Revisions to the Economic Impacts and Burden Estimates for the Rule Titled: Review of
New Sources and Modifications in Indian Country
This addendum summarizes the revised qualitative assessment of the economic and burden
impacts of the rule titled: Review of New Sources and Modifications in Indian Country. Burden
and costs estimates have changed from those estimated under the previous versions of the
Economic Impact Analysis (EIA) and the Supporting Statement (SS) for this rule due to a change
in policy before the rule was finalized.
At the time the original EIA and SS were written, we planned to delay the applicability date of
the rule for true minor sources that might be subject to the minor NSR program for a period of 18
months from the rule's effective date (60 days after the final rule is published). However, to
address commenters concerns about EPA's ability to implement this NSR permitting program in
a timely manner and to provide additional time for EPA Regions to prepare for their duties as the
Federal permitting authority, including the development of additional permitting tools, we have
extended the applicability date of the rule for true minor sources for an additional 18 months for
a total applicability delay of 36 months from the effective date of the final rule. In addition,
sources eligible to seek coverage under a general permit will be subject to that general permit 4
months after the general permit is effective (6 months after the general permit is published)
unless the source opts to apply for a site-specific permit at the time the source had to apply for
that general permit.
Therefore and based on these revisions, we are reducing the permitting burden and cost for both
the regulated community and the agency. Under the revised provisions, no permits will be
required for new and modified true minor sources during the initial 36 months after the effective
date of the rule, unless a general permit is available before the 36 month applicability date for the
source category for which the source owner is seeking a permit. Sources will still be required to
register, as in the previous version of the rule, within the first 18 months after the minor NSR
rule effective date or 90 days after the source begins operation, whichever is later.
Reduction in Economic Impacts Based on Rule Revisions
In the EIA, we present a range of estimated costs and impacts for the first 3 years after the
effective date of the rule. The "Lower Bound" costs in the EIA only include Monitoring,
Recordkeeping and Reporting (MRR) costs, computed under the conservative assumption that all
facilities choose source-specific permitting (cost and burden for the development and
implementation of general permits is unknown at this time). Under the "Upper Bound" cost
estimates some facilities are assumed to be subject to BACT.
Previously, Lower Bound costs, which are based only on MRR costs, were estimated for the first
three years after the effective date of the rule to total $22.9 million across all source categories.
Under the revised provisions, costs for this initial three-year period would total $2.7 million. The
$20.2 million reduction in costs over the initial three-year period is wholly owed to reduction in
permitting burden for new and modified true minor sources during the second 18-month interval
of the current 36-month applicability delay after the effective date of the rule.
Furthermore, previous Upper Bound costs during the first 3 years after the effective date of the
rule, which include compliance costs for BACT controls for some facilities in addition to MRR
costs, were estimated in the EIA to total $24.2 million. Under the revisions, the Upper Bound

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cost is $2.9 million. This reduction of $21.3 million is also wholly due to the reduction in
permitting burden for new and modified true minor sources during the second 18-month interval
of the current 36-month applicability delay after the effective date of the rule.
Burden Estimates in Supporting Statement
Estimated Reduction in Burden for Affected Sources. As explained previously, no permits
will be required for new and modified true minor sources during the initial 36 months after the
effective date of the rule, unless a general permit is available before the 36 month applicability
date for the source category for which the source owner is seeking a permit. Sources will still be
required to register, as in the previous version of the rule, within the first 18 months after the
minor NSR rule effective date or 90 days after the source begins operation, whichever is later.
We estimate that the level of effort and cost to register under the rule and to apply for coverage
under a general permit is similar. Therefore, the overall burden for all affected true minor
sources is projected to decrease from $22.8 million to $2.7 million, a reduction of $20.1 million
and about 1.8 million hours. The burden associated with affected true minor sources is projected
to decrease from $20.4 million to $0.3 million. The burden for new true minor sources is
projected to decrease from $18.1 million to $0.2 million. The burden for modified true minor
sources is projected to decrease from $2.3 million to about $30 thousand.
The overall hours burden for all affected true minor sources is projected to decrease from 2.1
million hours to 0.2 million hours, a reduction of 1.8 million hours. New true minor sources
account for 1.6 million of the reduction and modified true minor sources account for the
remaining 0.2 million hours.
Estimated Reduction in Agency Burden: Similarly, the administrative burden to the Agency is
projected to be lower under the revised provisions. Assuming all new and modified true minor
sources are required to either register or apply for coverage under a general permit during the
first 36 months following the rule's effective date, the Agency overall burden is projected to
decrease from $17.1 million to $6.9 million, a reduction of $10.2 million. In terms of hours, the
Agency burden falls from 162,470 hours to 76,550 hours, a reduction of approximately 85,900
hours. This decrease is wholly owed to not requiring sources to seek site-specific permits for true
minor sources during the second 18-month interval of the current 36-month applicability delay
after the effective date of the rule. The burden associated with true minor sources is projected to
decrease from $11.0 million to $0.8 million, a reduction of $10.2 million.
These estimates, however, do not include the Agency cost burden for development and
implementation of new general permits as those costs are unknown at this time.

