  165  56     CONTINUE
  166         DO 52 1=5,7
  167         IIsJ-4
  168         TE«2UP,l,J>~TIM2*CR(tn
  169  52     CONTINUE
  170         TEM2(IPr8,J>=TiM2CtP,1,J)*CRC1H"TEM2aP,2,4>*CR{2)
  171      *  +TEM2(lP,3,J}*CRa>
  172  57     CONTINUE
  173  95     CONTINUE
  174  999    CONTINUE
  175        DO 10  M»1,4
  176        DO 20  1*1,28
  177        DO 30  Js1,K
  178        K="TOT1(!8,I,M)+«A3*R1)+(A2*R2))
  194        RR(I,M5=RR{I,M}+{{A3*R1)+(A2*R2))
  195  30    COMTINUE
  196  20    CONTINUE
  197  10    CONTINUE
  198         DO 50 J=1,M
  199         IF(BPROatIP,1).6T.O.O) EXP1s
  200     *   IXP1+{BPROJ{IP,J)/BPROJCIP,1}*EX1)
  201   50    CONTINUE
  202        RETURN
  203        END

-------
FILE.FOR                      Tuesday Hay 31,  1988  12:00 AM                        Page 1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52

e






396

397
*

797
*


40

434
30


398

399
*



60

50




80
70



100
90

200

BO
220
210


SUBROUTINE FILE(IB,BPROJ,PROJ,IYRS,PSBRK>

DIMENSION 8PROJ<38,20>,S(2,38,20),PROJ(38,ZO)
CHARACTER PGBRK
IF(IB.£Q.2> GOTO 200
WRITE (3,*)
WRITE (3,*)
WRITEC3.396) PGBRK
FORMAT(A,32X,' INPUT DATA 5',//)
WR!TE(3,397)
FORMAT (1 OX, 'iase line Indexes for the 38 Products over 20
'Years')
WRITE(3,797)
FORMATC1X.' ',
' ',//)

R£Af>(1,4Q) (S(1,J,K),J=1,38)
FORMAT C38(F4.2,1X))
WRITE (3,434) (S(1,J,K),J«1.58)
FORMAT(30(F4.2,1X),/,8CF4.2,1X»
CONTINUE
WRiTE{3,797)
WRITE (3,398) PfilRK
FORMAKA.32X,' INPUT DATA 6',//)
WRITE(3,399)
FORMATdOX, 'Regulatory Alternative Indexes for 38 ',
'Products over 20 Years')
WRITE {3,797}
DO 50 K«1,IYRS
READ(2,60) (S(2,J,K},J=1,38)
FORMAT (38(F4.2,1X))
WRITE (3,434) (SC2,J,K),J=1,38)
CONTINUE
WRITE (3,797)
DO 70 1=1,38
DO 80 J=1,IYRS
BPR04(I»J)=S(2fI,J)
CONTINUE
CONTINUE
DO 90 1*1,38
DO 100 J=1,IYRS
PROJ(I,J)=S(1,1,J)
CONTINUE
CONTINUE
GOTO 210
DO 220 K*1,38
DO 230 Ls1,IYRS
BPROJ(K,L)=PROJ(K,L)
CONTINUE
CONTINUE
RETURN
END

-------
INDATA.FOR                    Tuesday May 31, 1988  12:00 AM                        Page
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
m
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80

c

SUBROUTINE DAREAD(PQP,RMAX,RL£V,lB,BPRQJ,PROJ,lyRS,P68R!O

COMMQN/T7MANQP, HANDS, INSO.USEO.DISO, MANAP, MAMAS, INSA.USEA,
*01SA,PMNOP,PMANOS,PINSO,PUSEO,P0ISQ,PKANAP,PMANA$,PiNSA,"
*PUSEA,PDISA



CHARACTER PGBRK
DIMENSION RPOPC38, 10>,BPR04(38,20) ,REXP(38, 10)
DIMENSION RMAX(38,10),POP{38,10),RLEV<38,10),PROJ<38,20>.
*MANOPC3S>,MANOSC38>,INSO(38>,US£OC38),t>ISCIC38>,MA«AP{38)/
* NANAS(3S), INSA(38),US£A(38},DISA(38),PMANOPC38),PHAIIQS{38>,
* PINSQ(38},PUSEO<38},POISQ<38),PMANAH38)rPKANASC38),
* P!NSA(3S),PUSEA<38),P0ISA<38>













69




67
66


c
c

IQUIVALENCE(REXP{ 1,1) ,MANOP( 1 ))
EQUI VALENCE{RPOP{ 1,1) ,f>MANOP{ 1 ) )
CALL FILE(IB,8PROJ,PRO,I,IYRS,PGBRIO
S1-0.0
DO 66 1=1,38
00 67 ,1=1,10
!F(RPOP(1»J).EC.O.}SOTO 69
POP{I,J)«RPOP(I,J)*iPROJ{I,1)
IF(POP(I,J>.EQ.O.) GOTO 69
S1=S1+POP(I,J)
RMAX(I,J>=1.0
RLEV(I.4)=REXP{I,J)
GOTO 67
CONTINUE
POP(I,J)*O.Q
Rf.EV{I,J)«0.0
RNAXU,J)=0.0
GOTO 67
CONTINUE
CONTINUE
RETURN
END


SUBROUTINE IN!T(RLEV,RMAX,IP,!G,NO,POP,SS1)
C THIS SUBROUTINE DEFINES THE PRODUCT-GROUP SPECIFIC PARAMETERS
C
US6D IN THE SIMULATION.
C FalHTENSITT OF EXPOSURE, 8B=EXPOSU8f AS OF 1985,
C MAXDI=MAX DOSE ASSUMED, V« INITIAL STATE VECTOR,
C













c
c




«
*
*
*
*
#
*
*

it
*
*
*
*
*
*
*



DIMENSION RLEVC38,10),POP(38,10),RKAX<38.10}
REAL*8 PP
INTEGER IOCC(10)
COMMON /01/ F,MAXDT,PP
DATA IOCC/1, 1,1, 1,1,2,2,2,2,27
F«RLEVCIP,IG)/2600.
HAXDTaRHAX(IP,IG}
PP=POF»(IP,16)
SS1=SS1+PP
NO=IOCCC1G)
IF(IP.EQ.12,AND.IS.E0.9) N0=3
RETURN
END


SUBROUTINE INC(OSRWT,FOIE,NO,AGE,IPER,IY)
DIMENSION OSRWT(4,3),FEGC18,4)
REAL FDEG<18,4),FNE6C18,4)
DATA FDEG/
0. ,0. ,0. , .5,1 .0,3.0,9.0,33.5,93,0,247,5,489.5,802.0,
1330.5, 1797.5, 2283.0,26§2.5, 2300. 5, 1700ls,
0.5,0.5,0.5,0.5,3.5,3.0,19.5,54.5,198.0,453.0,872.0,
1328.5,1775.5,1857.5,2358.0,2351.0,1618.5,1264.0,
O.,0,,0., 0.5, 0.5, 1.5, 5. 0,18.0,54. 5, 114.0, 191.5, 277.0,
383.5,400.0,410.5,429.5,402.5,394.0,
O.,0.,0., 1.0, 0.5,3. 0,6. 5, 26. 0,82. 0,131. 0,236.5, 290.0,
348. 0,321. 5,402. 0,404.5, 228.5,254.07
DATA FNES/
O.,0.,0.,. 5,1., 3., 9. ,33. 5, 93., 247.5, 518.9,850.1,
1712. 4, 2313.4, 2938. 2,3388,, 2960. 8, 2188. 6,
. 5, .5, .5,. 5,3.5,3. ,19.5, 54.5, 198. ,453., 924.3,
1408.2, 2285., 2390.6, 3034. 8,3025 .8,2083., 1626.8,
O.,0.,0... 5,. 5, 1.5, 5. ,18., 91. 1,190. 6,320. 1,463.,
641., 668. 6, 686. 1,717.8, 672. 7,658. 5,
Q.,0.,0.,1,,.5,3.,6.5,26.,137.,219.,395.3,484.7,
581 .7,537.4,671. 9,676.1, 381.9,424.67
mif, =0.0
DO 190 1*1,4

-------
INDATA.FOR                    Tuesday May 31, 1988  12:00 Ml                        Page 2


   81        IFCIY,EQ,1977)  FESCIPER,!>=FDE6C»>£R,t}
   82        IF(IY.EQ.1990>  FEG(IPER,I)»FMEG(IPER,I)
   83          FD1E=FOJE+FEG(IPER.I)*OSRWTU,KO)
   84   190    CONTINUE
   85          RETURN
   86          END
   87  C
   88  c
   89        SUBROUTINE  UFEUPER,FMR,QSRWT,MO>
   90        REAL*8 FMR
   91        DIMENSION OSRUT<4,3)
   92        REAL GMR{18,4>
   93        DATA GMR/
   94       * 1708.5,192.0,212.5,729.0,950.0,836.5,821.0,1096.5,1698.5,2825,5,
   95       * 4627.0,7200.0,11690.0,17182.0,26169.5,40523.0,57987.5,90208.5,
   96       *3212.8,258.,269.5,725.,1383.,1910.,2075.5,2804.,3965.,5504.,
   97       *8121.,11554.,16800.5,18976.,30980.5,43252.,44930.,56430.5.
   98       *1314.S,128.,125.,276.,296.5,307. ,391.5,578.,958.5 1548.5,2400.5,
   99       *3631.,5720.,8163.5,13173.,23016.5,37474.5,70198.5,
  100       *2652.9,171.5,140.,314.,495.5,658.5,828.,1280.5,2020.5,2998.5,
  101       *4572.5,6537.5,9475.,10880.5,21493.,32254.,31325.,43367,5/
  102        IF(IPER.GT.18>  IPER=18
  103        F«R=0.
  104        DO 1 K=1,4
  105  1     FMRsFHR+GKR(lPER,K)*OSRWTCIC,KO)/1.0E5
  106  C    MAKE CERTAIN FMR ttON ZERO
  107        FHR=DMAX1{FMR,O.ODO)
  108        RETURN
  109        END

-------
TABIES.FQR                    Tuesday May 31,  1988  12:00 AM                        Page 1


    1         SUBROUTINE !NTAB
    3 c
    4         REAL FKl<38},FKM(38),OI
    5         REAL*8 DISC<10)
    6         INTEGER IYRS,ISY,I£Y,IGROUP,BaO),MP,AC38),l¥,NN
    7         CHARACTER P6BRK
    8         CHARACTERS  F1LE,FILE2,FILE3,F!1£4,PRO£X38}
    9         CHARACTER*45  GRDUPdO)
   10         yR!TE(3,10) PGBRK
   11  10     FQRMAKA.32X, 'INPUT  DATA 1',//)
   12         WRIT£C3,20)
   13  20     FORKAT(30X, 'Scenario Modelled'}
   14         HRITE{3,30)
   15  30     FORMATC1X,' _ '
   18  40     FORMAT (6X, 'DATA FILES',//}
   19         WRIT£{3,50)  FILE,FILE3,Fai4,FILE2
   20  50     FORMAK9X, 'Exposure Data', 25X,A25,/,9X,
   21      *  'Baseline Product  Indexes', 14X,A25,/,9X,
   22      *  'Product  Indexes with  Regulation', 7X,A25,/,9X,
   23      *  'Output File'f27X,A25,///>
   24         WR!T£{3,60}
   25  60     FORKATC6X/T1ME PERIOD FOR ANALYSIS',//)
   26         HRJTE<3,70}  IYRS,ISY,IEY
   27  70     FORMATC9X, 'Number  of Years ',25X, 14, /,9X,
   28      *  'Start Year',28X,I4,/,9X,'End Year', SOX, I4,//}
   29         WRITE{3,303
   30         WR1TE{3,80)  PfiiRK
   31  80     FORMAT (A, 32X,' INPUT DATA 2',//}
   32         WR1TEC3,90)
   33  90     FORMAT C25X,' Exposure Groups Analyzed'}
   34         WR1TE(3,3Q}
   35         CALL GR(GROUP)
   36         DO  100 1=1, NEC
   37         yR!TE(3,11Q> GROUP
   38  110     FORMAT(15X,A45,/}
   39  100     COKTIHUI
   40         WRITE<3,30>
   41         WRITE(3,120} PBBRK
   42  120     FORHATCA,32X,' INPUT DATA 3'.//>
   43         yRITE<3,130>
   44  130     FORMATC12X, 'Products Analyzed and their Dose-Response',
   45      *  ' Parameters')
   46         WR!TEt3,30)
   47       WRITE<3,140)
   48  140   FORMATC1X, 'PRODUCT', 20X, 'LUNG  CANCER', 4X,'MESOTHEHOMA'
   49      * 3X,'YEAR FOR', 3X, 'RATIO OF')
   50       WR!T£<3,15>
   51  15   FORKAT{27X,'60Si-RESPONSE',2X,'DOSE-RESPONSE',2a<,'8ASELI«E',
   52      * 3X,'G1 CANCER'')
   53       WRIT! (3, 160)
   54  160   FORMATC27X,' CONSTANT ',5X,' CONSTANT ',SX,' LUNG',6X,
   55      * 'TO  LUHG')
   56       WRITEC3.170)
   57  170   FORMAK57X, 'CANCER', 5X^ 'CANCER')
   58       WRITE{3,175)
   59  175   FORMAK68X, 'RATIO')
   60       URITE(3,30)
   61        CALL PR(PROO)
   62       DO 180 1=1, NP
   63  '     WRITE(3,190) PROD(A(I)>,FKL
-------
 TABLES.FOR                     Tuesday «ay 31,  1988  IZsOO AM                        Page 2


   81  e
   82         SUBROUTINE  SRCGROUP)
   83         CHARACTER*45  GRDUPC105
   84         GROUP(1)='PRIMARY MANUFACTURING-OCCUPATIONAL'
   85         GROUP(2)='SECONDARY MANUFACTURING-OCCUPATIONAL'
   86         GIOUP(3>»'INSTALLATION-OCCUPATIONAL'
   87         GRQUP{4>s'USE-Q€CUPATIQNAL'
   88         GRQUP(5}«'REPAIR/DISPOSAL-OCCIIPAT10NAL'
   89         GROUP<6>='PRIMARY HANUFACTURIN6-NON-QCCUPATIONAL'
   90         GROUPC7)='SECONDARY KANUFACTURING-NON-OCCUPAT1QKAL'
   91         GROUP(8>='INSTAILATION-NON-OCCUPAT10NAL'
   92         <3ROUP(9}s"USE-NQIi-OCCUPATIONAL'
   93         SROUP{10}-'«iPAlR/D!$POSAL-NON-OCCUPATIONAL'
   94         RETURN
   95         END
   96  c
   97  c
   98         SUBROUTINE PR(PROD)
   99  c
  100         CHARACTER*25 PROD(38>
  101         PR00<1>='COHHERCIAL PAPER'
  102         PROD<2)»'ROLLiQARB'
  103         PROD{3)*'H!LLSQARD'
  104         PROD{4>*'PIPELINE WRAP'
  105         PROD(5>-'BEATER-A6D GASKETS'
  106         PROD(6}»'HGH-6RD  ELECTRICAL PAPER'
  107         PROD(7)='ROOF!NG  FELT'
  108         PROD(8>='ACETYL£NE CYLINDERS'
  109         PRODC9}»'FLOORING FELT'
  110         PROO(10)='CORRUGATED PAPER'
  111         PRCCK11}»'SPECIALTY PAPER'
  112         Pf?00(12)='V/A FLOOR TILE'
  113         PROD(13>='DIAPHRAGMS'
  114         PRCO(14)«'A/C PIPE'
  115         PROD(15}='A/C FLAT SHEET'
  116         PROO(16)s'A/C CORRUfiATEO SHEET'
  117         PROD<17)»'A/C SHINGLES'
  118         PROD(18>«'DRUM BRAKE LIN. NEy
  119         PROD(19>='DISC BRK PAflS.LV.NEW
  120         PROOC20)"'DISC BRK PADS,HV
  121         PROO(21)='BRAKE BLOCKS'
  122         PROO(22)='CLUTCH FACINGS'
  123         PROD(23)»'AUTO. TRANS. COMP.'
  124         PROO(24)*"FRICTION MATERIALS'
  125         PROD{25)='ASB PROTECT. CLOTH'
  126         PROD(26)B'ASB THRO, YARN ETC'
  127         PRCOC27)«'SHEET GASKETS'
  128         PRCO{28>s'ASBESTOS PACKINGS'
  129         PROD{29}='ROOF COATINGS ETC'
  130         PROD(30)=«'OTHER COAT. & SEAL.'
  131         PROOai}='ASB REINF.  PLAST.'
  132         PROD<32)='KISSSLE LINERS'
  133         PROD<33>='S6ALANT TAPE'
  134         PRODC34>*'BATTERY SEPARATORS'
  135         PROD(35)s'ARC CHUTES'
  136         PROD(36)s'BRH BRK LIN.,OLD'
.  137         PRQD(37}='DiSC BRK PADS,LV,OLD'
  138         PROD(38)='HININQ/MILLING'
  139         RETURN
  140         END
  141 c
  142 c
  143       SUBROUTINE PRNT(R,RR,N1,N2,«,IP,TA,SS1,1Y8S,IB.PPP,DISC,
  144      * NN,RRR1,RRR2)
  145 C     THIS SUBROUTINE AGGREGATES AND PRINTS THE  DATA ASSEMBLED
 -146 C       IN THE ACCUM SUBROUTINE
  147 C
  148       REAL*8 S1,S2,RT,R,RR,RRT,TA,TTA,AVA,CRrCRRT,CRT,TRT,TRRT
  149        RtAL*8 CTRT,CTRRT,PPP,RRR1,RRR2,DISC,SST,SS
  150        DIMENSION CR(4>,CRRT{4),CRT(4),PPP{2,38)
  151        DIMENSION RRR1{38,8,11},RRR2(38,8,11}»DISC(10),SST{113
  152        DIMENSION 85(4,11}
  153       DIMENSION R{28,4},RT(4},RR(28,4},RRT(4>,Tft(18,4),TTA(4),AVA(4)
  154        DATA CR/1.09,1.56,1.02,1.0/
  155         TRTsO.
  156         TRRT=0.
  157         CTRT=0.
  158         CTRRT=0,
  159         00 57 [Bl.11
  160         SST(I)"0.a>0

-------
TABLES.FOR                    Tuesday Hay 31,  1988  12:00 AH                       Page 3


  161  57     CONTINUE
  162         DO 59 J=1,4
  163         DO 61 J«1,11
  164         SSCI,J)=O.ODO
  165  61     CONTINUE
  166  59     CONTINUE
  167       DO 3 K=1,«2
  168       S2=0.
  169       S3*0.
  170       BO 4 1*1,28
  171        N«1+NN
  172        DO 27 KK-1,H
  173        IF(KK.EO.N) SS=SSCK,KK>-KRRa,IO*a.ODQ7C1.0DO+
  175      *  D!SC{KIO)**sRT(iO*CRCK}
  180  3      CONTINUE
  181         DO 88 K«1,3
  182         TRT>=TRMiiT{K)
  183         CTRTsCTRT+CRTCK)
  184         DO 89 BC«1,N
  185         $ST{KK)«SSTCKK)+$$(K,KK>
  186  89     CONTINUE
  187  88     CONTINUE
  188        DO 6 K*1,4
  189        S4=0.
  190        DO 7 1=1,18
  191  7     S4=S4+TA(I,K)
  192  6     TTA(K)=S4
  193        DO 8 K=1,4
  194        S5*0.
  195         !F(TTA(1O.I.E.0.0001) GOTO 8
  196        DO M 1*1,18
  197  14    S5=S5+TA{I,K}/TTACK)*CI*5-2.55
  198   8    AVA{K>aS5
  199         Pf»P{IB,IP)=SS1
  200         IFaSSC!,d)
  204  49     CONTINUE
  205         RRR1
  222  71      CONTINUE
  223         RRR2{!P,8,J>sss(1,J>*CR{1}+SS{2,J)*CRC2>+SS<3,J>*CRa>
  224  67     CONTINUE
  225   99      CONTINUE
 -226      RETURN
  227      END
  228 c
  229 e
  230       SUBROUTINE TOTAL(TOT1, !S,TT1,EXP1,f»6BRIO

  232 C      THIS SUBROUTINE PRINTS TOTALS FOR ALL PRODUCTS
  233 c
  234         REAL*8  TOT1,TT1,EXP1,TD,TC,CR,TTD,TTC,TNP
  235         CHARACTER  P6BRK
  236         DIMENSION  TOTU2,28,4),TO(28>,TCC28},CR{4),
  237      *  TT1(2,43
  238          DATA CR/1.09,1.56,1.02,1.007
  239          TTD=0.
  240          TTC=0.