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United Sales
Ivfl Environmental Protection
I	Agfliicy
Economic Impact Analysis for the Review of
New Sources and Modifications in Indian
Country
Final Report

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EPA-452/R-11-002
January 2011
Economic Impact Analysis for the Review of New Sources and Modifications in Indian Country
Final Report
By:
Lillian Bradley
U.S. Environmental Protection Agency
Air Economics Group
Research Triangle Park, North Carolina
Prepared for:
U.S. Environmental Protection Agency
Air Economics Group
Research Triangle Park, North Carolina
Contract No. EP-D-06-003
Assignment No. 4-77
U.S. Environmental Protection Agency
Office of Air Quality Planning and Standards
Health and Environmental Impacts Division
Air Economics Group
Research Triangle Park, North Carolina

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ACRONYMS AND ABBREVIATIONS
Acronym or

Abbreviation
Definition
AIAN
American Indian or Alaska Native
BACT
Best Available Control Technology
CBP
County Business Patterns
CFR
Code of Federal Regulations
CO
Carbon Monoxide
CSR
Cost-to-Sales Ratio
ECHO
EPA Enforcement and Compliance History Online database
EIA
Economic Impact Analysis
EPA
Environmental Protection Agency
HP
Horsepower
ICR
Information Collection Request
IRF
Information Request Form Sent by OAQPS to EPA Regions
MMBTU/hr
Million British Thermal Units per hour
MRR
Monitoring, Recordkeeping, and Reporting
NANSR
Non-Attainment New Source Review
NAAQS
National Ambient Air Quality Standards under the Clean Air Act
NAICS
North American Industry Classification System
NEI
National Emissions Inventory
NOx
Nitrous Oxides
NSR
New Source Review
OAQPS
EPA Office of Air Quality Planning and Standards
PM
Particulate Matter
PMio
Particulate Matter, 10 microns or smaller
PSD
Prevention of Significant Deterioration
RFA
Regulatory Flexibility Act
SBA
Small Business Administration
SBREFA
Small Business Regulatory Enforcement Fairness Act
SISNOSE
Significant Impact to a Substantial Number of Small Entities
sox
Sulfur Oxides
SUSB
Statistics of United States Business (U.S. Census Bureau)
TAC
Total Annualized Costs
TPY
Tons per Year
VOC
Volatile Organic Compounds
111

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CONTENTS
Section	Page
Executive Summary	ES-1
1	Introduction	1-1
1.1	Definitions	1-1
1.2	EPA Region Groups	1-4
1.3	Organization of the Economic Impact Analysis Report	1-5
2	Profile of Baseline Conditions	2-1
2.1	Data Availability and Uncertainties and Limitations	2-1
2.2	Major and Synthetic Minor Sources	2-1
2.2.1	Data on Existing Major and Synthetic Minor Sources (2009)	2-1
2.2.2	Methodology for Projecting Major Sources Expected to Exist in
2010	2-2
2.2.3	Methodology for Projecting New Major Sources Expected During
the First 6 Years after Promulgation	2-5
2.2.4	Methodology for Projecting Synthetic Minor Sources Expected to
Exist in 2010	2-7
2.2.5	Methodology for Projecting New Synthetic Minor Sources
Expected During the First 6 Years after Promulgation	2-8
2.3	Minor Stationary Sources, (or True Minor Sources)	2-9
2.3.1	Methodology for Estimating Existing Minor Sources (2009)	2-9
2.3.2	Methodology for Projecting New Minor Sources	2-10
3	Cost Analysis	3-1
3.1	General Approach for Estimating Compliance Costs for New Minor
Sources	3-1
3.2	Costs for Major Sources	3-6
3.3	Agency Costs	3-8
4	Economic Impact Analysis Methods and Results	4-1
4.1	Impacts on New Minor Sources, Minor Modifications, and New Synthetic
Minor Sources	4-1
4.2	Impacts on Major Sources	4-5
4.3	Impacts on New Synthetic Minor Sources	4-6
4.4	Impacts on Existing True Minor and Existing Synthetic Minor Sources	4-6
4.5	Small Entity Impact Analysis	4-6
5	References	R-l
v

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Appendixes
A: Method for Estimating Existing True Minor Sources and Projecting New True
Minor Sources	A-l
B: Estimated Control Costs for Affected Major and Minor Sources in Indian
Country	B-l
vi

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LIST OF TABLES
Number	Page
2-1. Estimated Number of Existing Major Sources in Indian Country, by EPA
Region Groups (2009)	2-3
2-2. Proj ected Number of Existing Maj or Sources in Indian Country, by EPA Region
Groups (2010)	2-4
2-3. Projected Number of New Major Sources in Indian Country, by EPA Region
Groups, 6-Year Period (2011-2016)	2-6
2-4. Number of Existing Synthetic Minor Sources in Indian Country, by Region
Groups (2009)	2-7
2-5. Projected Number of Existing Synthetic Minor Sources in Indian Country, by
Region Groups (2010)	2-8
2-6. Projected Number of New Synthetic Minor Sources in Indian Country, by
Region Groups, First 6 Years (2011-2016)	2-9
2-7. Estimated and Reported Existing Minor Sources in Indian Country (2009)	2-12
2-8. Estimated and Reported Existing Minor Sources in Indian Country (2010)	2-14
2-9.	Projected New Minor Sources in Indian Country, First 6 Years (2011-2016)	2-17
3-1.	Estimated National Total Annualized Control Costs by Source Type, First Year	3-3
3-2. Estimated National Total Annualized Control Costs by Source Type, Second
Year	3-3
3-3. Estimated National Total Annualized Control Costs by Source Type, Years 3
through 6 (103 $2008)	3-4
3-4. Estimated Lower-Bound National Total Annualized (MRR) Costs, First Year
(103 $2008)	3-4
3-5. Estimated Lower-Bound National Total Annualized (MRR) Costs, Second Year
(103 $2008)	3-5
3-6. Estimated Lower-Bound National Total Annualized (MRR) Costs, Years 3
through 6 (103 $2008)	3-5
3-7. Estimated Upper-Bound National Total Annualized (Control and MRR) Costs,
First Year (103 $2008)	3-6
3-8. Estimated Upper-Bound National Total Annualized (Control and MRR) Costs,
Second Year (103 $2008)	3-7
3-9. Estimated Upper-Bound National Total Annualized (Control and MRR) Costs,
Years 3 through 6 (103 $2008)	3-7
3-10. Costs for New Major Sources in Nonattainment Areas (103 $2008)	3-7
3-11.	Summary of National Costs, Including Agency Costs (106 $2008)	3-9
4-1.	Lower-Bound Cost-to-Sales Ratios (MRR Costs Only), for Minor Sources,
Minor Modifications to Existing Major and Minor Sources, and New Synthetic
Minor Sources, by Industry Sector	4-3
vii

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4-2. Upper-Bound Cost-to-Sales Ratios, for Minor Sources, Minor Modifications to
Existing Major and Minor Sources, and New Synthetic Minor Sources, BACT
and MRR Costs, by Industry Sector	4-4
4-3. Projected Numbers of New and Modified Sources Owned by Small Entities,
2011-2016, by Industry Sector	4-7
4-4. Lower-Bound Small Business Impacts for New Minor Sources, Minor
Modifications at Existing Major and Minor Sources, and New Synthetic Minor
Sources, MRR Costs Only, by Industry Sector	4-9
4-5. Upper-Bound Small Business Impacts for New Minor Sources, Minor
Modifications at Existing Major and Minor Sources, and New Synthetic Minor
Sources, BACT and MRR Costs, by Industry Sector	4-10
viii