-------
TABLES,FOR                    Tuesday May 31,  1988  12;00 AH                        Page 4
241
242
243
244
245 7
246
24?
248 1
249
250
251
252 20
253 10
254
255
256
"257
2S8 43
259 42
260
261
262
263 44
264
265
266 48
267
268
269 95
270
271 62
272
273 46
274 96
275
276 63
277 47
278
279 30
280
281
282 64
283
284
285 65
286
287
288
289 50
290 60
291
292 76
293
294 70
295
296
297
298 c
299 c
300
301
302 c
303
304
305
.306
307
308
309
310
311
312
313
314
315
316
317
318 444
319
320
TNF>=0.
DO 7 1=1,28
TO(U=0.
TC(I>*0.
CONTINUE
DO 1 1*1,4
TT1{IB,I)sO.O
CONTINUE
DO 10 K=1,4
DO 20 J*1,28
TT1(IB,K5*TT1(IB K)+TOT1(I8 J K)
CONTINUE ' ' '
CONTINUE
DO 42 J«1,28
00 43 K=1,3
Tft(J}«TDCJ)+TOT1CIB J iO
TC(4>=TC{J>-KTOTlaB,J,K}*CR(K»
CONTINUE
CONTINUE
DO 44 K=1,3
TTDsTTO+TT1CIB,K)
TTC^TTC+CTTIOB I0*CR(K))
CONTINUE
DO 48 K»1,4
TNP=TNP+TT1C!B,IO
CONTINUE
IFUB.EC.1} GOTO 46
WR1TEC3,95) PGBRK
FORHAT(A,32X, 'OUTPUT DATA 2',//>
«RITEC3,62)






























FQRMAK25X,' Totals for All Products- Baseline 'Jin
GOTO 47
yR!TE(3,96) PGBRK
FORMAT (A,32X, 'OUTPUT DATA 1 ',//)
URITE<3,63)
FORHATC25X,' Totals for All Products - Alternative',///}
CONTINUE
WRITE(3,30>
FORMATC1X,' '.
* ' './/)

FORKAT(1X,'TI«E SI«CE',3X,'LUNG CANCER', 5X, 'G.I. CANCER', 5X
* 'MESOTHEL10MA',3X,'ALL EXCESS', 5X, 'ALL EXCESS')
WR!TE(3,65>













FORMAT(1X,'EXP. ONSET', SIX, 'CANCER DEATHS ',2X,' CANCER CASES' 5
DO 50 1=1,28
!1*U«15*5
12-11+5
HRIT£<3,60) • I1,!2,(TOTUIB,I,J>,a«1,3-),TD(l)fTC(t)
FORMAT(l4,'-',I3,3F16.5,2f15.5>
W?ITE{3,76)
FORMATC1X,/)
WITi{3,70) CTT1(IB,J),J»1,5),TTO,TTC
FORMATC TOTALS ',3F16.5,2f 15.5,///)
WR!TE(3,30)
RETURN
END


SUBROUTINE IANEFF,
* TT1{2,4),DIF1(28,4),ODC28),OC{28},CR(4),TfM1{38,8,11},
* DT1{4>,PPPC2,38),DIFP(38,85.TRRR(8),TEM2(38,8,11},
* DIS<10,5),RRR1(38,8,11),RRR2<38,8,11),DIFT<38,8),TRRHC8>
REAL*8 TOT1,TT1,01F1,DD,OC,TDD,TDC,CR,DIFT,TRRK,
* D1S,D1$C,EXP1,RRR1,RRR2,PPP,DIFP,TRRR,TEM1,TEM2
INTEGER A(38>,NP
CHARACTER PGBRK
CHARACTER*25 PRODC38)
DATA CR/1. 09, 1.56, 1.02, 1.00/
N=1+NN
DO 197 K=1,K
DO 444 1=1,8
TRRRU)=Q.0
TRRM(I)=0.0
CONTINUE
DO 200 1=1,38
DO 210 J=1,8



































-------
TABLES. FOR                    Tuesday Hey 31,  1988  12:00 AM                        Page 5


  321         D1FP(I,J)*O.ODO
  322         DIFTU,J>=O.ODQ
  323         DIFT{i,J>=TEM2a,J,fQ-TEM1(l,J,P
  324         DlFPCI,J}=RRR2U,J,iO-RRRla,.l,P
  325  210    CONTINUE
  326  200    CONTINUE
  327         DO 445 1=1.8
  328         00 446 J*1 ,38
  329         TRRR{!>*TRRR{l)-H>IFPCJ,I)
  330         TRR«CI}STRRM{I>+DIFT{J,I}
  331  446    CONTINUE
  332  445    CONTINUE
  333         CALL PR(PROD)
  334         IF*100.
  336         DO 320 JJ*1,4
  33?         IF   PGBRJC
  353  47     FORNAT
  354         WRITE (3 ,471} RR
  355  471    FORHAK3X, 'Cancer  Deaths Avoided by  Product',
  356      *   '  Discounted from  Time  of Exposure at  ',F5.1,'%')
  357         GOTO 340
  358  840    WRITE(3,48>  PGBRK
  359  48     FORMAT(A,32X, 'OUTPUT DATA 4A',//J
  360         WRITi<3,472) RR
  361  472    FORHAT{3X,' Cancer  Cases Avoided by Product',
  362      *   '  Discounted from  Tfroe  of Exposure at  '.F5.1 ,'%')
  363  340    WRITE(3,250)
  364  250    FORMATC1X,' _              •
                                                         -
                _, _                             .
 366         URITE(3,260)                        '
 367  260    FORHATC8X,' PRODUCT NAHE'.SX, 'LUNG CANCER ',2X,'GI CANCER',
 368      *  2X,'HESOTHEUOKA',2X, 'TOTAL CANCER' //)
 369         1FCJJ.E0.1.0R.4J.E8.3) ILOW=t
 370         IF(JJ.Ea.1.0R.JJ.E0.3> !«IGH=4
 371         IF(JJ.E<3.2.0R.JJ.EQ'.4) ILOWS
 372         IF(JJ,Ea.2.0R,JJ.EQ.4) !HIGH»8
 373         JFCJJ.Ea.1) WRITE <7) CDIFPd.IHIGH), 1=1,38), TRRRCIHIGH)
 374         1F WRITE (7) {D!FP{I,lHJGH),Tst,38)JiRR{IHI6H)
 375         1F(JJ.EQ.3) WRITE (7> (DIFT(I,tHIGH),i=1,38),mRH(lHIfi«)
 376         IFCJJ.EQ.4) WRITE (7) CDIFT(I,IWIGH),I=1,38),TRRM(IH1G«>
 377         DO 290 1*1, HP
 378         fpsA(l)
 379         SF{JJ.EQ.1.0R.JJ.E0.25
 380      *  WRITE{3,280} PROD(IP>,{OIFP{IP, J>, J=1LOW,IHIGH>
 381         IF{JJ.EQ.3.0R.JJ.E0.4)
 382      *  WRITE(3,280) PROOCIP),{DIFT(IP,J),J=ILOy,IHIGH)
 383  280    FORMAT(3X,A2S,F10.S,3X,F10.5,1X,F10.5,4X,F10.5>
 384  290    CONTINUE
 385    •     URITEC3,300)
 386  300    FORMAT (3X,//>
 387         IF(JJ.EQ.1.0R.JJ.EQ.2)
 388      *  WRtTE<3,310) {TRR8(I},Is!LOM,IHlGH)
 389         IF(JJ.E0.3.0R.JJ.Ea.4>
 390      *  WRITE{3,310> 

-------
TABLES,FOR                    Tuesday May 31,  1988   12:00 AH                        Page 6


  401  405    TORMATC12X,'PRODUCT', 12X,'NUMBER OF PEOPLE',//)
  402         DO 415 1=1,NP
  403         IP=ACD
  404         WRIT£<3,425) PROO(IP),PPP(2,IP)
  405  425    FORMAT(3X,A25,3X,F10.0)
  406  415     CONTINUE
  407         WR1TE(3,250)
  408         TDD-0,
  409         TDC*0.
  410         00 24 1=1,28
  411         DD<1)=0.
  412         DCU)*Q.
  413  24     CONTINUE
  414         DO 6 1*1,UN
  415         00 5 J=1,5
  416         DISCI,J)*Q.OQ
  417  5      CONTINUE
  418  6      CONTINUE
  419         DO 10 1=1,28
  420         DO 20 J=1,4
  421         DIF1U,J)={TOT1<2,I,J)-TQTlCl,I,a)5
  422  20     CONTINUE
  423  10     CONTINUE
  424         DO 50 J=1,4
  425         OT1CJ)=crm2,J}-rri<1,J»
  426  50     CONTINUE
  427         DO 76 1=1,28
  428         DO 77 K-1,3
  429         DD(l)=DD(I)+DIF1CI,K)
  430         DC{I)sDC(I)+{!>IF1(!,K)*CRCIO)
  431  77     CONTINUE
  432  76     CONTINUE
  433         DO 79 K*1,3
  434         TDD*TDD*DT1CK)
  435         TDC-TDC+{DT1(K)*CR(O)
  436  79     CONTINUE
  437         DO 55 K=1,NN
  438         DO 70 J=1,3
  439         DO 80 1*1,28
  440          DISCK,J}=DIS{K,J)+DIFUI,J5*(1.DO/(1.DO+DISCPCI>*{1.0DO/(1.tJeW)lSC{K»**CI*5-3})
  447          DIS{K,5)=D!SCK,5)+OC(!}*(1.QDO/C1.DQ+D!SCCK»**{ 1*5-3})
  448  83     CONTINUE
  449  56     CONTINUE
  450         WRITEa,437) PSBRK
  451  437    FORMAT(A,32X,'OUTPUT DATA 6',//>
  452         WRITE(3,120>
  453  120    FORMAT{15X,(Cancers Avoided for  Alt Products  fay  Time Period')
  454         WRITK3.250)
  455          yRITE{3,87)
  456  87      FORHATCIX.'TIME SINCE',3X,'LUNG CANCER',3X,'GI  CANCER',
  457.     *  3X,'MESOTHELIOMA',3X,'ALL EXCESS',3X,'ALL  EXCESS')
  458          URITEC3.88)
  459  88      FORMAT<1X,'START OF',46X,'DEATHS',7X,'CASES')
  460          yR!TE{3,489>
  461  489    FORMATC1X,'ANALYSIS',//)
  462         DO 130 1=1,28
  463         !1=*5
  464         I2=11+5
  465  130     WRITE(3,140> I1,l2,
-------
TABLES.FOR
                              Tuesday May 31,  1988   12:00 AM
Page 7
481
482
483
484 c
485 c
486
487 C
488 C
489 C
490 C
491 C
492
493
494
495
496
497
498
499
500
501
502
503
504
505
506
507
508
509
510
511
512
513
514
515
516
HR!TE<3,250)
RETURN
END


SUBROUTINE LIST

THIS SUBROUTINE LISTS TO THE SCREEN THE
ASSOCIATED REFERENCE NUMBERS.


MRITE{*,*> ' List of Products and Their
WRITEC*,*)
WRITEC*,*) ' 1-COM«ERCIAL PAPER
WRITE(*,*) ' 2-80LLBQARD
HRITEC*,*) ' 3-MILLSOARD
WRITEC*,*} ' 4-PIPELINE WAP
WRITEC*,*) ' 5-8EATER-ADD CASKETS
WRITEC*,*} ' 6-HGK-fiRD ELECTRICAL PAPER
WRITEC*,*) ' 7-RQOFING FELT
WRITEC*,*) ' 8-ACETYLENE CYLINDERS
WRITEC*,*) ' 9-FLOORING FELT
WRITEC*,*) '10- CORRUGATED PAPER
WRITEC*,*) '11-SPEC1ALTY PAPER
WRITEC*,*) '12-V/A FLOOR TILE
WRITEC*,*) '13-DIAPHRAGMS
WRITEC*,*) '14-A/C PIPE
WRITEC*,*) '15-A/C FLAT SHEET
yRITEC*,*) '16-A/C CORRU6ATED SHEET
WRITEC*,*) '17-A/C SHINGLES
WRITEC*,*) MS-DRUM BRAKE LININGS, NEW
WRITEC*,*) '
WRITEC*,*) '







PRODUCT NUMBERS AMD TKEIR



Reference Numbers: '

19-D1SC BRK PADS.LV.KEW'
20-DISC BRK PADS,HV
21 -BRAKE BLOCKS'
22-CiUTCH FACINGS'
23-AUTO. TRANS. COUP '
24-FRICTION MATERIALS'
2S-ASB PROTECT. CLOTH'
26-ASB TMRD, YARN, ETC'
27-SHEET 6ASKETS '
28-AS8ESTOS PACKINGS '
29-ROOf COATINGS ETC'
30-OTHER COAT. S SEAL.'
31-ASB.-RIINF. PLAS'
32-MISSILE LINERS'
33-SEAIANT TAPE'
34-BATTERY SEPARATORS'
35-ARC CHUTES'
36-DRM BRK LIN, OLD'
37- DISC BRK PADS, LV, OLD'
38-M1NING/HILL1NG'
PAUSE 'Press the  or the  key to continue'
RETURN
END



-------
A.6  ADDITIONAL OCCUPATIONAL AND NONOCCUPATIONAL EXPOSURE ASSUMPTIONS
      FOR SENSITIVITY ANALYSIS

     In Volumes I and IV of this Regulatory Impact Analysis, costs and benefits
of Regulatory Alternative J are examined using additional exposure assumptions
for exposure settings for which exposures to asbestos are believed to occur but
for which no quantitative information exists.  This appendix reviews the
sources for these additional exposure assumptions for both occupational and
nonoecupational exposure settings.

     A.  Additional OccupationalExposure Assumptions

     For a number of asbestos products, quantitative exposure information was
not available for primary manufacturing, installation, and repair and dispose
concerning occupational exposures to asbestos.  Yet, exposures in these
settings are believed to occur despite the lack of quantitative information.
This omission of exposures that occur from the cost/benefit results presented
in this RIA could cause a substantial underestimate of the actual benefits
likely to be gained by the various regulatory alternatives examined.

     To address this lack of data and potential underestimate of benefits,
where possible, occupational exposures in a number of settings were estimated
based on old studies, secondary sources, and' occupational exposures associated
with analogous products and exposure settings.  In particular, quantitative
exposure information was estimated for the following occupational exposure
settings based on these "analogous products" and related imputation methods:

     •    Acetylene Cylinders: primary manufacturing
     •    Millboard: installation, repair/disposal
     •    Pipeline Wrap: installation, repair/disposal
     •    Beater-add Gaskets: installation, repair/disposal
     ••    High-grade Electrical Paper: installation, repair/disposal
     •    Specialty Paper: installation, repair/disposal
     •    A/C Pipe: repair/disposal
     •    Sheet Gaskets: installation, repair/disposal
     •    Packings; installation, repair/disposal
     •    Non-Roof Coatings: installation
     •    Missile Liner: installation

     Table A.6-1 presents a complete set of occupational exposure information
including the imputed information for these exposure settings.  In the right-
most column of the exhibit and in the footnotes to the exhibit, explanatory
notes describe the rationale for, and the sources of, the additional exposure
information for these exposure settings for these products.  In most cases, the
additional exposure information was based on the set of activities (such as
cuttings and sanding) likely to be performed with the asbestos product in the
particular exposure setting for which data on exposures did not exist.  The•
associated levels of exposure for these settings were then based on products
and exposure-settings which involve similar activities.  Thus, the additional
occupational exposures are, in some sense, "analogous" exposures based on
products and exposure settings for which information concerning occupational
exposures does exist.
                                     A.6-1

-------
     B.  4dditi_gnal Nonoccupational^Exposure Assumptions

     In a  large number of cases, quantitative  information concerning
nonoccupational exposures to asbestos in product use was not available, but
exposures  in  these settings are nevertheless suspected.  If these exposures do
occur, then the benefits of the various regulatory alternatives examined in
this RIA will underestimate the actual benefits likely to be obtained through
the asbestos product controls.  Hence, to examine the impact of these omitted
nonoccupational exposures in 17 of the product categories, assumptions
concerning the rate of release of the asbestos over, time were made.  The 17
products for which such assumptions were made are;

           Millboard
           Pipeline Wrap
           Beater-add Gaskets
           High-grade Electrical Paper
           Asbestos-Cement Pipe
           Flat A-C Sheets
           Corrugated A-C Sheets
           A-C Shingles
           Disc Brake Pads (HV)
           Clutch Facings
           Friction Materials   •                 -      •
           Asbestos Sheet Gasketing
           Asbestos Packing
           Roof Coatings and Cements
           Non-Roofing Coatings, Compounds, and Sealants
           Asbestos-Reinforced Plastics
           Sealant Tape

     In all cases, the assumption made regarding releases of asbestos from
these products during use was that  one percent of the asbestos contained in
the product would be released during each year of the useful life of the
product.    The rationale for these releases is that various activities, such as
cutting,  sanding,  friction-related abrasion, and similar actions that may
release asbestos from the products occur throughout the life of the product.
For population exposed, the assumption made was that the exposed population
equals the urban population of the U.S.

     Table A,6-2 presents these assumed nonoccupational exposure data for the
17 product -categories affected, listing both the assumed population exposed and
the exposure concentration in millions of fibers per year.
                                     A.6-2

-------
                                                                    Tabi* 4.6-1.


                                                     Exposure Levels {in million fibers inhaled par year) and
                                       Hoabar of Parsons Exposed  for Occupational  Settings (Use  of Products Hot Included)*
         Product
primary Manufacturing   Secondary Manufacturing
Suraber                   {lumber
  of    Millipn Fibers/    of
People       Year
                                                                                    Installation
                                                                                                            Repair/D isposal
                                                  Hunker
        Million Fibers/    of    Million Fibers/    of    Million Fiber*/
             Year        People       Yea*        People       Year
                                                                                                                                              Kotos
1.
2.
3.

Comserciai Paper
lollboard
Millboard

H/A" H/A* H/Ab S/Ab
»/A» H/Aa H/Ab N/Ab
12 145 448 57

H/Ab
M/Ab
U.K.

H/Ab B/Ab K/Ah
H/Ab H/Ab H/Ab
Similar to U.K. S»» Notes
secondary 5jm
misnufac. taring
57"


Installation may include cutting
to size and sanding, as does
secondary Manufacturing. If
retMsi r invnlvn* I'uf.Hriw
4,   Pipeline Wrap
H/AG
                                      H/AC
                                                                               N.K,    See Votes
                                                                                           52"
                                                  U.K.   See Notes
                                                              <23n
 exposures for repair/disposal may
 b* similar to installation and
 secondary manufacturing.   If the
 material is simply removed and
 disposed, exposures would be
 lower,  as asbestos is
 encapsolated,  unless the  material
 baa begun to disintegrate from
 wear.

 Reported installation eicposurea
 for pra-cut pipeline wrap
 saturated with tar ranga  from
 non-detectable to  0,02 £/cc  at
 three sites (uncertain if these
 are short-term or  long-tern
 exposures),*  Mean exposure  level
 calculated from reported  data  is
 approximately  0.02 f/cc (assuming
 levela reported as non-detectable
 to  be 0,003  f/cc;  the  actual
 detection limit was not
 reported).   Exposure from
 repair/disposal:   reported
 exposures  from pipe stripping teaA
 refurbishing at one site were all
 non-detectable  <<0.003 f/ee~«5.02
 f/cc) for  14 personal samples
 (sampling  time  171-420 minutes).g
Mean exposure level calculated to
be <0.009.

-------
                                                                       Table A.6-1.


                                                     Exposure Levels (In million fibers Inhaled par year) and
                                       Number of Persons Exposed  for Occupational Settings  (Use of  Products  Not  Included)*
                                                                            (Continued)
Primary Manufacturing Secondary Manufacturing Installation
Number Number Huraber
of Million Fibers/ of Million Fibers/ of Million Fibers/
Product People Year People Yaar People Year
5. Beater-Add Gaskets 227 110 1,244 57 H K Similar to
secondary
manufacturing
57m
-6. High-Grade Electrical 27 113 20 57 »,K. Stellar to
P°Per secondary
manufacturing
57m
Repair/Disposal
Number
of Million Fibers/
People Year Notes
H.K, See Notes Paper product installation may
57 include cutting, as does
secondary manufacturing; exposure
unlikely during installation 1£
there is no cutting, a* asbestos
is encapsulated, I£ repair
involves cutting, exposures for
repair/disposal may be similar to
installation and secondary
manufacturing. If the material
is singly removed and disposed,
exposures would be lower, as
asbestos is encapsulated, unless
the mnt.arial has begun to
disintegrate from wear.
U.K. See Notes Paper product. Installation may
U include cutting, as does
secondary ajanufacturing;
exposures unlikely during
7.   Roofing Felt
H/A°
B/A°
                                                                               396
                                                                                            439
                                                                                                        263
                                                                                                                     296
 installation if there is no
 cutting, as asbestos is
 encapsulated  If repair involves
. cutting, exposures for
 repair/disposal may be similar to
 installation and secondary
 manufacturing.   If the material
 ia simply removed and disposed,
 exposures would be lower, as
 asbestos is encapsulated, unless
 th» matorial has begun to
 disintegrate from wear,

 Installation includes application
 of roof coating by mopping.

-------
                                                                           te A.6-1.
                                                      Exposure Levels (in million fibers inhaled per year) and
                                        Number of Persons Exposed for Occupational Settlnga (Use of Products Not Included)*
                                                                            (Continued)
Primary Manufacturing Secondary Manufacturi
Number Number
ng Installation Repair/Disposal
Hiz&bor HuKiber
of Billion Fibers/ of Million Fibers/ of Million Fibers/ of Million Fibers/
Product People vattr People Year
8. Acetylene Cylinders 162-1 Similar to H/AC »/A°
primary manu-
facturing of
coatings
inn01

-------
                                                                        T&sle A.6-1.


                                                      Exposure Levels (in raillion fibers inhaled per ysar) and
                                        Hunber of Persona Exposed for Occupational  Settings (Use  of Products Hot Included)*
                                                                             (Continued)

15.
16.
17.
18.
19,
20.



21.
22.
23.


Pciinary
Number
of «
Product People
A/C Flat Sheet 12
A/C Corrugated Sheet H/Aa
A/C Shingles 11
Drum Brake Linings 1,115
Disc Brake Pads, JJW 815
Disc Brake Pads, HV 14



Brake Blocks 232
Clutch Facings 239
Automatic Transmission 1
Couiponettts


Manufacturing 	 Secondary MamifacturinR ^ 	 Installation Renair/BisDoaal
Hui*»r Jhinber Soaker 	 "
iilliw Fibers/ of Million Fibers/ of Million Fibers/ of Million Fibers/
Year People vsar People ¥„„ People Year Notes
478 S/AC H/AC 16 723 20 2,080
8/A« M/AC B/AC 7 723 9 2,080
473 8/Ac 8/Ac 236 130 164 Z44
3«5 1,937 125 B/Ah H/Ah 75,404 376
390 267 146 H/Ah H/Ah 39,441 386
385 <1 Sinilar to H/Ah H/Ah 117 390 Disc Brake Pads, HV, are very
secondary mmu- similar to Disc Brake Pads, UW,
facturtog of Disc «eept for s|zt s.eondary
Brake Pads, IMV manufacturing processes would be
«s stoilar.
3" 16 J27 »/Ah H/Ah 3,865 388
«« *B 166 »/Ah »/Ah 100 125
113 <1 Similar to H/Af H/A£ Exposure Unlikely Secondary manufacturing similar
secondary tnanu- to Specialty Paper, as both are
factaring of paper products (transmission
Specialty Paper components are 15 percent
                                                                                                                                 asbestos,  specialty paper  is  5-50
                                                                                                                                 percent asbestos);  processes
                                                                                                                                 would  involve  cutting  and
                                                                                                                                 shaping.   Exposure  unlikely in
                                                                                                                                 repair/disposal,  as entire
                                                                                                                                 transmission would be  removed,
                                                                                                                                 and  automotive transmission
                                                                                                                                 components are enclosed and Met.
24..  Friction Materials       187          398          27

25.  Protective Clothing     »/Aa        H/A*         H/Ab
  195
H/AD
H/An
H/A"
H/An
                                                    120
             H/A"
H/AD

-------
                                                                        table ft.6-1.
                                                      Exposure Lsvals (in million fibers Inhaled par year)  and
                                        Dumber of Persons Exposed  for Occupational  Settings (Use  of Products Hot Included)*
                                                                             (Continued)
Jrimary Hanuf actur inn
Number
of Million Fibers/
Product People Year
Secondary Manufacturing
Nuntoer
of Million Fibers/
People Year
Installation
Number
of Million Fibers/
People Year
Repair /Disposal
Number
o£ Million Fibers/
People Year
Notes
26,  Thread,  Yam,  etc.
                                ?8
                                            457
                                                        208
                                                                     408
                                                                              See Notes
                                                                               H/A
See Kotes
 N/A
27.  Sheet Gaskets
                               163
                                            208
                                                        878
                                                                     276
                                                                                M.S.
                                                                                       Similar to
                                                                                       secondary
                                                                                       manufacturing
                                                                                         276™
S«« dotes   See Notes     The primary use of asbestos
 "/A          H/A         thread end yarn is for brake
                          blocks, and clutch facings;
                          installation and repair/disposal
                          of these products would be
                          included under brake blocks and
                          clutch facings.  This product is
                          used to a lesser extent for
                          packings and gaskets; installa-
                          tion and repair/disposal would be
                          included under packings and
                          gaskets,   A small amuont is used
                          for specialty products, for which
                          little information is available.

  B.K,       See Notes     Installation may include cutting
              276         and shaping,  as does secondary
                          manufacturing;  exposure is
                          unlikely  during installation if
                          there  Is  no cutting,  as asbestos
                          is encapsulated.   One data point
                          for installation of gaskets
                          (assumed  to be  sheet gaskets,
                          based  on  processes listed) is
                          available;  the  number given is
                          
-------
                                                                          Table A.6-1.


                                                      Exposure Levels  (in million fibers  inhaled per  year)  and
                                         Hunter  of Persons Exposed for Occupational Settings (Use of Products Mot Inducted)*
                                                                             (Continued)
          Product
 Primary HanufacturInfi
Huo&er
  of    Million Fibers/
People       Tear
                                                      ggcondary Manufacturing
                                                              Million Fibers/
  of
People
Humber
  of
People
                              Installation
Million Fibers/
     Year
    Repair/Disposal
Number
  of
People
Million Fibers/
     Year
 27.   Sheet Gaskets
        (Continued)
28.  Asbestos  Packings
                                            198
                                                         25
                                                                     276
                                                                                H.K.
                                                                                       Similar to
                                                                                       secondary
                                                                                       manufacturing
                                                                                            276"
                                                                            U.K.
29.  Roof Coatings
                              *38
                                           273
                                                                               H-K-
                                                            S»» Hotes
                                                              130n
                                                                                                      See Hotes
                                                                                                        H/A
                                                                                                                                                Hot e a
                                                                           for repair/disposal are 0,09 f/cc
                                                                           for removal and concurrent
                                                                           installation; 0.13 f/cc for
                                                                           removal and hand scraping; and
                                                                           0.11 £/cc for r«noval and wire
                                                                           brushing.   fn«e level* are very
                                                                           similar to that for secondary
                                                                           manufacturing.  Ho details are
                                                                           reported on the operation
                                                                           monitored, the use of the
                                                                           gaskets, and whether th* gaskets
                                                                           were wet or dry.

                                                             See Notes     Installation may include cutting
                                                                 276       and shaping, as do«s secondary
                                                                           manufacturing; exposure during
                                                                           installation is likely to be
                                                                           lower if there is no cutting,
                                                                           although it night be higher than
                                                                           for gaskets because installation
                                                                           of packing night  involva more
                                                                           manipulation of the naterial.   If
                                                                           repair  involves cutting,
                                                                           exposures  for repair/disposal may-
                                                                           be similar to installation and
                                                                           secondary  manufacturing.   If the
                                                                           material is  simply  removed and
                                                                           disposed,  exposures would  be
                                                                           lower,  as  asbestos  is
                                                                           encapsulated,  unless  the material
                                                                           has begun  to  disintegrate  from
                                                                          wear.

                                                            Sae Rotes      Installation of roofing felt
                                                              K/A          includes application of coating
                                                                          by mopping.  Up to 90 percent of
                                                                          roof coatings are applied by
                                                                          trowel or brush.   Application of
                                                                          coating by spray would probably
                                                                          produce higher aaqsostiires, but not
                                                                          very high, because roof coatings

-------
                                                                        TOle A.6-1.
                                                     Exposure Levels  (in  Billion fibers Inhaled per year)  and
                                        Hunfcer of Parsons Exposed for Occupational Settings (lisa of products Hot Included)*
                                                                            (Continued)
         Product
 Primary Manufacturing
Humber
  of    Million Fibers/
People       Year
Secondary Manufacturing
Suabar
  of    Million Fibers/
People       Year
Dumber
  of
People
                                                                                    InatiillaUon
Million Fibers/
     Year
    Repair/Disposal	
Number
  of    Million Fibers/
People       Xear
                                                                                                                                               Notes
29.  Roof Coatings
       (Continued)
                                                                                                    contain only 5-10 percent
                                                                                                    asbestos, and the fibers would be
                                                                                                    wet.  Reported exposures for
                                                                                                    spray-applied aspbaltic roof
                                                                                                    coating range from 0.003 to 0.15
                                                                                                    f/cc (sampling time 342 to 432
                                                                                                    nsinutesj and 0.01 to 0.3 f/cc
                                                                                                    {sampling time not given).   Moan
                                                                                                    exposure level calculated from
                                                                                                    reported data for spray
                                                                                                    application is approximately 0.17
                                                                                                    f/cc.  Ho data are available for
                                                                                                    non-spray application of roof
                                                                                                    coatings;  for painting with rasin
                                                                                                    coating*,  reported exposures are
                                                                                                    0.0-0.06 f/ec (sagpling tin* S-Z3
                                                                                                    Bimitas.)    Mean exposure level
                                                                                                    calculated from reported data for
                                                                                                    painting la approximately 0.04
                                                                                                    f/ee.  Assuming that non-»pray
                                                                                                    application of roof coating would
                                                                                                    produce approximately the sama
                                                                                                    exposure level as painting with
                                                                                                    resin coatings,  and assuming that
                                                                                                    application of roof coatings is
                                                                                                    90 percent  non-spray,  the overall
                                                                                                    mean exposure  level is  calculated
                                                                                                    to be 0.05  f/cc.   Repair/disposal
                                                                                                    of roof coatings  is  included
                                                                                                    under repair/disposal of roofing
                                                                                                    felt.

-------
                                                                         Tsble A.6-1,

                                                      Ejqxssure Levels (in million fibers inhaled per year) and
                                        Runtoer of Persons Exposed for Occupational Settings  (Use at  Products Hot  Included}*
                                                                             {Continued}
         I'roduct
 Primary Manufacturing
Numbsr        ;
  of    Million Fibers/
People       Xear
Secondary Hanufacturinft
Number
  of    Million Fibers/
People       Year
            Number
              of
            People
                                                                                    Installation
Million Fibers/
     Year
                                                                    Number
                                                                      of
                                                                    People
                                                                                                            SeBair/Disposal.
Million Fibers/
     Year
                                                                                                                                               Hotes
32.  Missile Liners
  380J
                                            220
                                      H/AC
                                                                                U.K.
                                                                                          See Notes
                                                                                             57"
                                                                             Exposure  Unlikely
33,  Sealant Tape
  134 J
                                            220
 H/AC
S/AC
                                                                                  Exposure Unlikely
                                                                           Sea Rotes
                                                                           H/A
                                                                                                                     Sea Notes
                                                                                                                     H/A
34,   Battery Separators
Similar to pri-   H/AC
mary manufac-
turing of pipe-
line wrap
                                      8/A°
                          H/A*
                         8/A*
                                                                                                           Exposure Unlikely
                                          Exposures during installation
                                          possible if material i» cut to
                                          size; level likely to b« low as
                                          liner is a rubbery material and
                                          asbestos is encapsulated.  Might
                                          be comparable to secondary
                                          manufacture of paper products, as
                                          the process Involves cutting end
                                          asbestos is encapsulated.
                                          Escposure unlikely from
                                          repair/disposal as missile is
                                          destroyed during use.

                                          Exposures during installation
                                          unlikely because material is a
                                          rubber tape,  with asbestos
                                          encapsulated.   Exposures during
                                          repair/disposal unlikely, as
                                          asbestos is encapsulated, unlosu
                                          material has  begun to
                                          disintegrate from wear.

                                          Product is a  mat-type material
                                          which may be  made by a  process
                                          similar to felts (e.g.,  pipeline
                                          wrap),  with similar exposures,
                                          Exposures unliktly from repair/
                                          disposal as entire product would
                                          be  disposed wit.h asbestos
                                          enclosed and  the separator would
                                          probably be wet.

-------
                                                                         Table A.6-1.

                                                      Exposure Levels 
-------
                                                                        Table A.6-1,


                                                     Exposure Levels  (in Billion fibers inhaled par y«ar) and
                                        Bomber of Parsons Exposed for Occupational  Settings (Uso of Products  Hot Included)*
                                                                            (Continu«d)
 BnployeeB probably not expense!  to  asbestos  full-tima,  based  on nsbsstos  consumption.

 Anderson PH  Grant MA, mime*  HO, Farina HI.   1982.   GCA Corporation.   Analysis of  fiber  release  boo  certain asbestos products.  Draft final report
Washington, 0.C.:  Office of Pesticides  and  Toxic Substances, U.S.  Environmental Protection Ag«ney.  Contract No. 68-01-5960.                         "

 Rose T.  1987,  Telephone conversation  batwesn  Tom Rose,  Rosa  Roofing, Arlington, VA,  and  ICP  Inc., April  1, 1987.  fa cited in Asbestos Exposure ABsMstwnt.

                   estimated baaed on comparison to other  products  or proc«»s»s, not on actual  data, and should be used with caution.  See notes for individual
"Exposure Iwel is estiraated ba.ed on limited data from studies th«t may be old and/or not dascribed in detail.  Various .sstaptions are included in the
                     inf°mati0n that mey "Ot b* "P01*^- Boch •• ablins tim9 and limits of detection.  Estimate should be used with caution.  S«. notas for

-------
TABLE A.6-2. ADDITIONAL HQHOCCUPATIQHAL EXPOSURE ASSUMPTIONS FOR USE OF PRODUCTS
                      Occupational




             Ho, of People     Mil. Fib./tr
             Honocctjpational




Ho. of People         Mil. Fib./Yr
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14,
15.
16.
17.
18.
19,
20.
21.
22.
23.
24.
25,
26.
27.
28.
29.
30.
31.
32.
33.
34.
35,
36.
37.
38.
Comnercial Paper
Rollboard
Millboard
Pipeline Wrap
Beater-add Gaskets
High-grade Elect. Paper
Roofing Felt
Acetylene Cylinders
Flooring Felt
Corrugated Paper
Specialty Paper
V/A Floor file
Diaphragms
A/C Fipa
A/C Flat Sheet
A/C Corrugated Sheet
A/C Shingles
Drum Brake Linings (OEM)
Disc Brake Pads, LM? (OEM)
Disc Brake Pads, HV
Brake Blocks
Clutch Facings
Auto. Transmits. Corop,
Friction Materials
Protective Clothing
fhread, yam etc.
Sheet Gaskets
Asbestos Packings
Roof Coatings
Hon-Hoof ing Coatings
Asb. Reinforced Plastics
Missile Liners
Sealant, Tape
Battery Separators
Arc Chutes
Drum Brake Linings (A/M)
Bisc Brake Pads, LM? (A/M>
Mining and Milling


171,136,373
171,136,373
171,136,373
171,136,373







171,136,373
171,136,373
171,135,373
171,136,373


171,136,373

171,136,373

171,136,373


171,136,373
171,136,373
171,136,373
171,136,373
171,136,373

171,136,373







0.0000261*8
0.0000602*7
0.003730921
0.000372







0,000980582
0,000154728
0.000016497
0.000145989


0.000352845

0.000297445

0.004813187


0,001631991
0.0001872
0.004433279
0.000442663
0.001218152

0.000126915






-------
 APPENDIX B;    CAPITAL CONVERTIBILITY AND QUASI-RENTS DETERMINATION

    This appendix presents a detailed analysis of the derivation of quasi-
 rents used in estimating the costs and effects of the various regulatory
 alternatives examined in this study.   The appendix is organized into two major
 sections.   Section 1 (1) presents the theoretical approach for calculating
 quasi-rents, (2) indicates exactly how these estimates of quasi-rents enter
 the regulatory alternative simulation model,  and (3) calculates quasi-rents
 for the various product markets.   The second section of the appendix contains
 a report from PEI Associates on capital convertibility and the costs of exit
 from these various asbestos product markets.   The data contained in the
 memoranda contained in this section are the  input information for the
 calculations performed in first section.

    1.   Calculation of Quasi-Rents for Asbestos Product; Markets

         1.1   Introduction

         The  proposed regulation of asbestos  products calls for bans of certain
 asbestos products,  a phase-down of asbestos  fiber use,  or a combination of the
 two.   In the case of a ban,  this  means that  the affected products can no
 longer be  manufactured,  and in the case of the phase-down,  manufacture of  the
 asbestos-product may be limited and at the end of the phase-down period the
 product will no longer be manufactured.   In  either case,  some of the affected
 industries may  have  to find an alternative use for their existing equipment
 (given that  it  has useful life remaining)  by adapting or converting the
 equipment  to manufacture substitute products.

    If  this conversion is feasible,  there  maybe costs associated with doing
 so.  On the  other hand,  in the event  that such conversion is not feasible, the
 existing equipment may have to be sold to industries using similar equipment,
 sold as scrap,  or disposed as  waste in a  landfill.   In any case (unless
 conversion to the substitute manufacture  is  costless),  the returns to capital
 in  the  asbestos-product  manufacturing  industries  will not be the same under •
 the regulations  as in the baseline.   In more  formal  terms,  this  implies that
 producers of the  asbestos products  enjoy  "quasi-rents"  from the  use  of the
 existing capital  in  the  manufacture of these  products  in the baseline,  and may
 suffer  a loss of  quasi-rents depending on the  final  form of the  proposed
 regulation. ^

   This  memorandum presents the calculation of the quasi-rents per unit output
 per year for  each of  the industry segments potentially  affected  by the
 regulations  and  is organized into three sections:
       The concepts of "quasi-rent" and "rent" have a long history in
economics.  Traditionally, rent refers to the return to a factor of production
that is permanently in fixed supply, such as land.  Quasi-rent refers to the
return to a factor of production that is only temporarily in fixed supply,
such as the physical plant of a firm.  Although this is not the only possible
definition of quasi-rent, it is widely used and is the one employed here.
Thus, quasi-rents are returns to an asset in a particular use which exceed
those available in other uses.

                                   .  B-l

-------
         «     Section  1.2  presents  the  theoretical  approach  for  calculating the
              quasi-rents  per unit  output per  year.   This  approach considers
              transferal)ility of capital to  an- alternative use (where these
              alternative  uses consist  of existing  substitute products),
              conversion costs,  sale  of used equipment, disposal costs, losses
              in production efficiency, and  reformulation  costs.

         «     Section  1.3  presents  the  least cost options^ and the
              relevant data used in the calculation of the quasi-rent
              per unit.output per year  for each industry segment based
          . '   on engineering cost estimates.

         "     Section  1.4  presents  the  results  of applying the
              theoretical  approach  to the data  for  each industry
              segment.  Quasi-rents per unit output per year for each
              industry segment presented in  this section are used as
              inputs for the Asbestos Regulatory Cost Model  (ARCM).

         1-2   Theoretical  Approach	.for.Calculating  Quasi-Rents

         This  section  presents the  approach  used for calculating the streams of
quasi-rents enjoyed by producers of  asbestos-products in  the baseline, i.e,
the quasi-rents per unit  output per  year for the period of the  scenario.  Each
factor included in these  calculations  is discussed in detail below.
Throughout the analysis,  only existing substitute  products and  processes are
included in considering alternative  employment of  the capital equipment
possessed by  producers of asbestos-containing  products.   Thus,  the quasi-rents
calculated here would be  overestimates if new  processes or products were
developed in  which the asbestos-related equipment  could be used.

               1.2.1  Quasi-Rents  in a Dynamic, .Decision-Making  Framework

               The ARCM simulates  prices arid quantities for the various
asbestos product markets  and the asbestos fiber market over the period of the
regulatory scenario.  However,  the individual  firm's decision to convert from
producing the asbestos product  to  producing the substitute product is a
decision based on how it  projects  market conditions  over  tine.  Given rational
behavior, the firm will undertake  the  conversion of the existing equipment
only when the present value cost of  using asbestos  fiber  becomes prohibitive,
i.e., the present value cost of the  asbestos product becomes greater than the
present value of switching.3 The ARCH, on  the other hand, "walks" forward
through  time  and, as  such,  can  only model myopic producer behavior.  That is,
information for future periods  in  the model is not  available until the model
     n
       Engineering cost estimates of various options available to each
industry were prepared for EPA by PEI Associates.  This appendix presents the
least cost option for each industry segment.
     •3
       This is applicable for firms producing asbestos products- under a phase-
down.  In the case of a ban, the conversion will take place in the first year
of the particular product's ban.  Furthermore, in cases where an asbestos
product has more than one substitute, the capacity dedicated to satisfying the
particular substitute segment's demand will be converted as the relevant
"switching" conditions are met for that segment.

                                     B-2

-------
reaches  those periods.  Thus,  dynamic  rational  decision making  cannot be
explicitly modeled  in the ARCM.

   Despite this  limitation,  our approach  to  modelling producer  decisions
regarding capital conversion during  the regulation's  implementation  is
designed to mimic rational forward-looking decisions  as much  as possible.  In
the ARCM, firms  "bid" for fiber each year with  the  quasi-rents  that  accrue to
them in  the manufacture of the asbestos product (quasi-rents  are annualized
over the useful  life of the  existing equipment).  This approach, however,
yields correct conclusions regarding switching  if the useful  life of the
equipment is less than or equal to the time  spanned by the  scenario.  In the
cases where the  existing equipment may last  beyond  the duration of the
scenario,  this  approach will not necessarily generate correct  producer
decision making  on  the timing of switching their  capital to alternative uses.

   To model rational producer behavior in cases where the life  of the
equipment exceeds the length of the  scenario, we  first define the present
value of quasi-rents as the  costs associated with exit (conversion costs,
cleanup  costs, lost capital  value, etc.).  This makes sense because  it is the
costs of transferring the equipment  to alternate  uses (including possible loss
of the entire value of the equipment)  that form the surpluses,  or quasi-rents,
enjoyed  by producers of asbestos products.   Next, the present value  of the
quasi-rents are  treated as perpetuities.5 that is, the costs of transferring
the equipment to alternative uses (or  scrap  as  the  case may be) are  converted
to an infinite stream of yearly quasi-rents.  These are then  used in the ARGK
for simulating firms' bidding .strategies  for fiber.

   Analytically, expressing  quasi-rents as a perpetuity avoids  under- or over-
estimating quasi-rents in the 'ARCM and, at the  same time, mimics rational
forward-looking producer behavior.   Firms will  bid  away the quasi-rent flow
(expressed as a perpetuity)  up to the  p.plnt.,at.j!Jj.i_cb-i-t__ls._iu>....r.lqnger
worthwhile not to convert the equipment.   If the  fiber cost to  producers
exceeds  the perpetuity this  means that, in a present  value  sense, it is
cheaper  to convert  than not  to. ' Put differently, if  the potential loss in a
given year by not converting and continuing  to  purchase fiber exceeds the
potential benefit of delaying conversion  (hence,  the  perpetuity construction),
then it  is better to convert.  Furthermore,  as  long as the  full price of fiber
(i.e., the valuable rights to purchase or use asbestos fiber  under a fiber
phase-down plus the fiber cost) continues to rise over time,  the timing of the
decision to convert as predicted by  the ARCM using  the perpetuity construction
is precisely the same as that which  would result  from a forward-looking
rational expectations model.  This method also  ensures that the present value
of the quasi-rent loss is correctly  measured and  cannot exceed  the original
present value of the quasi-rents for the  relevant equipment.

   To summarize, a  firm will continue  producing the asbestos  product until the
full price of fiber is greater than  the sum  of  the  price of the cheapest
substitute and the  relevant  quasi-rent perpetuity.  At such a point  in the
     ^ PEI reports that this may be true for all industry segments.

     5 The idea behind treating quasi-rents as perpetuities is that the quasi-
rent per unit of output per year will reflect the value of avoiding the
conversion costs per unit of output per year.

                                     B-3

-------
scenario,  the capacity devoted to satisfying the demand for this particular
substitute segment will be converted. *>  At this time, conversion costs will be
incurred and quasi-rent perpetuity losses will cease to accrue in the
following  years.  This process continues until all the capacity has been
converted  and the industry no longer manufactures the asbestos product.

               1.2,2  Selectionof^Conversion Option for Industry Segments

               The memoranda from PEI Associates present various options and
their associated costs for the conversion/disposal of existing equipment
available  to each industry segment.  The least cost option for each industry
segment is selected for use in the calculation of the quasi-rent per unit
output per year.  The logic behind this is that when faced with an asbestos
product ban or phase-down, producers will elect the course of action that
preserves  the greatest portion of their asset values or costs the least to
implement.  Hence, these are referred to as "least cost options."  For
example, in the memorandum on asbestos-cement pipes, four options for
conversion/disposal of existing capital are identified,'  In the case of A-C
pipes, all options are plant closure options since existing equipment cannot
be converted for use in the manufacture of the substitute product currently
being produced.  These options and their costs for an A-C pipe plant with a
capacity of 200 tons per day are.

        •    Disposal of equipment in a hazardous waste landfill
             $600,000

        •    Cleanup of equipment and resale of equipment $670,000

        •    Cleanup of equipment and disposal in a sanitary landfill
             $1,144,000

        •    Cleanup of equipment and sale as scrap $992,000

Therefore, the cost of the least cost option used in the calculation of quasi-
rents in the A-C pipe industry is the sum of the value of the existing capital
and the one-time cost of disposal of all equipment in a hazardous waste
landfill.9
       The assumptions underlying this approach are: (1) capacity is
convertible in amounts equal to segment demands, and (2) the full price of the
fiber remains the same or increases over the period of the scenario.

     ' Section 2 of this appendix.

     ° All costs include cleanup and repair of building where equipment has
been removed.

     * .The inclusion of one-time costs in the calculation of quasi-rents is
discussed below.
                                     B-4

-------
                1.2.3   TransferaMlity_.L_of Capital

                Industries  in which capital  cannot be transferred into  an
 alternative use,  i'.e.'the  manufacture of the substitute product,  the quasi -
 rents perpetuity  per  unit  output is calculated from the cost of the capital
 per unit  output minus any  value recouped through resale of used machinery or
 sale of the machinery as scrap . *-®  For industries in which capital can
 feasibly  be transferred to the manufacture  of the substitute product,  the
 perpetuity of  the quasi -rents per unit output is calculated based on the
 conversion costs  incurred  (per unit output)  to adapt/convert the existing
 machinery for  use in  the manufacture of the  substitute  product.

                1.2.4   Disposal of Capital

                If the capital is not transferable (or wholly transferable) in
 some cases it  may be  sold  as used equipment  or scrap.   In any case, equipment
 in direct contact with asbestos  will need to be cleaned prior to sale  since
 asbestos  is a  hazardous substance.   Furthermore,  in the event that no  resale
 or scrap  markets  exist, the equipment will have to be disposed of in a
 landfill.  This can be achieved in two ways;  1)  disposal of all equipment in a
 sanitary  landfill after all equipment in contact with asbestos has-been
 cleaned,  or 2)  disposal of all equipment in  contact with asbestos in a
 hazardous waste landfill and the remaining equipment in a sanitary landfill.
 The actual choice will depend on the relative costs of  the two options.
 Finally,  the areas where the asbestos product is  manufactured must be  cleaned
 before any alternative production can commence . *••*•

   The costs of cleaning and disposal can be substantial in some cases and are
 included  in the calculation of quasi-rents.   Strictly speaking,  these  are one-
 time costs and do not quite qualify as quasi-rents for  the machinery Eer s.e.
 however,  they  will definitely be part of the producer surplus losses suffered
 by the manufacturers  of asbestos products once the regulation comes into
 effect.   These costs  have  therefore been included in the calculation of quasi-
 rents, since our  goal is to define  producer  surplus losses.