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EXECUTIVE SUMMARY
The Review of New Sources and Modifications in Indian Country (hereafter referred to
as the rule) establishes nationally applicable regulations to implement a permitting program to
regulate the construction and modification of stationary sources of air pollution and to allow
certain new and existing stationary sources to voluntarily accept federally enforceable emission
limits to avoid major source regulations. The rule establishes procedures and terms under which
the Administrator will issue permits for new minor source facilities (new plants that are minor
sources, minor modifications to existing sources, and creation of synthetic minor sources by
voluntarily accepting emissions limitations) as well as for minor modifications at major sources.
In addition, the rule establishes procedures for permitting new major sources and major
modifications in nonattainment areas in Indian Country. The U.S. Environmental Protection
Agency (EPA) currently issues preconstruction permits in Indian Country for major sources and
major modifications in attainment and unclassifiable areas under the Prevention of Significant
Deterioration (PSD) regulations at 40 CFR Part 52.21. EPA has also issued preconstruction
permits in Indian Country for major sources and major modifications in nonattainment areas on a
case-by-case basis. Thus, the rule establishes a regulatory mechanism for permitting new major
sources (new facilities) and major modifications at existing facilities in nonattainment areas in
Indian Country. Existing minor source facilities in Indian Country at promulgation (an estimated
32,900 facilities) will be required to register but not to undertake any other compliance activities.
Existing synthetic minor facilities (an estimated 79 facilities at promulgation) are expected to be
required to acquire new permits.
EPA projected the number of new sources in Indian Country during the 6-year period
following rule promulgation, based on projected population growth rates in Indian Country.
These estimates were then revised based on information from EPA Regions. During the first 6
years following promulgation of the rule, EPA projects that there will be 110 new major sources
in Indian Country, of which 5 will be in nonattainment areas; 48 new synthetic minor sources;
7,606 new true minor sources; one major modification to an existing major source; 12 minor
modifications to existing major sources; and 984 minor modifications to minor sources.
EPA estimated a range of costs of compliance for the rule, with a lower-bound estimate
of only permitting, monitoring, recordkeeping, and reporting (MRR) costs and the upper-bound
estimate including both emissions control costs and MRR costs.
All new sources will be required to undertake permitting and MRR activities as a result
of the rule. In addition, some facilities will be required to install and operate emissions control
ES-1

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equipment, as determined based on a case-by-case review of control technologies. EPA has
estimated upper-bound costs as the sum of MRR costs and Best Achievable Control Technology
(BACT) control costs, recognizing that this upper bound overstates control costs because very
few facilities will be required to install BACT.
Existing minor sources are projected to incur a total of $2.04 million to complete
registration during the first year after the effective date of the rule. Existing synthetic minors are
estimated to incur a total of $48,800 to acquire new permits during the same time period. EPA
has delayed implementation of the rule for new and modified minor sources until 18 months after
the effective date of the rule. During the first 18 months following the rule's effective date, these
new sources will be required to register but not to be permitted. During this period, facilities will
incur costs similar to existing minor sources ($62/source).
Table ES-1 presents national total annualized costs for new minor sources, minor
modifications, and new synthetic minor sources, including lower-bound estimates (MRR costs
only) and upper-bound estimates (MRR costs plus BACT emissions control costs) for the first
year following rule promulgation, the second year following rule promulgation, and for years 3
through 6 following promulgation.
Table ES-1. Summary of National Total Annualized Costs for Minor Sources and Minor
Modifications, by Time Period (106 $2008)
Time Period
Number of Affected
Sources
Lower-Bound Estimate
(MRR Costs Only)
Upper-Bound Estimate
(MRR Costs Plus
Emissions Control Costs)
First-Year Costs
34,412
$2.3
$2.4
Second-Year Costs
1,442
$6.9
$7.4
Costs for Years 3 through 6
1,442
$13.7
$14.4
EPA estimates that new major sources in nonattainment areas will incur total annualized
costs of $40,000. However, EPA does not believe these costs are incremental, because new
major sources in nonattainment areas would have incurred similar costs to comply with source-
specific Federal Implementation Plans (FIPs) in the absence of the rule. The rule represents an
administrative change but no increase in costs. Thus, EPA does not estimate incremental impacts
for new major sources due to the rule.
In addition to the total annualized costs incurred by new sources, EPA estimates that the
Agency will incur administrative costs of $17.1 million over the first 3 years following rule
promulgation, an average of $5.7 million per year.
ES-2