               1.2.5
               In addition to the costs of cleaning and disposing of certain
equipment not transferable to the manufacture of the substitute product,
conversion of capital may entail another economic cost -- the equipment used
in the manufacture of the asbestos product may not perform as efficiently in
the manufacture of the substitute product.  However, this loss in production
efficiency is not a contributing factor in the calculation of quasi-rents
unless the loss is caused by the express use of the equipment designed for use
        The PEI report indicates that in most cases the existing capital can'
last for a long tiae with minimal maintenance.  Therefore, the cost of
equipment used in the calculation of quasi-rents is the cost of a new
installation (non-greenfield) for a relevant industry segment.  This may
overstate the quasi-rents because the machinery is not new, making the results
upper bounds for such losses.

        This is also true for the cases where capital is transferable into an
alternative use.

                                     B-5

-------
with  asbestos  in  the  manufacture  of  the  substitute product.   This means  that
if  alternative equipment  available for the  manufacture  of the substitute
product performs  better than  the  converted  equipment, then this  loss  in
production efficiency is  definitely  a contributing factor.  However,  if  the
same  equipment used in the manufacture of asbestos products is used in the
manufacture of substitute products and the  loss  in production efficiency is
caused by the use of  substitute materials (i.e.,  if a new plant  set up for the
manufacture of the substitute product would face the same production
efficiency loss) , then the loss in production  efficiency  is an outcome of the
current state of  technology and cannot be considered a  contributing factor in
the calculation of the quasi- rents. ^

    If the production  efficiency losses qualify for inclusion  in  the
calculation of the quasi -rents, then the percentage of  capital value  equal to
the percentage drop in production efficiency is  included  in the  stream of
quasi -rents enjoyed by producers  of  the asbestos  products in  the baseline.

               1.2.6   Reformulation.  Costs

               Industries in  which the existing  equipment is  converted for use
in  the manufacture of the substitute product aay incur  some "reformulation"
costs, i.e., costs incurred for research and development  of a suitable
substitute or substitute  mixture  to  replace  asbestos in the formulation  of the
affected product.   Reformulation  costs may be  incurred  for each  product  line
manufactured.  For example, in the coatings  and  sealants  industry, various
types of coatings using asbestos  are produced  and each  of these  coatings will
have  to be reformulated with  an appropriate  substitute  or substitute  mixture.

    Reformulation  costs may be incurred by each individual firm if the
information is proprietary.  Alternatively,  reformulation costs  may be
incurred by the industry  as a whole  if the new formulations are  shared.  The
PEI memos indicate that in all cases where reformulation  costs are incurred,
the information is proprietary and the burden  is  on each  individual
   Since reformulation costs are not a function of existing capacity or
current production, they cannot be included directly  in the calculation, of the
quasi-rent per unit output.  Nevertheless, the prospect of these reformulation
costs certainly affect producer decisions regarding capital conversion.  To
introduce these costs into the M.GM, all costs other  than reformulation costs
are used in the calculation of quasi -rents as reported in this memorandum and
the reformulation costs per year are reported separately as. a separate
     1 *\
        Given the current state of the technology, if the same machinery is
utilized for manufacture of both the asbestos product and the substitute
product, then the value added by the equipment to each product unit on the
margin is the same in both cases.  Given the fact .that different units of the
two products are manufactured (since there is an "efficiency loss™ in one
use), the value added to each unit must be different.  As result, despite the
inequality of technical efficiency, the values of the equipment in the two
uses must be the same.

     13 Multiple plant firms are assumed to share the results of R & D if more
than one plant manufactures the same formulation.
                                     B-6

-------
perpetuity.   ••'•^  Both the non- reformulation related conversion costs and the
reformulation costs are used  in the ARCM  to calculate the actual quasi-rent
per unit output using the baseline output quantity as follows:
                                             RCp
where ;

             — Actual Quasi-Rent per unit output per year  (perpetuity),
        NQR- - Non- reformulation costs Quasi-Rent per unit output per year
               (perpetuity) , ^

        Qk   ~ Baseline Quantity in the year under consideration, and

        RCp  - Reformulation Costs per year (perpetuity) ,

        1.3  Data Used in the^CalcuIat Ion of Quas i - Rents

        PEI Associates have developed equipment conversion costs for twelve
industry segments. ^  Exhibit B-l shows the mapping of various asbestos
products into these industry segments.  Product categories 34 (Battery
Separators) and 35 (Arc Chutes) are not listed in this exhibit because these
products are not included for the ARCM simulations, and therefore, no quasi-
rents are calculated for them.  This section identifies the least cost options
for each industry segment based on the PEI memoranda.

               1.3.1  Asbestos -Cement ...... Pipe

               Existing equipment in this industry segment is not transferable
into alternative use.^<*  The least cost option available to firms in this
industry is to dispose of their existing equipment in a hazardous waste
landfill.  The cost of disposing of all equipment in a hazardous waste
landfill and cleaning the building for reuse amounts to $600,000,  The .
     *•* The reasoning here is the same as for quasi-rents since a firm will be
willing to incur a higher cost of production (within the limits discussed
earlier) in order to avoid reformulation costs.

     " For industry segments where more than one product is manufactured by a
firm, the reformulation costs are assumed to be equally divided among the
various products manufactured by a firm.  In such cases, the quasi-rent per
unit of output per year and the reformulation costs per year are reported for
each product category.

         This is the non-reformulation cost quasi-rent perpetuity per unit of
output calculated in this section,

     ^ Section 2 of this appendix. •

     *-° Section 2 of this appendix.


                                    ' B-7

-------
       Exhibit B-l,   Mapping of Products into Asbestos Industry Segments
Asbestos Industry Segment
            Asbestos Products Included
Asbestos-Cement Pipe

Friction  Products
Papers  and "Felts
Asbestos Roofing Felt

Vinyl-Asbestos Floor Tile

Asbestos-Cement Sheet
  and Shingles


Textiles and Packing



Sheet Gasketing

Coatings and Sealants
Asb,-Reinforced Plastics

Chlor-Alkali Industry

Acetylene Cylinders
14.  Asbestos-Cement Pipe and Fittings

18.  Drum Brake Linings  (OEM)
19.  Disc Brake Pads, LM? (OEM)
20.  Disc Brake Pads (BV)
21.  Brake Blocks
22.  Clutch Facings
23.  Automatic Transmission Components
24.  Friction Materials
36.  Orum Brake Linings  (Aftermarket)
37.  Disc Brake Pads, LMV (Aftemarket)

 1.  Commercial Paper*
 2.  Rollboard*
 3.  Millboard
 4.  Pipeline Wrap
 5.  Beater-add Gaskets
 6.  High-grade Electrical Paper
 9.  Flooring Felt*
10.  Corrugated Paper*
11,  Specialty Papers

 7.  Roofing Felt*

12.  Vinyl-Asbestos Floor Tile*

15.  Flat A-C Sheets
16.  Corrugated A-C Sheets
17.  A-C Shingles

25.  Asbestos Protective Clothing
26,  Asbestos,  Thread,  Yarn, and Other Cloth
28.  Asbestos Packing

27.  Asbestos Sheet Gasketing

29.  Roof Coatings and Cements
30.  Non-Roofing Coatings, Compounds, and Sealants
32.  Missile Liner
33.  Sealant Tape

31.  Asbestos-Reinforced Plastics

13,  Diaphragms

 8.  Filler for Acetylene Cylinders
* Product is no longer made in the United States.

                                     B-8

-------
estimated cost of a non-greenfield A-C pipe installation is $9.9 million for a
capacity of 200 tons per day,

             1.3.2  Friction Products

             The existing machinery in the friction products industry can be
used to manufacture non-asbestos friction products. *  The cost of converting
a facility manufacturing 15 million pieces of asbestos friction products per
year is estimated to be $1,095,000.  A 20 percent decline in the production
rate is anticipated when substitute materials are used.  However, this decline
in the production rate is a function of the current technology and not a
function of converting the existing equipment.  Therefore, this decline in
production efficiency is not included in the calculation of the quasi-rents.

    Furthermore,  it is estimated that research and engineering costs will
amount to $600,000 per firm in order to reformulate the current asbestos
mixture(s).  ICF has identified 21 firms currently producing asbestos friction
products.^  Most of these firms manufacture more than one type of friction
product.  Twelve firms manufacture drum brake linings (18 & 36), thirteen
manufacture disc brake pads for light motor vehicles  (19 & 37), one
manufacture disc brake pads for heavy vehicles (20) ,  eight manufacture brake
blocks (21),  two manufacture clutch facings (22), one manufactures automatic
transmission components (23), and four manufacture friction materials (24).
Exhibit B-2 shows the various products made by each individual firnt,^

             1.3.3  .Papers	and .Felts

             The existing machinery in the papers and felts industry can
readily be converted to the manufacture of substitute products.**  However,
the equipment has to be slightly modified and cleaned before it can be adapted
for use in the manufacture of asbestos-substitute products,  fhe cost of the
minor modifications is estimated to be $7,000 and the equipment cleaning costs
for a plant with a capacity of 8,000 tons per year is estimated to be $10,000
to $15,000.

             1.3.4  Asbestos Roofing Felt

             The product in this industry segment is no longer manufactured in
the United States.23
     •*•" Section 2 of this appendix.

     9fl
     zu Appendix F of this report.

     91
     *•*• The firms are given numbers 1 through 21 in Exhibit 2 in order to
protect confidential business information.  Product categories with costs
associated-with them are manufactured by individual firms.  See Section 4 for
further 'details.

     9 o
     " Section 2 of this appendix.•
     e\ -3
     " Appendix F of this report.
                                     B-9

-------
                          EXHIBIT B-2,  PRODUCTS MANUFACTURED B5f EACH FIRM IB THE "FRICIIQH PRODUCTS" IHDUSmi SISMERI

Firm

1
2
3
4
5
6
7
a
9
10
11
12
13
14
15
16
1?
18
19
20
21
Total
f of Products
Manufactured

5
6
2
2
4
4
2
2
1
5
2
2
4
4
1
6
1
4
1
4
4

Reformulation Distribution of Ra formulation Costs tor Product Category
Cost p«r Product
(thousand dollars)
200
150
600
600
300
300
600
600
600
150
600
600
300
200
600
150
600
150
600
300
300

18

200
150'


300
300

600

150

600
300
200

150



300
300
3,550
19

200
150
600
600
300
300
600



600

300


150



300
300
4,400
20 21 22 23
(thousand dollars)
200
150 150







150 150



200 200

150 150
600
150 150 150
600


350 2,200 450 150
24 36

200
150


300
300

600
600
150 150

600
300
200
600
150

150

300
300
1,500 3,550
37

200
ISO
600
600
300
300
600



600

300


150



300
300
4,400
Sources:  See Tact.

-------
              1,3.5  Vinyl-AsbtstQS_j'lgor_Til.e

     The product in.this industry segment is no longer manufactured in the
 United States.24

              1.3.6  Asbestos,..Felt-backed Vinyl Sheet Flooring

              The product is no longer classified as a separate product since
 it is an application of asbestos felt."

              1.3.7  Asbestos,-Cement Sheet and Shingle

              Existing equipment in this industry segment is not transferable
 into alternative use.26  The least cost option available to firms in this
 industry is to dispose of their existing equipment.  The cost of disposing of
 all equipment and cleaning the building for reuse amounts to $400,000.   The
 estimated cost of a non-greenfield A-C sheet installation is $7,856,000 for a
 capacity of 3,000,000 square yards per year and for an A-C shingle facility is
 the same for an annual capacity of 21,500 tons per year.

              1.3.8  Textiles	and Packing

              The existing equipment can be readily converted to use asbestos-
 substitute materials with minimum cleaning and without significant
 modification.  '   Cleaning costs are expected.to be insignificant.

     One facility contacted by PEI indicated that carding equipment may need to
 be replaced.   However,  this facility is believed to be an exception and in
 general,  no equipment modifications or replacement are deemed to be necessary.

              1.3.9  Sheet Gasketlng

              Existing equipment in this industry segment can be converted  to
 alternative use  with considerable expense,  °  The cost of modifying the
•equipment is anticipated to be $7,2 million for a plant with a capacity of 28
 tons per day.   This  is considered to be the least cost option since the
 estimated cost of a  non-greenfield sheet gasketing installation with the same
 capacity is $59.1 million.  An additional $200,000 expenditure is estimated for
 tearing down and cleaning the equipment.

              1 • 3.10   Coatings- and Sealants

              The existing equipment in this industry segment will require  no
 major equipment  additions or modifications to convert the plant equipment  to
      ^* Appendix  F  of  this  report,
      A C
      *•  Appendix  F  of  this  report.

      9 ft
      *-° Section 2 of this appendix.
      n~t
      *•' Section 2 of this appendix.

      28 Section 2 of this appendix.
                                     B-ll

-------
 the manufacture  of  substitute products. ^  A  20 percent decline  in the
 production rate  is  anticipated when  substitute materials  are used.  However,
 this  decline  in  the production rate  is a function  of  the  current technology
 and not a function  of converting  the existing equipment.  Therefore, this
 decline in production efficiency  is not included in the calculation of the
 quasi -rents.

    Furthermore, it is estimated  that it may  cost  up  to $20,000  per
 formulation in order to replace asbestos by a substitute  or substitute
 mixture.  1CF identified 49 firms currently producing products in the coatings
 and sealants  category with most of these firms manufacturing more than one
 type  of product.-'0  Seventeen firms manufacture roof  coatings and cements
 (29); 30 manufacture non-roof coatings, compounds, and sealants  (30); six
 manufacture -missile liner (32); and four manufacture  sealant tape (33).
 Furthermore,  the industry average was identified as 1.8 formulations per firm,
 but is considered as two formulations per firm for the purpose of calculating
 quasi-rents.  Therefore, reformulation costs  are anticipated to  be $40,000 per
 firm.  However,  if  a particular firm manufactures  more than two  products the
 reformulation costs are calculated as $20,000 per  product.  Exhibit B-3 shows
 the various products made by each individual
             1.3.11  Asbestos-Eeinforced Plastics

             The existing equipment used in the manufacture of asbestos -
reinforced plastics will not require major equipment additions or
modifications to convert the plant to manufacture products containing asbestos
substitutes .

    A 10 percent decline in the production rate is anticipated when substitute
materials are used.  However, this decline in the production rate is a
function of the current technology and not a function of converting the
existing equipment.  Therefore, this decline in production efficiency is not
included in the calculation of the quasi-rents.

    Reformulation costs are anticipated to be $30,000 per firm and ICF has
identified eight manufacturers of asbestos reinforced plastics. ^3

             1-3.12  Chlor -Alkali Industry

             The least cost option for the chlor-alkali industry is to
"retrofit" the existing diaphragm cells to membrane cells at a cost of $50
     90
     *' Section 2 of this appendix.
     Q A
     a  Appendix F of this report.

     31 The firms are given numbers 1 through 49 in Exhibit 3 in order to
protect confidential business information.  Product categories with costs
associated with them are manufactured by individual firms.  See Section 4 for
further details,
     o o
     -^ Section 2 of this appendix.

     *3 Appendix F of this report.

                                    B-12

-------
 EXHIBIT B-3.   PRODUCTS MANUFACTURED BY EACH FIRM IS THE "COATIRGS & SEALANTS" INDUSTRY SEGMENT
Fins
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
3*
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
f of Products
Manufactured
1
2
1
1
1
1
1
2
1
1
1
1
1
2
. 1 •
1
1
1
1
1
1
1
1
1
1
1
1
1
i
2
1
1
1
' 1
1
1
2
1
1
1
2
1
1
1
1
1
3
1
1
Beformlation
Cost per Broduot
(thousand dollars)
40
20
40
40
40
40
40
20
40
40
40
40
40
20
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
20
40
40
40
40
40
40
20
40
40
40
20
40
40
40
40
40
20
40
40
Total
Distribution
29



40
40


20
40




20




40

40

40
40



40

20
40


40


20




40




20

40
580
of Reformulation Co*ts by Product
30 32
C thousand doilars)
40
20 20
40


*0
40
20

40
*0
40
40


40
40
40

*0

40


40
40
40

40
20

40
40

40
40
20
40
40
40
20

40
40
40
40
20
40

1, 120 180
Category
33













20
40

























20





20


100
Sources:  Sae Text.

-------
million for a plant with a capacity of 1000 tons per day,-   However, PEI
reports that "the use of retrofitted- diaphragm cells may  necessitate a major
modification of cell components .,within about 3 to 5 years after completion of
retrofit because of severe operating environment."  Based on this information,
it is assumed that the most viable option for the chlor-alkali industry would
be to "convert" the existing diaphragm cells to membrane  cells at a cost of
$85 million for a plant with a capacity of 1000 tons per  day.  The disposal of
equipment that produces 1000 tons of chlorine per day is  estimated to cost
$3.4 million.

             1.3.13  Acetylene Cylinders

             The existing equipment can be readily converted to use asbestos-
substitute materials with minimum cleaning and without significant
modification.1"  Cleaning costs are expected to be insignificant.

        1.4  Results

        This section presents the results of applying the theoretical approach
discussed in Section 1.2 to the data presented in Section 1.3.  The results
are reported as a quasi-rent perpetuity per unit output and reformulation cost
perpetuity (these calculations use a 7 percent private rate of discount as
used in the A&CM), where applicable.  The refemulation cost perpetuity is
incorporated into the ARCM's quasi-rent calculations based on the baseline
output quantity, as discussed earlier.  We report these perpetuities here
because actual quasi-rent losses depend on the regulation being simulated.
The M.CM simulates the regulation on a year-by-year basis and calculates
losses in quasi-rents based on the market response to the regulation in that
year.

    Results are presented for each industry segment and are applicable to all
products mapping into a particular segment as shown in Exhibit B-l.  Exhibit
B-4 summarizes the results for those industry segments with no reformulation
costs and Exhibit B-5 presents the results for the industry segments with
anticipated reformulation costs.  Exhibit B-6 presents the quasi-rent losses
for all asbestos product markets assuming that use of asbestos fiber was
banned totally in 1987.   Thus, the quasi-rent losses reported here would be
the maximum quasi-rent losses possible.

             1.4.1  Asbestos.-Cement Pipe

             Existing equipment in this industry segment  is not transferable
into alternative use.  The least cost option available to firms in this
industry is to dispose of their existing equipment in a hazardous waste
landfill.   Total conversion costs are estimated to be $10.5 million
($9,900,000 + $600,000)  for a plant with an annual capacity of 3,472,222.22
     3^ Section 2 of this appendix.

     *3 er
        Section 2 of this appendix.
                                     B-14

-------
                           EXHIBIT B-ft.  QUASI-1ENIS FOR IHOUSTS? SEGMEHfS WITH HO BSFORHULA11OH COS1S
Asbestos Industry Segment
Asbestos-Cement Pipe
Papers and Felts
All except Pipeline Wrap
Pipeline Wrap

" Asbestos Roofing Felfcc
Vinyl-Asbestos Floor ftlec
Asbestos-Cement Sheet
Asbestos-Cement Shingle
Textiles and Packing
Sheet Gasketing
Color-alkali industry

Acatylene Cylinders
Transfer-
ability of
Capital
Ho

Yes
_ Yes

n/a
n/a
Ho
Ho
ton
Yes
Yes

TUB
Description of
Least Cost Option
Disposal in a hazardous
waste landfill

Clean and modify equipment
Clean end modify equipment

n/a
»/•
Dispose of all equipment
Dispose of all equipment
Ho significant action
Convert esfuipownt
Conversion to membrane
process
Ho significant action
Conversion
Cost
(dollars)
10,500,000

22,000
22,000

n/a
n/a
8,256,000
8,256,000
none
7,400,000
83,400,000

none
Annual Capacity to
*Aiich cost is
applicable
3,472,222.22 feetb

8,000 tons
1,230.769.23 squares"
*
n/a
n/a
30,000 squares
174,796.75 squares*
n/a
3,333,333,33 sq. yds,b
312.5 pieces'1

n/a
Quasi-Rent*
Perpetuity per
Quit Output
(dollars/unit)
0.21 / ton

0.19 / ton
0.001 / square

B/«
n/a
19.27 / square
3.31 / square
0.00 / ton
0.16 / sq. yd.
19,901.60 / piece

0.00 / piece
  Ihe firm's discount rat* is «ssunje
-------
                               EXHIBIT B-5.  QUASI -RESTS FOR INDUSTRY SEGHENTS WITH KEFQHMULATIOH COSTS
Transfer-
Asbestos Industry Segment/ ability of Description of
Asbestos Product Category Capital Least Cost Option
Conversion
Cost
(dollars)
Annual Capacity to
which cost is
applicable
Quasi -Rent8
Perpetuity per
Unit Output
(dollars/unit)
Reformulation '
Cost Perpatuity
(dollars)
Friction Products
18.
19,
20.
21.
22.
23.

24.
36.
37.
Drum Brake Linings
Disc Brake Pads, LMV (OEM)
Disc Brake Pads (BV>
Brake Blocks
Clutch Facings
Automatic Transmission
. Components
Friction Materials
Brian Brake Linings
Disc Brake Pads, DM? (OEM)
Yes
Yes
Yes
Yes
Yes
Yes

Yes
Yes
Yes
Convert equipment
Convert equipment
Convert equipment
Convert equipment
Convert equipment
Convert equipment

Convert equipment
Convert equipment
Convert equipment
1,095,000
1,095,000
1,095,000
1,095,000
1,095,000
1,095,000

1,095,000
1,095,000
1,095,000
15,000,000 pieces
15,000,000 pieces
15,000,000 pieces
15,000,000 pieces
15,000,000 pieces
15,000,000 pieces

15,000,000 pieces
15,000,000 pieces
15,000,000 pieces
0.005 / piece
0.005 / piece
0.005 / piece
0.005 / piece
0.005 / piece
0.005 / piece

0,005 / piece
0,005 / piece
0.005 / piece
248,500
308,000
24,500
154,000
31,500
10,500

105,000
248,500
308,000
Coatings mid Sealants
29.

30.

32.
33.
Roof Coatings
and Cements
Non-Soof Coatings,
Compounds, and Sealants
Missile Liner
Sealant Tape
Yes

Yes .

Yes
Yes
Convert equipment

Convert equipment

Convert equipment
Convert equipnent
none

none

none
none
n/a

n/a

n/a
n/a
0,00 / gallon

0.00 / gallon

0.00 / ton
0.00 / foot
40,600

78,400

12,600
7,000
Asbestos-Reinforced Plastics
   31.  Asbestos-Reinforced
          Plastics
Yes
         Convert equipment
n/a
               0.00 / ton
16,800
    The firm's discount rate is assumed to toe 7 percent.

    The reformulation cost perpetuity is a yearly total for the baseline output and IB not specified per unit output,
    incorporated in the quasi-rents as described in the text.
                                                                                   This  Is
  Sources:  See Text,

-------
        EXHIBIT B-6.  QUASI-RENT LOSSES ASSOCIATED WITH AH  BMEDIATE BAH OF ALL ASBESTOS PRODUCTS

1.
2.
3,
4,
5.
6.
7.
8,
9.
10.
11.
12.
13.
1*.
15,
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30,
31.
32.
33.
34.
35.
36.
37.

Product; Category
Conraercial Paper
Rollboard
Millboard
Pipeline Wrap
Beater-add Gaskets
High-grade Electrical Paper
Roofing Pelt
Acetylene Cylinders
Flooring Felt
Corrugated Paper
'Specialty Papers
Vinyl-Asbestos Floor Tile
Asbestos Diaphragms
Asbestos-Cement Pips
Flat A-C Sheets
Corrugated A-C Sheets
A-C Shingles
Drum Brake Linings (OEM)
Disc Brake Pads, LMV (OEM)
Disc Brake Pads (HVJ
Brake Blocks
Clutch Facings
Automatic Transmission Components
Friction Materials
Asbestos Protective Clothing
Asbestos Thread, Tarn, etc.
Asbestos Sheet Gasketing
Asbestos Packing
Roof Coatings and Cements
Hon-Roofing Coatings, etc.
Asbestos-Reinforced Plastics
Missile Liner
Sealant Tape
Battery Separators
Arc Chutes
Drum Brake Linings (A/M)
Disc Brake Pads, LMV (A/M)

Industry Segment
Classification
Papers and Felts
Papers and Felts
Papers and Felts
Papers and Felts
Papers and Felts
Papers and Felts
Asbestos Roofing Fait
Acetylene Cylinders
Papers and Felts
Papers and Felts
Papers and Felts
Vinyl-Asbestos Floor Tile
Chlor-Alkali Industry
Asbestos-CeiBent Pipe
Asbestos-Cement Sheet
Asbestos-Cement Sheet
Asbestos-Cement Shingle
Friction Products
Friction Products
Friction Products
Friction Products
Friction Products
Friction Products
Friction Products
textiles and Packing
Textiles and Packing
Sheet Gaiketing
Textiles and Packing
Coatings and Sealants
Coatings and Sealant*
Asbestos-Reinforced Plastics
Coatings and Sealants
Coatings and Sealants
Textiles and Packing
Arc Chutes
Friction Products
Friction Products

Conversion
Cost
Perpetuity
(S/unit)
0.19
0.19
0.19
0.001
0.19
0.19
0,00
0.00
0.19
0.19
0.19
0.00
19,801.60
0.21
19.27
19.27
3.31
0.005
0.005
0.005
0.005
0.005
0.005
0.005
0.00
0.00
0.16
0.00
0.00
0.00
0.00
0.00
0.00
***
***
0.005
0.005

Reformulation
Cost
Perpetuity
($)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2*8,500
308,000
24,500
154,000
31,500
10,500
105,000
0
0
0
0
40,600
78,400
16,800
12,600
7,000
#**
***
248,500
308,000

Dourest ic
Quasi -Rent
Loss
{'000 0>
0.00
0.00
1.58
4.24
44.80
1.89
0.00
0.00
0.00
0.00
1.18
0,00
2,763,737.60
45,188.12
1,421.68
0.00
8,352.69
5,693,81
4,040.04
361.20
2,504.67
910.72
154.11
2,122.82
O.QO
0.00
8,245.50
0.00
580.00
1,120.00
233.01
180.00
100 . 00
***
***
§,023.38
7,170.51
2,861,201.57
World
Quasi-Rent
Los a
('000 $>
0.00
0.00
1.58
10.61
45.70
1,89 -
0.00
0.00
0.00
0.00
1.18
0.00
2,763,737.60
45,766,53
1,634,93
1,062.33
11,443,19
6,547,88
4,807,65
361.20
2,529.71
1,028.97
154.11
2,122.82
0.00
0.00
8,822,69
0.00
580.00
1,120.00
240.00
180,00
100.00
**•*
*** -
10,376.89
8,532.91
2,871,210.37
Product is not included in ARCH sisnilationa.

-------
      *•! £
 feet.-30   This  implies a quasi-rent perpetuity of $0,21 per feet ([$10,500,000/
 3,472,222,22]  * 0.07) as shown in Exhibit B-4.37  Finally,  Exhibit  B-6  shows
 the maximum loss of quasi-rents possible in this market (i.e.,  if the product
 were  banned in 1987)  based on the quasi-rents for unit of output and the
 number of units of output in the industry,

             1,4.2  Friction Products

             The existing machinery in the  friction products  industry can be
 used  to manufacture non-asbestos friction products.   Total  conversion costs
 are estimated  $1,095,000 for a facility with an annual capacity of  15 million
 pieces of asbestos friction products.

    In addition to the conversion costs,  reformulation costs  of $600,000 are
 anticipated for each firm.   Since most of the firms  in this industry segment
 manufacture more than one type of friction  product,  the reformulation costs
 have  to be  considered for each product category.   Exhibit B-2 shows the
 product categories of the products manufactured by each of the  21 firms
 currently producing asbestos friction products.   The amount of  $600,000 is
 divided equally -among the products manufactured by a particular firm with the
 exception of firms that manufacture OEM and aftermarket drum  and disc brakes.
 For these firms the reformulation cost is considered to exist independently
 for OEM and aftermarket brakes;  therefore,  $600,000  is first  divided into the
 number of products assuming OEM and aftermarket brakes are  one  "combined
 product"  (i.e. ,  18 & 36 are treated as one  product and 19 & 37  are  treated as
 one product for this  purpose)  and then the  amount attributed  to this "combined
 product"  is doubled.-*"  The reformulation costs for  each product category are
 then  obtained  by summing across firms  in each category.   The  conversion costs
 are assumed to be same for all firms in this industry segment.

    Exhibit B-5 shows the quasi-rent perpetuity per  unit output and the
 reformulation  cost perpetuity for each product category in  this industry
 segment.  Finally,  Exhibit B-6 shows the  maximum loss of quasi-rents possible
 in this market (i.e.,  if the product were banned in  1987) based on  the  quasi-
 rents for unit of output and the number of  units  of  output  in the industry.
        In order to be consistent with the units reported in the asbestos use
and substitutes analysis, the units for A-C pipe are converted from tons to
feet (1 foot - 0.0144 tons).  Furthermore, the daily capacity has been
converted to an annual capacity here and later in the section by using a
factor of 250.  It is assumed that none of the processes considered are
continuous and that plants shut down for two weeks each year for maintenance.
     O "7
        The firm's discount rate is assumed to be four percent for all
industry segments. •
     n p
        This is done because the formulation of a substitute brakes for new
cars (OEM brakes) is assumed to be different from the substitute brakes for
existing cars (the aftermarket brakes).  The costs associated with such
reformulation may also be different, but in the absence of information the
known reformulation costs are counted twice.
                                     B-18

-------
              1,4.3   Papers  and Felts

    The  existing machinery  in the  papers  and felts  industry can readily be
converted  to  the manufacture  of substitute  products.   Total conversion costs
are estimated to be  $22,000 ($7,000 +  $15,000)  for  a  plant with an annual
capacity of 8,000 tons,  i.e.,  a quasi-rent  perpetuity of $0.19  per ton
([$22,000/8,000] * 0.07)  as shown  in Exhibit B-4.   However,  the quasi-rent
perpetuity for pipeline wrap  is shown  as  $0.001 per square since output of
pipeline wrap is measured in  squares.     Finally, Exhibit B-6 shows  the
maximum  loss  of quasi-rents possible in this market (i.e.,  if the product were
banned in  1987) based on  the  quasi-rents  for unit of  output and the  number of
units of output in the industry.

              1.4.4   AsbestosRoofing Felt

              The product  in this industry segment is  no  longer  manufactured in
the United States.

              1.4.5   Vinyl-Asbestos_FIoor  Tile

              The product  in this industry segment is  no  longer  manufactured in
the United States.

              1,4.6   Asbestos	Felt-backed.Vinyl  SheetFlooring

              The product  is no longer  classified as a separate  product since
it is an application of asbestos felt.

              1.4.7   Asbestovs-Cement.Sheet. .and. Shingles

              Existing equipment in this industry segment is not transferable
into alternative use.  The  least cost  option available to firms in this
industry is to dispose of their existing  equipment.   Total conversion costs
are estimated to be  $8,256,000 ($7,856,000  •+> $400,000) for an A-C sheet plant
with an  annual capacity of  30,000  squares and an A-C  shingle plant with an
annual capacity of 174,796.75  squares,^0  The implied quasi-rent-perpetuities
for A-C  sheet and shingles  are $19.27  per square ([$8,256,000/30,000]* 0.07)
and $3.31  per square [$8,256,000/174,796.75]  *  0.07)  respectively as shown in
Exhibit  B-4.   Finally, Exhibit B-6 shows  the maximum  loss of quasi-rents
possible in this market  (i.e.,  if  the  product were  banned in 1987) based on
the quasi-rents for  unit of output and the  number of  units  of output in the
industry.
        In order to be consistent with the units reported  in  the asbestos use
and substitutes analysis, the units for pipeline wrap are  converted from tons
to squares (1 square - ,0065 tons).  Therefore, the quasi-rent perpetuity for
pipeline wrap is $0.007 per square ([$22,000 /(8,000/0.0065)] * 0,04).

     *® In order to be consistent with the units reported  in  the asbestos use
and substitutes analysis, the units for A-C sheet are converted from square
yards to squares (1 square «= 100 square yards) and from tons  to squares
(1 square - 0.123 tons) for A-C shingle.  The factor used  for A-C shingle is a
weighted average of the factors for roofing and siding shingles.

                                   '  B-19

-------
             1.4.8  TextilesandPacking

             The existing equipment can be readily converted to use asbestos-
substitute materials with minimum cleaning and without significant
modification.  Cleaning costs are expected to be insignificant.  Therefore,
there are no quasi-rents to be lost in this industry segment.

             1.4.9  Sheet, Gasket:ing

             Existing equipment in this industry segment can be converted to
alternative use but with considerable expense.  Total conversion costs are
estimated to be $7.4 million ($7,200,000 + $200,000) for a plant with an.
annual capacity of 3,333,333.33 square yards, i.e., a quasi-rent perpetuity of
$0.16 per square yard ([$7,400,000/3,333,333.33] * 0.07) as shown in
Exhibit B-4.^  Finally, Exhibit B-6 shows the maximum loss of quasi-rents
possible in this market (i.e., if the product were banned in 1987) based on
the quasi-rents for unit of output and the number'of units of output in the
industry,

             1,4.10  Coatings and Sealants

             The existing equipment in this industry segment will require no
major equipment additions or modifications to convert the plant equipment to
the manufacture of substitute products.   In addition to the conversion costs,
reformulation costs of are anticipated for each firm.  Since most of the firms
in this industry segment manufacture more than one type of product, the
reformulation costs have to be considered for each product category.  Exhibit
B-3 shows the product categories of the products manufactured by each of the
49 firms currently producing asbestos friction products.  The amount of
$40,000 is divided equally among the products manufactured by a particular
firm except in cases where firms manufacture more than two products in which
case the reformulation cost is assumed to be $20,000 per product.  The
reformulation costs for each product category are then obtained by summing
across firms in each category.  Exhibit B-5 shows the quasi-rent perpetuity
per unit output and the reformulation cost perpetuity for each product
category in this industry segment.  Finally, Exhibit B-6 shows the maximum
loss of quasi-rents possible in this market (i.e.,  if the product were banned
in 1987) based on the quasi-rents for unit of output and the number of units
of output in the industry.

             1-4.11  Asbestos,,.,Reinforced Plastics

             The existing equipment used in the manufacture of asbestos-
reinforced plastics will not require major equipment additions or
modifications to convert the plant to manufacture products containing asbestos
substitutes.  A total reformulation cost of $240,000 (8 * $30,000) is
estimated, i.e., no quasi-rents and a reformulation cost perpetuity of $16,800
($240,000 * 0.07) as shown in Exhibit B-5.  Finally, Exhibit B-6 shows the
maximum loss of quasi-rents possible in this market (i.e., if the product were
banned in 1987) based on the quasi-rents for unit of output and the number of
        In order to be consistent with the units reported in the asbestos use
and substitutes analysis, the units for sheet gasketing are converted from
tons to square yards (1 square yard - 0.0021 tons).

                                    B-20

-------
units of output In the  industry.

             1.4.12  Chlor-Alkali  Industry

             The most viable option for  the ehlor-alkali  industry would be to
"convert" the existing  diaphragm cells to membrane cells.  Total conversion
costs for the chlor-alkali industry are  estimated to be $88.4 million  ($85
million + $3.4 million) for an annual capacity of 250,000 tons.  The use and
substitutes analysis indicates that on an average one diaphragm is used to
produce 800 tons of chlorine.^  since the asbestos fiber is used for
producing diaphragms, the output entity  in this  industry  is considered to be
number of diaphragms.   Therefore,  the conversion costs are applicable  to an
annual capacity of 312.5 diaphragms (250,000/800).  The quasi-rent perpetuity
can now be calculated as $19,801.60 per  diaphragm ([$88,400,000/312.5] * 0.07)
as shown in Exhibit B-4.  Finally, Exhibit B-6 shows the maximum loss  of
quasi-rents possible in this market (i.e., if the product were banned  in 1987)
based on the quasi-rents for unit  of output and  the number of units of output
in the indus try.

             1,4.13  Acetylene Cylinders
                             »

             The existing equipment can be readily converted to use asbestos-
substitute materials with minimum  cleaning and without significant
modification.   Cleaning costs are  expected to be insignificant.  Therefore,
there are no quasi-rents to be lost in this industry segment.
     42
        Appendix F of this report.

                                     B-21

-------
      2.   Capital Comrerti.bili.ty and Prodiict Market Exit  Costs...Memoranda

    A report by PEI Associates  concerning the costs of exiting the asbestos
product industries,
                                     B-22

-------
   COST OF CAPITAL INVOLVED IN CONVERTING
  ASBESTOS-PRODUCT MANUFACTURING EQUIPMENT
           TO ASBESTOS SUBSTITUTES
                   by

          PEI Associates, Inc.
           11499 Chester Road
         Cincinnati, Ohio  45246
         Contract No. 68-02-4248
        Work Assignment No. P2-1
               PN 3687-38
  U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF PESTICIDES AND TOXIC SUBSTANCES
                July 1987

-------

-------
                                  CONTENTS

                                                                     gage
Tables                                                               iii
1.   Introduction                                                     1
2.   Conversion Costs—Asbestos  Cement Pipe  Industry                   6
3,   Conversion Costs—Asbestos  Friction Products Industry            18
4.   Conversion Costs—Paper and Felts Industry                       28
5,   Conversion Status—Roofing  Felts Industry                        31
6.   Conversion Status—Vinyl-Asbestos Floor Tile Industry            32
7.   Conversion Status—Asbestos Felt-Backed Vinyl Sheet
      Flooring Industry                                              33
8.   Conversion Costs—Asbestos  Sheet and Shingle Industry            34
9.   Conversion Costs—Textiles  and Packing Industry                  39
10.  Conversion Costs—Asbestos  Sheet Basketing Industry              43
11.  Conversion Costs—Coatings  and Sealants Industry                 46
12.  Conversion Costs--Asbestos-Reinforced Plastics Industry          51
13.  Conversion Costs—Mining and Hilling Industry                    56
                                                       #'•
14.  Retrofit/Conversion Costs—Asbestos Diaphragm Cells in
      the Chlor-Alkali  Industry                                       59
References                                                           68

-------

-------
                                   TABLES                         '   •

Number          '                                                      page
1-1       Listing of Asbestos-Containing Products by Industry          3
1-2       Summary of Cost Data on New and Used Equipment for the
           Manufacture of Asbestos-Containing Products                 4
2-1       Estimated Cost of New AC Pipe Plant Installation             9
2-2       Estimated Cost of New AC Pipe Machine Installation          10
2-3       AC Pipe Equipment Options                                   12
2-4       Estimated Costs for AC Pipe Plant Closure Options           16
3-1       Asbestos Friction Products Data Summary                     19
3-2       Friction Products Equipment Options                         21
3-3       Estimated Cost of Friction Products Plant Installation      23
3-4       Estimated Cost of Friction Products Manufacturing
           Equipment Installation                                     24
4-1       Estimated Cost of a New Paper Facility With a Capacity
           of 8000 tons/yr                                            29
8-1       Estimated Cost of an AC Sheet Facility With a Capacity of
           3,000,000 square yards/yr                                  37
8-2       Estimated Cost of AC Sheet and Shingle Products
           Equipment Installation                                     38
9-1       Estimated Cost of an Asbestos-Reinforced Plastics
           Facility With a Capacity of 4000 tons/yr                   42
10-1      Estimated Cost of -a New Sheet Gasketing Facility With
           a Capacity of 28 tons/day                                  45
11-1      Estimated Cost of a New Coatings and Sealants Facility
           With a Capacity of 700 Gallons/Batch (2100 gallons/day)     49
(continued)
                                   iii

-------
                             TABLES (continued)

Number                                                                Page
12-1      Estimated Cost of an Asbestos-Reinforced Plastics
           Facility With a Capacity of 4000 tons/yr                   54
13-1      Estimated Cost of an Asbestos Milling Facility With a
           Capacity of 34,000 tons/yr                                 57
14-1      Membrane Cell Retrofit/Conversion Costs                     65
14-2      Installation Costs of 1000 tons/day Chlorine Plant          66
                                     IV

-------
                                  SECTION 1
                                INTRODUCTION

     The U.S. Environmental Protection Agency's Office of Pesticides and
Toxic Substances (formerly the Office of Toxic Substances) has proposed a
regulation to ban the use of asbestos in the commercial sector over a 10-year
period.  This proposed regulation prompted numerous comments, some during the
comment period and others later, during the legislative hearings.
     To address the comments regarding the economic impact of the proposed
regulation, the Agency contracted PEI Associates, Inc., to investigate the
equipment factor in the "following asbestos-related industries (listed in the
order of their priority):
     1)   Asbestos cement pipe
     2)   Asbestos friction materials
     3)   Asbestos papers/felts
     4)   Asbestos roofing felts (saturated)
     5)   Asbestos floor tiles
     6)   Asbestos felt-backed vinyl sheet flooring
     7)   Asbestos cement sheet and shingle
     8)   Textiles and packing
     9)   Sheet gasketing
    10)   Coatings and sealants
    11)   Asbestos-reinforced plastics
    12)   Asbestos mining and milling
    13)   Chlor-alkali
    14)   Acetylene cylinder filler
    15)   Arc chutes
     The specific tasks to be accomplished were 1) to determine the type of
equipment used in each industry segment; 2) to determine the cost of this
equipment; 3) to determine whether the equipment is convertible to asbestos-
substitute materials, and if not, what its scrap value is; and 4) to estimate
the costs of converting a plant to the use of asbestos-substitute products.
     In this report, a section is devoted to each asbestos industry segment
studied.  These sections  include the economic impact of scrapping and dispos-
ing of current equipment  (if applicable), any necessary cleanup prior to

                                      1

-------
Installing new equipment, cleanup and decontamination of equipment that must
be scrapped, resale value of abandoned equipment, scrap value of affected
equipment, and the net loss expected to be incurred by each industry segment
as a result of necessary equipment replacement.  How the costs were derived
is also explained.  The sections on acetylene cylinder filler and arc chutes
contain confidential business information (CBI) and are not included in this
report.
     The estimated costs presented herein have an accuracy of about plus or
minus 30 percent (study estimate).  So that the cost numbers can be easily
reconstructed, however, sums of values of components used to arrive-at equip-
ment option estimates have not been rounded; e.g., the sum of $750,000 and
$345,000 is presented as $1,095,000 instead of $1,100,000 (as would be dictated
by good engineering practices).
     Table 1-1 lists the industry segments covered in the report and the
products involved in each.  Table 1-2 summarizes the equipment cost data
collected, which served as a basis for the costs presented in the individual
sections.

-------
       TABLE  1-1.  LISTING OF ASBESTOS-CONTAINING PRODUCTS BY INDUSTRY
      Capita] conversion memos
      Asbestos products included
AC pipe

Asbestos friction materials
Asbestos papers/felts
Asbestos roofing felts (saturated)

Asbestos floor tile

Asbestos ftit-backed vinyl sheet
 flooring

AC sheet and shingle



Textiles and packing
Sheet gasketing

Coatings and sealants


Asbestos-reinforced plastics

Asbestos mining and milling

Chior-alkali industry

Acetylene cylinder filler

Arc chutes
AC pipe and fittings

Disc brake pads (heavy vehicles)
Disc brake pads (light and medium
 vehicles)
Drum brake linings (light and medium
 vehicles)
Friction materials (industrial and com-
 mercial)
Brake blocks
Clutch facings
Automatic transmission components
Flooring felt
Unsaturated roofing felt
Beater-add gaskets
Commercial paper
Corrugated paper
High-grade electrical paper
Millboard
Pipeline wrap
Roll board
Specialty papers

Saturated roofing felt

Vinyl-asbestos floor tile
Asbestos felt-backed vinyl sheet
 flooring

Corrugated asbestos-cement sheets
Flat asbestos-cement sheets
Asbestos-cement shingles

Asbestos textiles - cloth
Asbestos textiles - thread, yarn, lap,
 etc.
Asbestos packing

Asbestos sheet gasketing

Adhesives and sealants
Paints and surface coatings
Asbestos-reinforced plastics

Asbestos mining and milling
Chior-alkali industry

Acetylene cylinder filler

Arc chutes

-------
TABLE 1-2.   SUMMARY OF"  COST DATA ON NEW AND USED EQUIPMENT FOR THE MANUFACTURE OF ASBESTOS-CONTAINING PRODUCTS
Industry
AC pipe
friction














Cylinders
Textile






At sheet

















Equipment type8
P
p
P

«
8
A
A
P
P


P
p
P
H

P
P
P
P
P
A
8
P
P








P








- pipe machine
- mixer
- molding

- lathes, etc.
- boiler
- fabric filter
- scrubber
- mixer
- molding


- cutter
- molding
- oven
- drill, grind

- gas cyl. ntfg.
- blendline
- card
- spinning
~ winding
- fabric filter
- boiler
- wing makeup
- mixer








- sheet ml 11








New
value, $
2,750,000
37,000
3?. 000
20,000
125,000
10,000
10,000
50,000
100,000
250,000
30,000
30,000
214,000
360,000
165.000
20.000
15,000
60,000
81,000
40,000
250,000
40,000
720,000
1,496,000
75,000
1,800,000
75,000
40,000
90,000
110,000
100,000
90,000
90,000
90,000
90,000
110.000
110,000
350,000
200,000
200,000
200,000
200,000
200,000
200,000
250,000
250,000
Resale
value, $
0
4,000
12,000
5,000
20,000
5,000
0
500
10,000
0
0
15,000
109,000
184,000
84,000
10,000
8,000
31 ,000
43,000
20,000
50,000

























Age,
years
7
20
10
40
20
20
20
20
4
20
25
20
20
20
20
20
20
20
20
20
10
20
40
60
40
18
11
H
20
20
20
21
21
21
21
0
I
30
25
25
25
25
20
20
12
12
Reported
scrap
value, $
(60,000)
50
50
50
200
200

100
0
0
0










320
2,880
2,700
480
1,440
800
480
60
100
80
80
80
80
80
80
60









Scrip Calculated
weight, scrap value,
tb $50/ton basis
60
0.5
1
1.5













4
36
34
6
18
10
6
3
5
4
4
4
4
4
4
3
30
22
22
22
22
22
22
40
40
3,000
25
50
75













200
1,800
1,700
300
900
500
300
150
250
200
200
200
200
200
200
150
,500
,100
,100
,100
,100
1,100
1,100
2,000
2,000
Reported
ratio
of scrap
value to
new value
-0.022
0.001
0.001
0.003
0.002
0.020

0.002
0.000
0.000
0.000










0.008
0.004
0.002
0.006
0.001
0.011
0.012
o.oo'i
0.001
0.001
0.001
0.001
0,001
0.001
0,001
0.001









CaleuTit-
ed ratio
of scrap
value to
new value
0.0Z4
0.003
0.005
0.002













0.005
0.003
0,001
0.004
0,001
0,007
0.008
0.002
0.002
0.002
0,002
0.002
0.002
0.002
0,002
0.001
0.004
0.006
0,006
0.006
0.006
O.OOS
0.006
0.008
0.008
Ratio
of resile
value to
new value
0.108
0.324
0.250
0.150
0.500

0.010
0.100


0,500
0.509
0.511
0.509
0.500
0.533
0.517
0.506
0.500
0.200


























-------
TABLE  1-2     (continued)



Industry
Sheet gasket
Coat »ml seal










Plastics


Mine and sfll









P
P
P
P
A
P
A
P


A
P
A
P

t
f
f
f
f
A



Equipment type3
- paper mach.
- mixer
- fluffer
- sixer
- cyclone
- mixer
- fabric filter
- mixer


- fabric filter
- charge hopper
- fabric filter
- mixer

- mine
- crush
- dry
- mill
- tailings
- fabric filter
B - utilities
Buildings
Average




New
value, $
12,000,000
60,000
9,000
80,000
15,000
275,000
70,000
5,000
15,000
20,000
7,000
500
12,500
12.500
20,000
6,000.000
2,000,000
1,200,000
5,600,000
400,000
2,600,000
1,200.000
6,000,000



Resale
value, $
50,000
5,000
0
5,000
0
125,000
15,000

1,500
500
500
0
0

4,000
600,000
80,000
40,000




12,000



Age,
years
70
20
5
15
10
2
6
20
15
30
7
7
11
11
11
8
20
21
27
20
22
27
18


Reported
scrap
value, $





0
0





0



40,500
13,000
74,000
8,500
27,000
20,000
99,000


Scrap
weight,
Ib
100
1
1.2
5
1
60

3
,1,2






1090
6?S
215
1230
135
450 •
100
2500


Calculated
scrap (ralut.
ISO/ton basis
5,000
50
60
250
50
3.000

150
60






54,500
33,750
10,750
61.500
6,750
2Z.500
5,000
125,000

Reported
ratio
of scrap
value to
new value





0,000
0.000





0.000



0,020
0.011
0.013
0.02!
0,010
0,017
0.017
0.005
Ca Iculst™
ed rttio
Of scrap
value to
new value
0.000
0,001
0.007
0.003
0.003
0.011

0,030
0.004






0.009
0.017
0.009
0.011
0.017
0,009
0.004
0.021
0.006
Ratio
of resale
value to
new value
0.004
0,083

0.063

0.455
0.214

0,100
0.025
0.071



O.fOO
0.100
0,040
0.033




0.002
0.254
P *; n**n*"tt«e
        b - boiler or utilities
        A * air pollution control
        N - miscellaneous

-------
                                  SECTION 2
               CONVERSION COSTS—ASBESTOS CEMENT PIPE INDUSTRY

     Determination of the economic impact of a potential  ban by the U.S.
Environmental Protection Agency (EPA) on the manufacture of asbestos cement
(AC) pipe requires data on the cost, resale value, and convertibility of  the
manufacturing equipment.  PEI was contacted by the Office of Pesticides and
Toxic Substances to provide these data to ICF, Incorporated, for use in the
economic model being used to develop the impact analysis,
     The AC pipe industry was investigated with respect to equipment costs
and other factors that might affect conversion.  Currently, AC pipe is
manufactured at only five plants {owned by three different companies);
          J-M Manufacturing Company
               Dem*son, Texas
               Stockton, California
          Certainteed Corporation
               Hillsboro, Texas
               Riverside, California
          CAPCO Pipe Company, Inc.
               Van Buren, Arkansas
PEI contacted these suppliers of AC pipe by telephone and/or letter.  All  of
them responded in some manner.  Site visits were made to J-M's Stockton,
California, plant and Certainteed's Riverside, California, plant.  CAPCO's
response to PEI's request for information was very limited, but further
information on the Van Buren, Arkansas, plant was obtained from the Arkansas
Department of Air Pollution Control and Ecology.
     Most AC pipe is used for water mains (pressure pipe) and sewer lines
(nonpressure pipe).  Several factors have contributed to the increase in  the
number of plants producing AC pipe in recent years to those listed.  Among
these are the potential regulation of asbestos, competition from makers of
substitute pipe [e.g., polyvinyl chloride (PVC) pipe], and the drop in sewer
construction resulting from EPA grant cutbacks in 1978.

-------
PRODUCTION EQUIPMENT

     Despite the fact that each manufacturer designed its own plant or

plants, the equipment components at all the plants appeared to be similar and
generally can be grouped as follows:

     Raw material receiving and handling

          Bag opener and fluffer
          Ball mill for grinding sand to silica flour
          Mixers for dry materials (silica, cement, asbestos)
          Blenders for slurry (water, silica, cement, asbestos)
          Conveyors (screw and/or flat)
          Scales and auxiliary equipment

     AC j3ipe product 1 on

          Pipe machine
          Mandrels
          Drying ovens for initially formed pipe
          Curing autoclaves
          Pipe moving equipment (fork lifts, "mules," conveyors, etc.)

     Product handVj ng and testing

          Hydrostatic testing
          Pipe cutting line
          Pipe lathes/milling machines
          Conveyors and/or other moving equipment (e»g., overhead cranes)
          Shipping and other miscellaneous equipment

     Support equipment

          Boilers for steam generation
          Fabric filters for air pollution control
          Storage silos
          Spare parts, motors, pumps, etc.

Each component was evaluated to determine its cost as new equipment,  its

convertibility to other uses, its resale value, and its scrap value.   Also

determined was the cost of corresponding new equipment versus the cost of

converting the AC pipe equipment.

-------
REPLACEMENT COST OF EXISTING EQUIPMENT
     New equipment for AC pipe is usually either custom-designed by the
manufacturer or purchased and modified by the manufacturer.  In 1964, a new
200-ton/day greenfield facility* cost $9 million (this cost includes all
land, buildings, and equipment).1  Based on the Chemical Engineering (CE)
Plant Cost Index,2, this plant would have cost $28 million in 1985.  At the
same company, a new pipe machine and associated equipment was installed in a
Texas plant in 1979 for $8 million.  Based on the CE Plant Cost Index, this
facility would have cost $11 million in December of 1985.  Factors from
Peters and Timmerhaus3 have been used to break down these total costs into
subcategories.
     Tables 2-1 and 2-2 show the estimated cost breakdown for installing a
complete 200-ton/day AC pipe plant from the ground up, and for installing a
single AC pipe production line with the necessary ancillary equipment,
respectively.  In the latter case, the cost assumes the infrastructure (i.e.,
the underlying base, building, and basic support systems) already exists.
The manufacturer did not specify what other equipment was added during this
pipe machine addition, but it is likely that equipment such as the bag opener
and fluffer, boilers, mandrels, and pipe testing and cutting equipment were
not needed.  During a visit to a similar plant, PEI found that pieces of
equipment appeared to be capable of supporting multiple pipe machines.

ASBESTOS SUBSTITUTION OPTIONS
     Cement pipe manufacturers indicated that asbestos was the only acceptable
fiber for use in a fiber-cement pipe effort by U.S. AC pipe manufacturers to
find a substitute fiber.  Very little equipment used in the manufacture of AC
pipe can be used to manufacture PVC pipe.  The two products use entirely
different processes and raw materials.  Scales, transfer equipment (such as
conveyors and tow motors), air pollution controls, and storage silos might be
usable in the manufacture of PVC pipe.  Boilers are not needed because steam
is not used in the production of PVC pipe.  The transfer equipment for AC
*
  "Greenfield facility" refers to one built from scratch on previously
  unoccupied land.

-------
   TABLE 2-1.  ESTIMATED COST OF NEW AC PIPE PLANT INSTALLATION
                      (December 1985 dollars)
               Component
 Percent of
total capital
 investment
  Cost of
equipment,
  $1000
Direct costs
  Purchased equipment                           20
  Purchased equipment installation              10
  Instrumentation and controls (installed)        4
  Piping (installed)                             6
  Electrical (installed)                          2
  Buildings (including services)                 6
  Yard improvements                              2
  Service facilities (installed)                10
  Land                                          _l

          Total  direct costs                    61
                  5,600
                  2,800
                  1,120
                  1,680
                    560
                  1,680
                    560
                  2,800
                    280

                 17,080
Indirect costs
Engineering and supervision
Construction expense
Contractor's fee
Contingency
Total indirect costs
Total fixed-capital investment
Working Capital
TOTAL CAPITAL INVESTMENT

7
7
5
•_5
24
85
15
100

1,960
1,960
1,400
1,400
6,720
23,800
4,200
28,000

-------
TABLE 2-2,  ESTIMATED COST OF NEW AC PIPE MACHINE INSTALLATION
                    (December 1985 dollars)


Component
Direct costs
Purchased equipment
Purchased equipment installation
Instrumentation and controls (installed)
Piping (installed)
Electrical (installed)
Buildings (including services)
Yard improvements
Service facilities (installed)
Land
Total direct costs
Indirect costs
Engineering and supervision
Construction expense
Contractor's fee
Contingency
Total indirect costs
Total fixed-capital investment
Working Capital
TOTAL CAPITAL INVESTMENT
Percent of
total capital
investment

25
10
5
10
5
0
0
5
_0
60

10
10
5
_5
30
90
10
100
Cost of
equipment,
$1000

2,750
1,100
550
1,100
550
0
0
550 •
	 0
6,600

1,100
1,100
550
550
3,300
9,900
1,100
11,000
                               10

-------
pipe also has about twice the capacity that is required for PVC pipe; therefore,
it probably would be sold.1*  Also, because silos and air pollution controls
are generally not constructed so as to be moved, if they cannot be used in
place, purchasing new ones generally costs less.

CONVERSION COSTS
     Most of the equipment in place at an AC pipe plant is unique to AC pipe
manufacturing and cannot be used for other purposes.  Also, the extent of
equipment cleanup required before such equipment can be sold is uncertain.
Further, it is not known whether discarded equipment must be treated as a
hazardous waste and sent to a hazardous waste landfill.  Most of the equip-
ment in use represents older technology (i.e., older than 10 years), and
would be difficult to salvage for parts, motors, or auxiliary equipment
because it is less efficient than newer equipment and often nearing the end
of its useful life.  The pipe production equipment [such as the pipe machine
and mandrels, some pipe moving equipment ("mules"), and precuring ovens] and
product testing and handling equipment (such as the hydrostatic testing
equipment, pipe cutting line, pipe lathes, and milling machines) are special-
ized equipment and could only be sold to another AC pipe producer.  Some
equipment (such as conveyors, storage silos, and fabric filters for air
pollution controls) are readily convertible to other industries, but are not
readily salable because new ones can be purchased for less than it would cost
to dismantle and move these relatively fragile pieces of equipment.  Equip-
ment that may have resale value includes ball mills, blenders and mixers,
scales, autoclaves, fork lifts and other mobile equipment, and boilers.  Much
of this equipment also may have minimal (or zero) resale value because the
technology is old, cleanup costs are high, and market demand is limited.
     In summary, the five options available for all the equipment are 1) to
clean it up and sell it for scrap, 2) to leave it in place, 3) to send it to
a hazardous waste landfill, 4) to clean it up and send it to a nonhazardous
waste landfill, and 5) to clean it up and sell it as used equipment.  The
                                      11

-------
leave-in-pi ace option is not considered here because it is assumed that all
equipment will eventually be removed to make room for other processes or in
preparation to sell the building.  Table 2-3 summarizes the options available
for the major equipment at an AC pipe plant.
                    TABLE 2-3.  AC PIPE EQUIPMENT OPTIONS
Convert to
substitute
Process process
Raw material receiving and handling
Bag opener and fluffer
Ball mill for grinding sand to
silica flour
Mixers for dry materials (silica,
cement, asbestos)
Blenders for slurry (water,
silica, cement, asbestos)
Conveyors (screw and/or flat) x
Scales and auxiliary equipment x
AC pipe production
Pipe machine
Mandrels
Drying ovens for initially formed
pipe
Curing autoclaves
Pipe moving equipment (fork lifts.
"mules," conveyors, etc.)
Product handling and testing
Hydrostatic testing
Pipe cutting line
Pipe lathes/milling machines
Conveyors and/or other moving x
equipment (e.g., overhead cranes)
Shipping and other miscellaneous
equipment
Support equipment
Boilers for steam generation
Fabric filters for air pollution x
control
Storage silos x
Spare parts, motors, pumps, etc.
Resell to
nonasbestos
industries


x

x

x

x
x





x
x





x

x


x
x

x
x
Sell
for
scrap

x
x

x

x

x
x

x
X
X

X
X


X
X
X
X

X


X
X

X
X
Send to
landfill

x
X

X

X

X
X

• X
X
X

X
X


X
X
X
X

X


X
X

X
X
                                      12

-------
Most of the major equipment components are not convertible—either to equip-
ment for making substitutes for AC pipe (PVC, cast iron, and steel pipe) or
to equipment for producing products in other industries.  With good mainte-
nance, the useful life of most AC pipe production equipment should be about
25 years.  AC pipe plants are prolonging equipment life by emphasizing main-
tenance instead of buying new equipment, however, because of the potential
ban on AC pipe production.  This will tend to lower resale value and the re-
maining useful life of the equipment when the plants try to convert or resell
the equipment.  Furthermore, all the equipment is likely to enter the market
at the same time, which will further depress the sale price.  Telephone in-
terviews with used equipment dealers indicate that asbestos processing equip-
ment would be very hard to sell for the following reasons:  1) the potential
for asbestos-related liability, and 2) in the period between the announcement
banning asbestos and the mandatory plant closing, the equipment probably
would receive minimum maintenance and thus be marginally operable.
     Neither conversion nor resale of the AC pipe equipment that has been
shut down to date has been significantly successful.  J-M Manufacturing had
four pipe machines in 1966, but now has only one in operation.1*  One of the
other machines has been scrapped, and the remaining two are inoperable and
would be sold if a buyer could be found.  J-M has received a bid of $60,000
to remove and bury a 10-foot machine in their Texas plant.  This amount did
not include cleanup of the removal site.  The Johns-Manville (former owners
of the J-M AC pipe facilities) Long Beach, California, plant was closed and
the equipment was removed in exchange for the scrap value of the steel, but
the dismantler claimed that he lost money on this effort.  The 13-foot pipe
machine at Manville's Greens Cove, Florida, plant was given to an Indonesian
firm (IGB) in exchange for its removal.  Manville, however, reportedly spent
approximately $130,000 to clean and repair the AC pipe manufacturing area.1*
In addition, IGB claimed that they would have been better off by buying new
equipment.  Certainteed has also shut down plants in the past (three) and
have only been able to obtain the salvage value of the scrap metal from these
plants.
*
  Personal communications from Mr, Jim Mercer, J. Little Mercer Company,
  Inc., Rehoboth, MA, September 29, 1986; Mr. Lawler, Lawler Company,
  Metuchen, NJ, September 29, 1986; Mr. Dennis Herndos, Transamerica
  Equipment Company, Inc., Northport, AL, September 29, 1986.

                                      13

-------
     Based on the above reported costs of removing a pipe machine, repairing
and cleaning up the area from which the machine was taken, and using a 0.6
plant scale index for escalating the cost of removing and burying a 10-ft
machine to that required for a 13-foot machine, the cost of removal and
landfill of a 200-ton/day, 13-foot AC pipe machine would be about $200,000
($130,000 plus $70,000).  This cost includes disassembling the equipment,
removing it to a hazardous waste landfill, and cleaning up and repairing the
area from which the equipment was removed.  Tables 2-1 and 2-2 show that the
value of the equipment required for the addition of a pipe machine accounts
for approximately 50 percent of the cost of all the equipment required for an
AC pipe plant.  Assuming that removal, landfilling, and repair and cleanup of
other plant components will involve activities similar to those for removing
the pipe machine, the cost would be about $400,000 (not including general
cleaning of the building so that it can be used for other purposes).  The
cost of vacuuming the building and washing down walls, ceilings, and floors
should be about $0.26 per square foot.5  Based on PEI asbestos cleanup
experience, the cost of these activities is only about 25 percent of the
total cost of the cleanup.  These other costs include preparing and isolating
the cleanup area, handling and transferring the collected asbestos dust,
landfilling the wastes in an approved hazardous waste landfill facility, and
demobilization.  This brings the total cleanup cost to approximately $1.00
per square foot.  Based on an estimated building size for a 200-ton/day pipe
plant of approximately 300 feet by 300 feet with a 20-foot-high ceiling, the
building cleanup would cost $200,000.  Thus, the total cost of landfilling
all plant equipment in a hazardous waste landfill, plus building cleanup,
would be $600,000 ($200,000 plus $400,000).
     The preceding costs are based on sending the scrap equipment to a
hazardous waste landfill without any significant decontamination of the
various pieces.  A contractor who specializes in equipment cleanup compared
cleaning a machine contaminated with asbestos to the physical activity
required to clean corrosion.  The latter requires disassembly of the machine,
removal of the corrosion, and reassembly of the machine.  Although asbestos
is easier to remove than corrosion, having to wear protective clothing
reduces the workers' productivity, so the costs should be similar.  Based on
                                      14

-------
this analogy, cleaning of a machine that has been handling asbestos-containing
materials would cost about 25 percent of the replacement value.  Of course,
only equipment that is to be resold would require reassembly; equipment to be
sent to a sanitary landfill would require only disassembly and cleanup.  When
no reassembly is involved, 10 percent of the replacement value of the equip-
ment is a reasonable estimate.  Based on the equipment costs in Tables 2-1
and 2-2, cleaning the equipment so that it could be sent to a sanitary
landfill or sold as scrap would be $275,000 for a pipe machine alone (10
percent of purchased equipment cost) and $560,000 for all the equipment in
the plant.  Cleaning and reassembling the equipment for resale would be
$690,000 for a pipe machine (25 percent of purchased equipment cost) or
$1,400,000 for the entire plant's equipment.  Another $260,000 (two times
$130,000) should be added for the subsequent cleanup and repair of the
equipment areas and an additional $200,000 for building decontamination so
                              *
that it can be sold or used for other purposes.
     Based on conversations with AC pipe manufacturers,1* there is no U.S.
Market for AC pipe machines.  The best that an AC pipe machine owner can
expect is to trade the pipe machine to a foreign manufacturer for removal,
and this has not proved to be very successful.%  Used equipment dealers
usually pay from 20 to 35 percent of new equipment cost for used equipment
                                 *
and sell it for 30 to 50 percent.   Considering the probable poor condition
of equipment used to produce AC pipe, dealers will probably pay no more than
20 percent for usable equipment that has been decontaminated.  Furthermore,
only equipment such as ball mills, mixers, fork lifts, and autoclaves are
likely to have any resale value (see Table 2-3).  Conveyors, boilers, air
pollution control  equipment, and spare parts have little resale value unless
the equipment is on skids and was designed to be relatively portable.   At
best, other plant equipment can be resold for 20 percent of its value.
Subtracting the AC pipe machine and related equipment cost in Table 2-2 from
*
  Personal communication from Mr. Jim Mercer of J. Littler Mercer Company.,
  Inc., Rehoboth, MA, September 29, 1986.
  Personal communications from Mr. Jim Mercer of J. Little Mercer Company,
  Inc., Rehoboth, MA; Mr. Lawler, Lawler Company, Metuchen, NJ; and Mr.
  Dennis Herndos, Transamerica Equipment Company, Inc., Northport, AL, all on
  September 29, 1986.
                                      15

-------
the total equipment cost in Table 2-1 yields an equipment value  of $2,850,000

if purchased new.  This value can actually be much lower, however,, if the

equipment was not designed to be moved (e.g., storage silos  and  air-pollution-

control equipment).  The maximum market value of this equipment  would be
$570,000.  If cleanup costs for this equipment (25 percent of $2,850,000 or

$710,000) are considered, reselling this portion of AC pipe  plant equipment

would cost the plant a net of $140,000 plus $130,000 for cleanup and repair

of the plant area, for a total of $270,000.  Table 2-4 summarizes these

costs.

        TABLE 2-4.  ESTIMATED COSTS FOR AC PIPE PLANT CLOSURE OPTIONS
                           (December 1985 dollars)
Equipment
AC pipe machine and directly
related equipment
Other plant equipment (mixers,
Hazardous
waste
landfill8
' 200,000
200,000
Cleanup
and
resale
200,000C
270,000
Cleanup and
sanitary .
landfill8*0
462,000
472,000
a
Cleanup
and sale
as scrap
391,000
401,000
 mills, fork lifts, autoclaves,
 etc.)

All plant equipment plus build-
 ing cleanup for reuse
600,000   670,000    1,144,000
992,000
a Includes cost of cleanup and repair of building area where equipment has
  been removed.
b All equipment is sent to a sanitary landfill.  A significant part of the
  landfill cost is for removing heavy equipment from the plant and hauling it
  to the landfill.  Assume that only 20 percent of the $70,000 for removal
  and landfill is hazardous waste landfill costs and sanitary landfill cost
  is approximately 10 percent of hazardous waste landfill cost (e.g., $15 per
  cubic yard compared with $150 per cubic yard).

c Not sellable.  Cost presented includes removal of equipment, sending it to
  a hazardous waste landfill, and cleanup and repair of the equipment area.


EQUIPMENT RESALE VALUE

     The equipment can also be disassembled, cleaned, and sold as scrap, in

which case no reassembly is necessary.  Based on information acquired through

telephone interviews with asbestos users in several industries, the scrap
                                      16

-------
value of equipment is approximately 0.5 percent of the purchase price of the
equipment.  Thus, the scrap value of a pipe machine would be approximately
$14,000 and the scrap value of all of the plant's equipment would be $28,000.
When the required equipment cleanup is considered, the net cost to the plant
would be $261,000 ($275,000 less $14,000 scrap value) for the pipe machine by
itself and $532,000 for all the plant's equipment.  Including repair and
cleanup of the equipment area and overall building cleanup would add an
estimated $460,000 to these costs.
     The time required for the activities discussed can vary widely,
depending on availability of equipment inventory, selection of a firm for
equipment and building cleanup, ability to find a used equipment dealer, and
how long it takes to obtain any permits required by Federal, State, or local
authorities (e.g., onsite landfill permit, if applicable).  The time and
costs of equipment and building cleanup also vary with current housekeeping
practices and conditions.  The actual equipment cleanup and removal from the
building would require an estimated 2 months, and the building cleanup would
require another 2 months.  Planning, obtaining permits, and selecting
contract firms for the cleanup and equipment removal efforts could require
another 2 to 6 months.  Thus, total time requirements could range between
about 6 and 10 months.

GENERAL COMMENTS
     The remaining useful life of the AC pipe equipment at existing plants is
not known.  Most of the equipment in U.S. plants appears to be 20 to 30 years
old,1*1* but with proper maintenance (one 200-ton/day plant spends approxi-
mately $100,000 to $150,000 per year for maintenance), it appears that plant
equipment could last for several more years.  One plant that was shut down in
the late seventies was built in 1928 and had never replaced a pipe machine.
     The difference in the operating rates of AC pipe equipment and PVC pipe
equipment is irrelevant to this study because AC pipe equipment is not con-
vertible to PVC pipe production.
     Labor requirements for the production of AC pipe and PVC pipe differ
greatly.  The forming line for AC pipe requires a seven-man crew, whereas it
takes only one person to operate a PVC line.1*
                                       17

-------
                                  SECTION 3
            CONVERSION COSTS—ASBESTOS FRICTION PRODUCTS INDUSTRY

     Determination of the economic impact of a potential ban by the U.S.
Environmental Protection Agency (EPA) on the manufacture of asbestos friction
products requires data on the cost, resale value, and convertibility of the
manufacturing equipment.  PEI was contracted by the Office of Pesticides  and
Toxic Substances to provide these data to ICF, Incorporated, for use in the
economic model being used to develop the impact analysis.
     Friction products are used in many kinds of industrial and commercial
equipment, including the following:  automobiles; off-road vehicles,
including earth-moving equipment such as tractors, combines, and lawn mowers;
aircraft; railroad cars; mining, drilling, and construction equipment, snow-
mobiles; elevators; washing machines; towraotors; chain saws; and heavy
equipment such as that used in various manufacturing establishments.
     PEI contacted various suppliers of asbestos friction products to obtain
information related to asbestos-substitution problems and associated costs.
In general, the most difficult part of converting to an asbestos substitute
appears to be identifying a substitute material that has the asbestos-like
properties such as high and stable frictions under heat, strength, wear
resistance, and flexibility that are required for various brake and clutch
lining products.  The substitute materials currently being used (e.g., fiber-
glass, mineral wool, and Kevlar) are also considerably more expensive than
asbestos materials.
     Table 3-1 summarizes the information PEI obtained through contacts with
asbestos friction product manufacturers.

PRODUCTION EQUIPMENT
     The various manufacturers contacted and visited appeared to use similar
equipment.  Except perhaps for some of the molds, the same plant equipment
                                      18

-------
                             TABLE  3-1.     ASBESTOS FRICTION  PRODUCTS  DATA  SUMMARY
Plant
£


F
G
H
I
J
K
Plant sire.
ft1, or
capacity.
700



1,300
500
Ib/h



Ib/h
Ib/h
Equipment type No.
Clutch face molds 100
Treatment tunnel I
Rest of conversion
Total plant

Total plant 1
Total plant 1

Hew value,
$
250
500
1,500
80,000

35,000
Z.OOO

,000
,000
,000
,000

,000
,000

Reported Scrap
Resale value. Age, scrap weight,
$ years value, $ tons COMMITS
Equipment conversion costs with about 501
Total conversion will be sbout $2,250,000.
10,000,000 30 500,000 12,000,000-part/year capacity.
Existing plant.
20
304,000 15 750 1 year conversion. Slower production. 21
year capacity.
Capacity dropped to WI after conversion.
parts/year.

converted.



,600,000-part/
8,320,000
Saw blades switched to diamond. Operating costs
doubled. 335! slower and raw materials more expensive.
Currently 951 switched to asbestos substitutes.

800

Ib/h

Total plant

2,000

,000
Cannot find substitute. Hill shut down.
350,000 10 Assuming equipment liquidation,6 14.000.0

QQ-part/vear
                                                                                                  capacity.  To convert   11,000,000  to met. and $1,200,000
                                                                                                  to $1,500,000 for met.  and org.

                                                                                                  Ho equipment models  necessary  for  substitute material.c
                                                                                                  14,000,000-part/ye«r capacity  currently 75S or 30,000
                                                                                                  parts/day.

                                                                                                  4 years of developmental  research  time required to make
                                                                                                  the conversion..  Manufacturer  - $200,000 for 3 full-tine
                                                                                                  technicians workinf  4 years; castower - $500,000 for 4
                                                                                                  years of testing transmissions, etc.; and $300,000 for
                                                                                                  engineering control  costs.  Another $30,000 was
                                                                                                  required for cleanup costs; outside contractor vacuumed
                                                                                                  all equipment, storage  rooms,  ductwork, overhead beans,
                                                                                                  etc.  Sow equipment was  washed down with water—took
                                                                                                  1.5 weeks.  No change In  productivity with substitute,
                                                                                                  just higher material costs.
* Equipment  resale only.   Current building expenses are $55,000/year In insurance and taxes.  $100,000  to $600,000 to be spent on buttling before sell
  approval issued.  Row out of business.

  Reportedly a typical plant would  have two smaller units to total this capacity.  Metallic-based substitutes cost three times more  to produce.  Experimenting
  with material ?5 to 80 percent of metallic product.

c Three or four full-tine researchers required 5 years to develop substitute Material.  Cleanup of old  equipment would be $100,000.  Hill be 1001 asbestos-
  free by November 1986.

-------
      TABLE 3-1  (continued)
ro
o
Plant size,
ft*, or
capacity.
Plant Ib/h
A 30 Ib/h









B 30 Ib/h








C 130,000 ft*










0 100,000 ft*











Equipment type
Hfxer

Molding



lathes, etc.
Boiler
Fabric filter
Scrubber
Hixer



SHtter and cutter
Molding
Oven
Drill, grind

Mixer
Holding
SHtter and cutter
Oven
Samlets
Grinders
Punch presses
fabric filters
Treater towers
Solvent recovery
Minders
Mixer
Preform mold
Conip, mold
Slitter and cutter
Arc mole}
Oven
Finishing
Punch presses
Cent. byd. system
Boilers
Oust collectors
tab eijufpnwnt
No.
1
1
3


1000 -
100
I
11
1
3
I
8
1
5
2
1
9
t
13
56
8
25
8
12
10
7
2
I

3
8
35
1
K
14
25
3
1
2
$
7
flew value. Resale value,
$ t
37,000
37,000
60,000
250,000
730,000
500,000
50,000
100,000
210,000
30,000
* 30,000
214,000
360,000
165,000
20,000
15,000
60,000
85,000
40,000
100,000
75,000
135,000
20,000
17? .000

100.000
2,500,000
400,000
850,000
500,000
240,000
141,000
1,500,000
25,000
60,000
350,000
150,000
45,000
150,000
150,000
450,000
500,000
4,000
12,000
5,000
20,000
5,000
0
500
10,000
0
0
15,000
109,000
184,000
84,000
10,000
8,000
31 ,000
43,000
20,000
30,000
0
20,000
0
0

0
0
0
0
0
90,000
25,000
375,000
0
0
90,000
40,000
15,000
50,000
40,000
50,000
90 ,000
ftfe.
years
ZO
10
40
ZO
20
20
20
4
20
25
20
ZO
20
20
20
20
20
20
20
6
30
15
30
10
40
30
13
30


15
12
18
15
IS
15
15
ZO
20
15
15
IS
Reported Scrap
scrap weight.
value, $ tons Cowaents
50
50
50
200
200

100
0
0
0








Corrosion costs are $5.000 to $10,000 per new mold.
12
to 15 molds were changed over the last year, but a new
substitute being developed may not require mold conver-
60
0,5
1
1.5










slon. It takes 1 to 3 weeks to make their o»n mold.

Produces 25 to 30% asbestos products. Used 60 tons
asbestos to produce 120 tons of products in 1985.



Orw liner production dropped from 58 to 23 ft/ntin.
Production cost about $0.20 w/»sbestos and $0.60 to
$0.80 ^/substitute. Mill go out of business if 1001
asbestos required.

Host equipment weighs 1500 to 4000 Ib.



of











Small grinders are approximately $5,000 each and Urge












100
ISO
5,000
ZOO
100
200
250
100
150
300
500
750












6
S
250
1
6
ZO
25
6
15
30
50
75
grinders are approximately $15,000 each.
120 employees at present; has been as Nigh as 400.








.






































-------
can be used to produce both asbestos and nonasbestos brake products.  Several

different formulations are used for producing -asbestos-containing friction

materials.  An article in the Kirk Othmer Encyclopedia of Chemical Technology

reports 18 formulations of asbestos-containing organic friction materials.6

     Table 3-2 presents the equipment components found in a friction products

plant and the projected options for each type of equipment.  The same
equipment could be used in a plant producing nonasbestos friction products.

            TABLE 3-2.  FRICTION PRODUCTS EQUIPMENT OPTIONS
Process
Convert to
substitute
process
Resell to
nonasbestos
industries
Likely to
have resale
value
Sell
for
scrap
Send to
landfill
Raw material receiving
 and handling
  Mixers                     x^

Friction materials
 production
  Preform compression        x
   molding machines
  Heated compression         x
   modling machines
  Combination slitter        x
   and cutter
  Curing oven                x
  Finishing equipment        x
   (drills, grinders,
   etc.)

Support equipment
  Boiler                     x
  Air pollution con-         x
   trols {e.g., fabric
   filters)
  Dynamometers               x
             x

             x

             x
x
x
x

x

x

x
X
X


X


X


X
X
X
X
X
X
X
X
  Also nonfriction products industry.


REPLACEMENT .COST OF EXISTING EQUIPMENT

     The number of production lines and the size and kind of auxiliary

services required at a friction materials production facility will depend on

the types of friction products produced and the quantity sold.  Auxiliary
                                      21

-------
services include boilers, buildings, raw material storage, warehouses,  and
shipping facilities.  Although production lines can often be shifted from ont
type of friction material to another, these lines are usually dedicated to a
single composition.  The cost estimate development is based on a 100,000-
square-foot building with sufficient equipment available for annual  production
                                                                 it
of approximately IS million pieces of asbestos friction products.
     Tables 3-3 and 3-4 show the estimated cost breakdown for installing a
friction products facility of the size and capacity just described and  for
replacing only that equipment exposed to asbestos or an asbestos mixture.
The infrastructure (i.e., the underlying base, building, and basic support
systems such as the boiler) would already exist, but wiring, piping, and some
service facilities (such as conveyors and storage and shipping facilities)
would have to be added.  Calculations of the cost components were based on
factors from Peters and Timmerhaus.3
     Tables 3-3 and 3-4 also present the estimated costs of a new greenfield
facility ($40 million) and of the installation of friction product manufactur-
ing equipment in a building previously used for another process or one  that
requires a different equipment configuration.  In the latter case, if the
existing equipment is merely removed and replaced with similar equipment and
the existing electrical, piping, etc., are used, the cost of the new equip-
ment and its installation would only be $4.2 million (the first two line
items in Table 3-4).  This estimated cost does not include removal of existing
equipment.

ASBESTOS SUBSTITUTION.OPTIONS
     Two alternatives are considered for asbestos friction product plants:
1) conversion of existing equipment for use with nonasbestos materials, and
2) scrapping or reselling the existing equipment and purchasing new equip-
ment.  Converting the equipment or plant to produce something other than
*
  Personal communications from Mr. Leroy McDonald, Mead Corporation, South
  Lee, MA, October 7, 1986; Ms. Jan Morris, Raymark Corporation,
  Crawfordsville, IN, September 23, 1986; Mr. Steven Simon, Brassbestos Mfg.
  Corporation, Peterson, NJ, September 23, 1986; Mr. George Houser, Raymark
  Corporation, Manheim, PA, October 14, 1986.
  "Greenfield facilities" are entirely new facilities constructed in areas
  where no previous building has been constructed.

                                      22

-------
TABLE 3-3.  ESTIMATED COST OF FRICTION PRODUCTS PLANT INSTALLATION
                      (December 1985 dollars)
               Component
 Percent of
total capital
 investment
  Cost of
equipment,
  $1000
Direct costs
  Purchased equipment                           20           8,000
  Purchased equipment installation              10           4,000
  Instrumentation and controls (installed)       4           1,600
  Piping (installed)                             6           2,400
  Electrical (installed)                         2       -      800
  Buildings (including services)                 6           2,400
  Yard improvements                              2             800
  Service facilities (installed)                10           4,000
  Land                                          J.             400

          Total  direct costs                    61          24,400
Indirect costs
Engineering and supervision
Construction expense
Contractor's fee
Contingency
Total indirect costs
Total fixed-capital investment
Working Capital
TOTAL CAPITAL INVESTMENT

7
7
5
J5
24
85
15
100

2,800
2,800
2,000
2,000
9,600
34,000
6,000
40,000
                                 23

-------
TABLE 3-4.  ESTIMATED COST OF FRICTION PRODUCTS
     MANUFACTURING EQUIPMENT INSTALLATION
            (December 1985 dollars)


Component
Direct costs
Purchased equipment
Purchased equipment installation
Instrumentation and controls (installed)
Piping (installed)
Electrical (installed)
Buildings (including services)
Yard improvements
Service facilities (installed)
Land
Total direct costs
Indirect costs
Engineering and supervision
Construction expense
Contractor's fee
Contingency
Total indirect costs
Total fixed-capital investment.
Working Capital
TOTAL CAPITAL INVESTMENT
Percent of
total capital
investment

25
10
5
10
5
0
0
5
_0
60

10
10
5
5
30
90
10
100
Cost of
equipment,
$1000

3,000
1,200
600
1,200
600
0
0
600
	 0
7,200

1,200
1,200
600
600
3,600
10,800
1,200
12,000
                       24

-------
 friction  products was not considered because  the equipment and support sys-
 tems  can  be  used to produce  nonasbestos friction products, for which there
 will  be a  continued demand regardless of the  formulations used in the indus-
 try.

 CONVERSION COSTS  .
      Converting existing equipment for use with nonasbestos materials would
 involve cleaning the existing equipment and the plant and changing the molds.
 The costs  presented herein do not include the R&D costs to find a substitute
 material  or  the cost of the  reported decrease in the plant's productivity
 when  asbestos substitutes are used.  The friction products plints contacted
 were  developing their own substitute compositions, which would not be avail-
 able  to other producers.  Finding a substitute material can reportedly in-
 volve as much as 4 or 5 years and the efforts of three or four full-time
 laboratory technicians or researchers.   The  total cost for the time alone is
 estimated  to be $200,000.  This does not include the costs of testing new
 materials  with the appropriate products.  Engineering costs can be another
 $300,000  (e.g., equipment modifications and additional pollution controls).
     Adding another 50 percent to the technician costs to cover supervision,
 other part-time researchers, and miscellaneous supplies would result in an
 estimated  research cost of $300,000 to identify substitutes.  Total costs for
 research and engineering are estimated to be $600,000.
     Reported values for the resulting reduction in process operating rate
when asbestos substitutes are used varied widely.  One plant reported no
 reduction  in production rate,  whereas others reported reductions of up to 40
        **
 percent.    Greater wear on  the process equipment was also reported to result
 with asbestos substitutes.  These higher material costs and reductions in
 production rate doubled operating costs.ft
 *
   Personal communications from Mr. Leroy McDonald, Mead Corporation, South
   Lee, MA, October 7, 1986; Mr. Robert Tami, Motion Control Industries,
   Ridgeway, PA, October 23, 1986.
   Personal communication from Mr, George Houser, Raymark Corporation,
   Crawfordsville, IN, October 14, 1986.
**
   Personal communications from Mr. Delvin Foster, LSI-Certified Brakes,
   Danville, KY, September 23, 1986; Mr. Greg Beckett, Wheeling Brake Block
   Manufacturing, Bridgeport, CT, September 23, 1986.
   Personal communication from Mr, Greg Beckett (above).
                                      25

-------
     Most producers of friction products currently appear to have converted
at least part of their facilities to the use of nonasbestos materials and are •
looking for substitutes for most of their other products.  The cost of con-
verting the equipment for the typical facility described earlier is estimated
to be $1,095,000.  This includes $750,000 for equipment cleanup (25 percent
of the cost of replacement equipment as presented in Table 4), $120,000 for
general plant cleanup, and an estimated $225,000 for mold changes (assuming
50 molds per plant, 30 of which will need to be converted at a cost of $7500
per mold).   Again, the estimated $600,00 cost of the necessary research and
engineering is not included.  The equipment and plant cleanup may be less
than estimated, depending on the regulatory requirements governing these
activities.  The estimates for equipment are based on taking the equipment
apart, cleaning each piece, and then reassembling the equipment for use.*
Plant cleanup costs are based on the reported cleanup costs of $30,000 (iso-
lating the area and other stringent controls for asbestos dust were not re-
       **
quired)   for a 100,000-square-foot facility.  Based on PEI's asbestos cleanup
experience, the cost of vacuuming and washing down walls is only about 25
percent of the total cost of a strictly-controlled cleanup.  Other costs in-
clude preparing and isolating the cleanup area, handling and transfer of the
collected asbestos dust, landfill ing the wastes in an approved hazardous
waste landfill facility, and demobilization.  Including these costs would
increase the plant cleanup costs to $120,000.

EQUIPMENT RESALE VALUE
     The cost for reselling existing equipment and purchasing new all
equipment that is directly involved with producing friction products (not
including plant mobile equipment or other ancillary equipment) is estimated
to be $4,320,000.  This includes the purchase and installation of new
equipment after cleanup ($750,000), resale ($750,000 or 25 percent of the
purchased equipment cost),ft and cleanup of the plant ($120,000).  This
 *
   Personal communication from Mr. Bill Outcalt, Aztec Industries,  North
   Brookfield, MA, September 8, 1986.
   Personal communication from Mr. Jim Smith, Blackmao-Mooring Steamatic
   Castrophe, Inc., Fort Worth, TX.
**
   Personal communication from Mr. George Houser, Raymark Corporation,
   Crawfordsville, IN, October 14, 1986.
   Personal communication from Mr. Jim Mercer, J. Little Mercer Company,
   Inc., Rehoboth, MA, September 29, 1986.
                                    26

-------
estimate assumes that the new equipment goes in the same plant area as the
removed equipment and that minimal wiring, piping, and other support
equipment is required.

GENERAL COMMENTS
     Some plants may be unable to find substitutes for asbestos, particularly
those with no (or minimal) R&D capability.  These plants will be required to
shut down or to sell the plant to another friction product manufacturer.
     The remaining useful life of equipment used for friction product
manufacturing will vary.  The average age of most of the existing equipment
belonging to the manufacturers that were contacted was about 20 years, but
equipment ages of as high as 40 years have been reported.
     The loss in production efficiency due to the use of substitutes is
primarily a result of the nature and use of the asbestos substitutes.
Reasons for this reduction include longer mixing times, handling difficulties
and additional maintenance due to the higher abrasiveness of the
formulations, and longer finishing times.  Based on reported losses in
production efficiencies from 0 to 40 percent, an average loss of 20 percent
is estimated.
                                      27

-------

-------
                                  SECTION 4
                 CONVERSION COSTS—PAPER AND FELTS INDUSTRY

     Asbestos-containing papers and felts are used in a variety of industrial
and consumer products.  Asbestos paper is used in gaskets, filters, insulation
papers, and similar products.  Asbestos felt is used as backing material  in
various applications.  Switching to asbestos-substitute materials in the
papers and felts industry depends on finding suitable substitutes for the
asbestos content in these products.

PRODUCTION EQUIPMENT
     The production equipment at a papers and felts facility consists primarily
of several mixing and holding chests, a Jordan, steam-filled dryers, and
winding and calender rolls.  Each facility also needs a boiler to supply  the
steam for the dryers.  The exact equipment at each facility varies with the
products manufactured there.

ASBESTOS SUBSTITUTION OPTIONS
     The conversion to asbestos substitutes in the papers and felts industry
depends primarily on the industry's ability to find substitutes suitable  for
the users of the materials now produced with asbestos products.  No major
problems have been reported in converting the papers and felts equipment  to
asbestos-substitute materials.  Most of it can be readily converted to asbes-
tos-substitute products.  One industry contact indicated, however, that the
equipment would have to be cleaned thoroughly before it is converted for  use
with asbestos-substitute materials.
     The one paper facility (Qui.n-T Corporation, Erie, Pennsylvania) that
responded to PEI's request for information indicated it has two paper-making
machines and produces 16 million pounds of paper annually.  Sixty-five
percent of this output contains asbestos; the remaining portion does not.

       •   •.  .   •                       28

-------
CONVERSION COSTS
     In general, the costs of converting and cleaning this equipment are
expected to be minimal.  The responding facility (Quin-T Corporation, Erie,
Pennsylvania) reported a minor modification expense of $7000 and equipment
cleaning costs of $10,000 to $15,000.  The facility further reported that the
conversion would take 1 to 1.5 months to complete.
     Table 4-1 shows the capital cost breakdown at a facility with a capacity
of 8000 tons of paper per year.  The costs are derived from the equipment
cost data provided by the Quin-T Corporation and on recommended capital  cost
percentages.3
             TABLE 4-1.  ESTIMATED COST OF A NEW PAPER FACILITY
                       WITH A CAPACITY OF 8000 TONS/YR


Component
Direct costs
Purchased equipment
Equipment installation
Instrumentation and controls (installed)
Piping (installed)
Electrical (installed)
Buildings (including services)
Yard improvements
Service facilities (installed)
Land
Total direct costs
Indirect costs
Engineering and supervision
Construction expense
Contractor's fee
Contingency
Total indirect costs
Total Fixed-Capital Investment
Working Capital
TOTAL CAPITAL INVESTMENT
Percent of
total capital
investment

18.3
11.0
3.1
1.5
4,2
4.4
1.1
11.0
0.7
55.3

9.5
10.6
3.7
11.0
. 34.7
90.0
10.0
100.0
Cost of
equipment.
$1000

1,500
900
258
120
348
360
90
900
60
4,536

780
870
300
900
2,850
7,386
823
8,209
                                      29

-------
EQUIPMENT RESALE VALUE
     Although the equipment used in the papers and felts industry is similar
to that used in industries that produce roofing felts and felt-backed vinyl
sheet flooring, no active market is currently available for this equipment.
                                      30

-------

-------
                                  SECTION 5
                  CONVERSION STATUS—ROOFING FELTS INDUSTRY

     The U.S. roofing felt industry manufactures saturated and urssaturated
roofing felts.  No information was available from this industry regarding the
current status of asbestos use in the manufacture of roofing felts.
     Most manufacturers of saturated roofing felt have discontinued the use
of asbestos and now produce either organic or fiberglass felts.  Only one
company (Nicolet in Pennsylvania) is suspected of still manufacturing
unsaturated roofing felt.7  This company has confirmed that it sells
unsaturated felt, but it will not reveal whether it produces the unsaturated
felt at company-owned plants or purchases it from another firm.

-------

-------
                                  SECTION 6
            CONVERSION STATUS—VINYL-ASBESTOS FLOOR TILE INDUSTRY

     Two floor tile facilities responded to PEI's request for information
relating to equipment conversion to asbestos-substitute materials.  The
facilities indicated that a complete conversion to asbestos-substitute
materials has been completed and that none of the operations at these
facilities now use asbestos as a raw material.
     It is reported that all of the floor tile facilities in the United
States now manufacture products containing no asbestos.7
*
  Personal communications from American Beltrite, Inc., Lawrenceville, NJ
  (October 9, 1986) and Armstrong World Industries, Inc., Lancaster, PA
  (September 30» 1986).
                                      32

-------

-------
                                  SECTION 7
    CONVERSION STATUS—ASBESTOS FELT-BACKED VINYL SHEET FLOORING INDUSTRY

     No data are available regarding the production of asbestos felt-backed
vinyl sheet flooring in the United States.  Most manufacturers of felt-backed
vinyl sheet flooring have discontinued the use of asbestos and now manufacture
products containing asbestos-substitute materials.7
                                      33

-------

-------
                                  SECTION 8
        CONVERSION COSTS—ASBESTOS-CEMENT SHEET AND SHINGLE INDUSTRY

     Asbestos-cement (A-C) sheets are used primarily in the construction
industry—as wall lining in factories and agricultural buildings, as fire-
resistant walls and curtain walls, and for other similar applications.
Asbestos-cement shingles are used for siding and roofing on both residential
and commercial buildings.  Asbestos is used as a reinforcing material because
of its high tensile strength, flexibility, thermal resistance, and corrosion
resistance.  Conversion to nonasbestos products in the A-C sheet and shingle
industry depends on finding acceptable substitute materials and product
formulations.

PRODUCTION EQUIPHENT
     Formulations for A-C sheeting vary with the manufacturing process;
however, the basic production process and composition are similar for all
such products.  The equipment at a sheeting facility consists primarily of
various mixers and sheeter mills.  In addition to the same equipment found at
a sheet facility, a shingle facility also has a punch press and baking and
finishing equipment, such as autoclaves, brushers, waxers, and paint
machines.

ASBESTOS SUBSTITUTION OPTIONS
                       *                         +
     One sheet facility  and one shingle facility  responded to PEI's request
for information.  Both facilities indicated that specially designed equipment
for asbestos substitute materials has not been developed.  The sheeting
*
  Personal communication from the Victor Products Division of Dana
  Personal communication from Supradur Manufacturing Corporation, Rye, NY,
Corporation, Robinson, IL, September 29, 1986,
Personal communici
October 10, 1986,

                                    34

-------
facility further indicated that extensive research has not yet demonstrated
that the products containing asbestos substitutes can be manufactured with
the existing equipment.
     The shingle facility does not have specific supporting information, but
feels that asbestos substitute products will run much slower with the
existing equipment.  Based on the conversion impact data for other
industries, a reduction in production efficiency of at least 20 percent is
estimated.
     The responding sheeting facility indicated that body mixers would have
to be replaced and sheeter mills would require modification.  This facility
has four body mixers, nine sheeter mills, and an annual production rate of
3,000,000 square yards of sheeting.  This facility further indicated that the
equipment would have to be cleaned thoroughly before a switch is made to
                              *
asbestos-substitute materials.
     Both facilities estimated that conversion would take about 2 years.  The
indicated duration is a rough estimate; the actual duration will depend upon
the extent and nature of equipment modifications.  The conversion duration is
needed to allow time for developing product formulations, test runs, equip-
ment modifications, and startup and commissioning with substitute materials.
The actual downtime for conversion will be significantly lower than the
conversion duration because the facilities will continue to manufacture
asbestos-containing products until the conversion is completed*

CONVERSION COSTS
     The facilities contacted by PEI indicated that conversion to
asbestos-substitute materials would require significant expenditures.
Replacement of body mixers and modifications of the sheeter mills are the two
major cost-intensive items reported by the sheeting facility.  The cost of
replacing the existing four body mixers is estimated to be $720,000, and the
cost of modifying the nine sheeter mills is estimated to be $180,000.  An
additional $50,000 expenditure was estimated for tearing down and cleaning
the equipment.  The total  estimated conversion cost for a sheeting facility
with a capacity of 3,000,000 square yards per year is about $1,000,000.
*
  Personal communication from the Victor Products Division of Dana
  Corporation, Robinson, IL, September 29, 1986.
                                      35

-------
      Table 8-1  shows  a  cost breakdown for an A-C sheet facility with a
 capacity  of  3,000,000 square yards/year.  PEI developed this breakdown from
 purchased equipment cost data provided by a responding facility (Victor
 Products  Division  of  Dana Corporation) and the use of current recommended
 percentages  for cost  components.3
      Table 8-2  shows  the estimated cost breakdown for installing an
 additional 3,000,000  square yards of sheeting per year at an existing plant.
 The  cost  assumes that the infrastructure (i.e., the underlying base,
 building, and basic support systems) is already in position.  The purchased
 equipment cost  is  assumed to be 70 percent of the amount needed to set up a
 greenfield installation.
      The  shingle facility (Supradur Manufacturing Corporation of Rye, New
 York) indicated that  extensive research has not yet demonstrated that the
 existing  equipment can  be used to make products containing asbestos
 substitutes.  According to this facility, the most likely option for
 switching to asbestos-substitute products would be to construct an entirely
 new  facility at a  cost  of about $8 to $10 million.  This facility currently
 makes 21,500 tons  of  siding and roofing products per year.

 EQUIPMENT RESALE VALUE
      No resale  market exists for the equipment used to make A-C sheets and
 shingles  because of the limited number of facilities in the industry.  The
 equiment  can be sold  as scrap, and such, is assumed to have zero net value;
 i.e., the credits  generated from the sale of the scrap are assumed to equal
 the  cost of equipment removal and transportation and the reconditioning of
 the  area  from which it was- removed.
     Waste disposal costs for an A-C sheet and shingle facilty are assumed to
 be similar to those for the A-C pipe industry and are calculated as a
 percentage of the  capital cost of a new plant.  The equipment disposal costs
 for  the A-C pipe industry ranged from 1.4 to 2.8 percent of the capital cost.
 Based on  this range,  the disposal cost of $400,000 is estimated for equipment
with a capacity of 3,000,000 square yards per year.  The costs are based on
 disposing the plant equipment in a hazardous waste landfill.  A significant
 part of the cost is for removing heavy equipment from the plant and hauling
 it to the landfill.

                                      36

-------
TABLE 8-1.  ESTIMATED COST OF AN A-C SHEET FACILITY
   WITH A CAPACITY OF 3,000,000 SQUARE YARDS/YR


Component
Direct costs
Purchased equipment
Equipment installation
Instrumentation and controls (installed)
Piping (installed)
Electrical (installed)
Buildings (including services)
Yard improvements
Service facilities (installed)
Land
Total direct costs
Indirect costs
Engineering and supervision
Construction expense
Contractor's fee
Contingency
Total indirect costs
Total Fixed-Capital Investment
Working Capital
TOTAL CAPITAL INVESTHENT
Percent of
total capital
investment

18.3
11.0
3.1
1.5
4.2
4.4
1.1
11.0
0.7
55.3

9.5
10.6
3.7
11.0
34.7
90.0
10.0
100.0
Cost of
equipment,
$1000

3,000
1,800
516
240
696
720
180
1,800
120
9,072

1,560
1,740
600
1,800
5,700
14,772
1,650
16,422
                         37

-------
TABLE 8-2.  ESTIMATED COST OF A-C SHEET AND SHINGLE PRODUCTS
                   EQUIPMENT INSTALLATION


Component
Direct costs
Purchased equipment
Equipment installation
Instrumentation and controls (installed)
Piping (installed)
Electrical (installed)
Buildings (including services)
Yard improvements
Service facilities (installed)
Land
Total direct costs
Indirect costs
Engineering and supervision
Construction expense
Contractor's fee
Contingency
Total indirect costs
Total Fixed-Capital Investment
Working Capital
TOTAL CAPITAL INVESTMENT
Percent of
total capital
investment

26.7
17.8
3.8
0.8
5.1
0.0
0.0
6.4
0.0
60.6

10.8
12.0
4.2
12.5
39.4
100.0
0.0
100.0
Cost of
equipment.
$1000

2,100
1,400
300
60
400
0
0
500
0
4,760

845
943
329
979
3,096
7,856
0
7,856
                              38

-------
                                  SECTION 9
               CONVERSION COSTS—TEXTILES AND PACKING INDUSTRY

     The textiles and packing industry produces asbestos-containing products
for other industries to use as supplementary material in their products.  A
typical textiles and packing facility makes products in various forms such as
lap, roving, wick, thread, yarn, rope, cord, packing, and cloth.  The equip-
ment at a particular facility depends on the products made there.  The switch
to asbestos-substitute materials in the textiles and packing industry depends
on the ability to find suitable substitutes for these methods.

PRODUCTION EQUIPMENT
     Although the production equipment at a textiles and packing facility
depends on the products made at the plant, the front-end equipment, which
performs the preliminary processing, is common to all the facilities.  The
preliminary processing generally includes operations such as fiber blending,
packing and lap formation, carding, and drawing.  The preliminary processing
produces roving that can be, further processed to produce wick by twisting the
yarn or thread by spinning it.  The yarn can be further processed to produce
rope, cord, or packing.  Rope and cord are made from yarn by additional
twisting, whereas packing involves steps such as braiding, extrusion,
molding, or laminating.  Individual processing functions at the facility
generally take place in separate equipment modules.  A textiles and packing
facility also requires a boiler to provide steam for various process opera-
tions.

ASBESTOS SUBSTITUTION OPTIONS
     The conversion to asbestos substitutes in the textiles and packing
industry depends primarily on the ability of ancillary industries to find
substitutes for the materials currently being produced with asbestos-containing

                                      39

-------
products from the textiles and packing industry.  No major problems have been
reported with regard to converting the textiles and packing equipment to use
asbestos-substitute materials.  Most of the equipment can be readily converted
without the need for significant equipment cleaning.
     Two textiles and packing facilities provided PEI with conversion-related
data.  One facility, which produces yarn for friction products, indicated
that the carding'equipment would have to be replaced if the plant were to
convert to asbestos substitute materials.  This facility has 18 cards with an
annual yarn production rate of 3000 tons.  Conversion is estimated to take 4
to 6 weeks per card and to entail an expenditure of $15,000 to $20,000 per
card.  The facility did not refer to any other conversion problems.
     A facility producing 250 tons of packing material reported that it
recently converted its entire product line to asbestos-substitute materials.
The facility is now using the same equipment without any additions or
modifications, and no expenses were incurred in the conversion.

CONVERSION COSTS
     In general, no costs are associated with the conversion of a textiles
and packing facility to nonasbestos-substitute materials.  At some
facilities, the compatibility of plant equipment with the available
substitute materials may need to be studied.  Although PEI is not aware of
the reasons one facility needed to replace its carding equipment, this
facility is believed to be an exception.  The facility estimated the cost of
replacing the carding equipment to be around $90 to $120 per ton-year of
product.  The replacement involved a total of 18 cards producing 3000
tons/year of yarn for friction products.
     Equipment for producing asbestos-based products can be readily switched
to asbestos-substitute materials without significant modifications.  Although
equipment cleaning is generally recommended, the cleaning costs are expected
to be insignificant.  If carding equipment must be replaced, the cost of such
replacement at a 1000-ton/year facility is estimated to be between $90,000
and $120,000.
*
  Personal communication from Raymark Industrial Division, Harshville, NC,
  October 23, 1986.
  Personal communication from Garlock, Inc., Compression Packing Division of
  Colt Industries, Sodus, NY, September 24, 1986.

                                      40

-------
     The capital cost breakdown of a textiles and packing facility with a
capacity of 1000 tons/year is shown in Table 9-1.  The costs are .derived from
equipment cost data provided by the textiles and packing facilities contacted
by PEI and recommended capital cost percentages.3  The equipment cost for
this size facility was extrapolated from the equipment cost at a facility
with a capacity of 250 tons/year and an equipment scale factor of 0*6 (i.e.,
the plant size ratio to the 0.6 power).  The equipment cost data for the
250-ton/yr facility and the 3000-ton/yr facility gave a scale factor of 0.89.
This factor was not used because it does not fall within the generally
accepted scale factor range of 0.5 to 0.75.

EQUIPMENT RESALE VALUE
     The textiles and packing industry equipment generally has no resale
value; however, its scrap value is around $80/ton.  The total weight of the
equipment at a 1000-ton/year facility was calculated from the data for a
3000-ton/year capacity plant by using a 0.6 scale factor and roughly amounts
to 60 tons.  The scrap value of this equipment is estimated to be $4800.
                                      41

-------
       TABLE 9-1.  ESTIMATED COST OF A TEXTILES  AND  PACKINS
             FACILITY WITH A CAPACITY OF 1000 TONS/YR
               Component
 Percent of
fixed capital
 investment
  Cost of
equipment,
  $1000
Direct costs
  Purchased equipment
  Equipment installation
  Instrumentation and controls (installed)
  Piping (installed)
  Electrical (installed)
  Buildings (including services)
  Yard improvements
  Service facilities (installed)
  Land

          total  direct costs
    55.3
   3,230
Indirect costs
Engineering and supervision
Construction expense
Contractor's fee
Contingency
Total indirect costs
Total Fixed-Capital Investment
Working Capital
TOTAL CAPITAL INVESTMENT

9.5 '
10.6
3.7
11.0
34.7
90.0
10.0
100.0

555
619
214
641
2,029
5,259
586
5,845
                                 42

-------

-------
                                 SECTION 10
             CONVERSION COSTS—ASBESTOS SHEET GASKETING INDUSTRY

     Asbestos is used as gasketing material because it is heat- and pressure-
resistant,  resiliant, strong, and relatively chemically inert.  Gasket
sheeting is produced by mixing the raw materials thoroughly and then com-
pressing the mixture into sheets.  The primary producers supply these com-
pressed sheets to secondary producers/fabricators, who cut the sheets into
gaskets according to customer specifications.  Conversion to nonasbestos
products in the gasketing industry depends on finding acceptable substitute
materials and product formulations.

PRODUCTION EQUIPMENT
     The equipment at a compressed sheet facility consists primarily of a
material feed system, mixers, a drop mill, a sheeter/calender, and
autoclaves.  Raw materials, which typically include rubber, asbestos, and
solvents, are fed through the feed system to the mixer for blending.  The
blended material is further processed in the drop mill before it is
transferred to the sheeter machine.  The sheets formed in the sheeter machine
are then cured in an autoclave.  Some facilities that produce gasket sheeting
also have solvent recovery equipment to recover solvents that are liberated
in the autoclaves.

ASBESTOS SUBSTITUTION OPTIONS*
     The one sheet gasketing facility that responded to PEI's request for
information indicated that finding the right substitute materials and
formulations is the key to successful conversion and that no data regarding
*
  Personal communication from Special Paperfaoard Division of Boise Cascade,
  Beaver Falls, NY, October 3, 1986.

                                      43

-------
such substitute materials and product formulations are currently available.
Extensive laboratory experimentation with substitute materials and
formulations is required.
     This facility also indicated that the expenditure for equipment
modification would be significant; however, no specific data are currently
available regarding the kinds of modification required for conversion to
asbestos-substitute materials. .Although the facility that responded to PEI's
request has not conducted an investigation to generate such data, the
spokesman indicated that the lack of successful development of substitute
materials for many product areas precludes arriving at a good definition of
equipment requirements.  The facility further indicated that converting their
equipment to asbestos-substitute materials would take about 3 years,
     Because the facility has not collected specific conversion data, the
indicated duration is a rough estimate.  The conversion duration is needed
for developing product formulations, test runs, equipment modifications, and
startup and commissioning with the substitute materials.  The actual downtime
for conversion will be significantly less than the conversion duration.  The
facility will continue to manufacture asbestos-containing products until the
conversion is completed.

CONVERSION COSTS
     The facility that PE! contacted estimated a conversion cost of about
$7.2 million; however, this'estimate was made without itemizing any of the
equipment modifications.  An additional $200,000 expenditure was estimated
for tearing down and cleaning the equipment.
     Table 10-1 shows a cost breakdown for building a new sheet gasketing
facility with a capacity of 28 tons/day.  The cost breakdown was developed
                                                                          *
from the purchased equipment cost data received from the contacted facility
and recommended percentages for cost components.3
*
  Personal communication from Special Paperboard Division of Boise Cascade.
  Beaver Falls, NY, October 3, 1986.
                                      44

-------
        TABLE 10-1.  ESTIMATED COST OF A NEW SHEET GASKETING FACILITY
                       WITH A CAPACITY OF 28 TONS/DAY


Component
Direct costs
Purchased equipment
Equipment installation
Instrumentation and controls {installed}
Piping (installed)
Electrical (installed)
Buildings (including services)
Yard improvements
Service facilities (installed)
Land
Total direct costs
*
Indirect costs
Engineering and supervision
Construction expense
Contractor's fee
Contingency
Total indirect costs
Total Fixed-Capital Investment
Working Capital
TOTAL CAPITAL INVESTMENT
Percent of
total capital
investment

18.3
11.0
3.1
1.5
4,2
4.4
1.1
11.0
0.7
55.3

9.5
10.6
3.7
11.0
34.7
90.0
10.0
100.0
Cost of
equipment,
$1000

12,000
7,200
2,064
960
2,784
2,880
720
7,200
480
36,288

6,240
6,960
2,400
7,200
22,800
59,088
6,600
65,688
EQUIPMENT RESALE VALUE

     The resale market for equipment used to produce sheet gasketing is

limited; the resale value of the equipment at this 28-ton/day facility is
estimated to be $50,000.
                                      45

-------

-------
                                 SECTION 11
              CONVERSION COSTS—COATINGS AND SEALANTS INDUSTRY

     Use of asbestos in the coatings and sealants industry has declined
considerably in the past 5 years.  Telephone conversations with the several
producers of coatings and sealants in the United States indicate that roost of
them have switched to asbestos substitutes or are planning a switch in the
near future.
     PEI contacted various producers of coatings and sealants to obtain
information on problems created by switching to asbestos substitutes and
conversion-related costs.  In general, no serious difficulties have occurred
or are expected.

PRODUCTION EQUIPMENT
     Coatings and sealants are batch-produced in kettles or tanks ranging in
size from 50 to 6000 gallons.  The batch time can vary from 4 to 10 hours
depending on the product type.  Common process industry equipment is used in
the coatings and sealants industry and typically consists of the following:
fluffers, conveyors, mixing tanks or kettles, and dispensers or blenders.

ASBESTOS-SUBSTITUTE OPTIONS
     Our survey of the coatings and sealants industry indicated that no major
equipment additions or modifications are needed to convert the plant equip-
ment to asbestos-substitute products; however, finding the right substitute
materials and formulations is a key to a successful conversion.  Various
coating and sealant products are produced by several manufacturers, and the
product formulations are producer-specific and considered trade secrets.
Thus, the manufacturers must develop their own formulations for the new mate-
rials.   To effect a successful conversion requires extensive laboratory ex-
perimentation with asbestos-substitute materials and formulations.   Once the

                                      46

-------
right product formulations have been found, the switch to asbestos-substitute
materials can be completed without incurring major expenditures.  Thorough
cleaning of the equipment is generally recommended before the switch is made
to substitute materials; however, the cleaning costs are not reported to be
significant.
     A switch to asbestos substitutes generally requires the use of more than
one substitute material because the properties offered by asbestos cannot be
obtained from a single substitute material.  The number and types of substitute
materials required depend on the end products being manufactured.  In gener-
al, the switch to asbestos substitutes adversely affects the production effi-
ciency.  Some substitutes require longer blending and mixing times.  This,
plus the need to handle more than one substitute material, results in lower
production efficiency.  Some facilities report that the production rate may
be reduced by as much as 20 percent when substitute materials are used.   The
facilities contacted by PEI did not report production equipment as having any
effect on production efficiency.
     The use of asbestos substitutes in the coatings and sealants industry
can be accomplished without major problems.  The majority of the producers
have already voluntarily switched or are planning to switch to asbestos-
substitute materials in the near future.

CONVERSION COSTS
     The equipment used in the coatings and sealants industry Is very simple
and can generally be purchased off the shelf.  Table 1 presents a cost
breakdown for a coatings and sealants facility with a production capacity of
700.gallons/batch.  This cost breakdown is based'on purchased equipment cost
data provided by one of the facilities PEI contacted  and on recommended
percentages for cost components.3  In general, the same equipment used to
produce products containing asbestos can be used for products made with
asbestos-substitute materials.  Minor equipment variations may be necessary
*
  Personal communication from Mr. Allan Morris, Coopers Creek Chemical
  Corporation, West Conshohockten, PA, September 22, 1986.
  Personal communication from Mr. Donald Davis, American Tar Company,
  Seattle, WA, September 18, 1986.
                                      47

-------
in the material-hand!ing area depending on the type and number of substitute
materials required; however, these differences are not expected to affect the
costs appreciably,
     The 700-gallon batch capacity facility in Table 11-1 can typically
produce 525,000 gallons of products per year.  This output is based on a
batch time of 8 hours and an operating schedule of 24 hours/day, 5 days/week,
and 50 weeks/year.  Batch time, which depends on product type, can vary from
4 to 10 hours.
     Although no significant modifications to equipment is required, thorough
cleaning is generally recommended before a switch is made to nonasbestos
products.  The costs of such cleaning are minimal (generally under $2000) and
                              *
consist mainly of labor costs.
     Most of the conversion costs incurred as a result of switching to
nonasbestos materials result from expenditure required for developing product
formulations and finding suitable substitute materials.  The laboratory
costs, which depend on the product type, may run as high as $20,000 for
complex formulations.   Finding the right formulations and substitute
materials can take a year or longer.

EQUIPMENT RESALE VALUE
     The resale market for most of the equipment used in the coatings and
sealants industry is good because the mixers, conveyors, and other equipment
used in this industry are also used in a wide variety of other industrial
          **
processes.    The facilities that PEI contacted indicate that resale value
can range between 7 to 10 percent of new equipment costs, depending on the
equipment age, condition, and general market conditions.

GENERAL COMMENTS
     The majority of the producers of coatings and sealants have already
voluntarily switched to asbestos substitutes or are planning such a switch in
the near future.  The switch to nonasbestos materials does not present this
 *
   Personal communication from Mr. Donald Davis, American Tar Company,
   Seattle, VIA, September 18, 1986.
   Personal communication from Mr. Bob Baker, Adhesive Engineering Company,
   San Carlos, CA, September 18, 1986.
**
   Personal communication from Mr. Bob Bair, National Varnish Company,
   Detroit, MI, September 23, 1986.
                                      48

-------
TABLE 11-1.  ESTIMATED COST OF A NEW COATINGS AND SEALANTS FACILITY
      WITH A CAPACITY OF 700 GALLONS/BATCH (2100 GALLONS/DAY)


Component
Direct Costs
Purchased equipment
Equipment installation
Instrumentation and controls (installed)
Piping (installed)
Electrical (installed)
Buildings (including services)
Yard improvements
Service facilities (installed)
Land
Total direct costs
Indirect costs
Engineering and supervision
Construction expense
Contractor's fee
Contingency
Total indirect costs
Total Fixed-Capital Investment
Working Capital
TOTAL CAPITAL INVESTMENT
Percent of
tota-1 capital
investment

18.3
11.0
3.1
1.5
4.2
4.4
1.1
11.0
0.7
55.3

9.5
10.6
3.7
11.0
34.7
90.0
10.0
100.0
Cost of
equipment,
$1000

30,000
18,000
5,160
2,400
6,960
7,200
1,800
18,000
1.200
90,720

15,600
17,400
6,000
18,000
57,000
147,720
16,500
164,220
                                 49

-------
industry with any major problems.  Depending on the product type, the produc-
tion rate could be reduced by as much as 20 percent when substitute materials
are used.
     The conversion costs consist mainly of the laboratory research
expenditures for finding new formulations that use substitute materials.
     The resale market for the equipment used in this industry is generally
good.
                                      50

-------

-------
                                 SECTION 12
      EQUIPMENT CONVERSION COSTS—ASBESTOS-REINFORCED PLASTICS INDUSTRY

     Asbestos is