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Thus, during the first year following promulgation, industry is projected to incur between
$2.3 and $2.4 million; including annual Agency burden, the national annualized cost is estimated
to be between $8.0 and $8.1 million. Because implementation of the rule was delayed 18 months
from the rule's effective date for new and modified minor sources, Year 2 includes 6 months
during which new and modified minor sources need only register and 6 months during which
they will need to obtain a permit. Costs for the second year following rule promulgation total
between $6.9 million and $7.4 million. Including annual Agency burden, the national annualized
cost is estimated to be between $12.6 million and $13.1 million. During subsequent years,
estimated total annualized incremental costs for new sources in the industry (excluding existing
minor sources, existing synthetic minor sources, and new and modified major sources) range
from $13.7 million to $14.4 million. Including annual average Agency burden, estimated total
annualized costs for the rule range from $19.4 million to $20.1 million.
After estimating costs of compliance, EPA conducted a screening assessment that
compared the total annualized costs (using the per-facility costs for the period beginning 18
months following rule promulgation) for facilities in affected sectors to typical facility revenues
in affected sectors. At the lower bound, MRR costs only, costs are below 1% of sales for all
sectors except automobile body refinishers (whose costs are less than 1.5% of sales). At the
upper bound, BACT plus MRR costs, costs are projected to be less than 3% of sales for all
sectors and less than 1% of sales for all sectors except auto body refinishers, concrete batching
plants, sand and gravel mines, sand and shot blasting operations, solid waste landfills, and wood
kitchen cabinet manufacturers. EPA estimates there may be as many as 74 new minor sources or
minor modifications at existing minor sources in these sectors in the first 6 years after rule
promulgation but only a very small share of them would be required to install BACT controls, so
very few affected new and modified minor source facilities would incur the upper-bound costs.
EPA estimated the number of new sources owned by small businesses in each sector,
based on the share of existing sources in Indian Country owned by small businesses; in all, EPA
estimates that 1,730 new minor sources, minor modifications, and new synthetic minor sources
will be owned by small businesses during the first 6 years following rule promulgation. EPA's
screening assessment compared the costs of compliance for these facilities to typical sales for
firms with fewer than 500 employees. Table ES-2 shows EPA's estimated number of new and
modified sources owned by small businesses, during the 6 years following rule promulgation.
At the lower bound, for MRR costs only, only small businesses in the automobile body
refinishing sector are estimated to incur costs greater than 1% and less than 1.5%. EPA estimates
that there may be 10 new or modified sources owned by small businesses in this sector during
the 6 years following promulgation of the rule. At the upper bound, BACT plus MRR costs,
ES-3

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Table ES-2. Projected Number of New and Modified Sources Owned by Small Businesses
Source Type
New Minor Sources
Modified Minor Sources
Synthetic Minor Sources
Minor Modifications to Major Sources
Projected Number of New and Modified Sources Owned
by Small Businesses
1,521
197
10
2
Total	1,730
several sectors (auto body refinishers, concrete batching plants, sand and gravel mining, sand and
shot blasting, solid waste landfills, and sawmills) have costs between 1% and 3% of sales. EPA
estimates that there will be at most 20 new minor sources or minor modifications owned by small
businesses in these categories in the period 2011 to 2016. In addition, EPA anticipates that only a
very small share of new or modified minor sources will incur upper-bound costs as a result of the
rule. Thus, EPA believes that the rule will not result in significant impacts to a substantial
number of small entities.
ES-4

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SECTION 1
INTRODUCTION
The Review of New Sources and Modifications in Indian Country (hereafter referred to
as the rule) establishes nationally applicable regulations to implement a permitting program to
regulate the construction and modification of stationary sources of air pollution and to allow
certain new and existing stationary sources to voluntarily accept federally enforceable emission
limits to avoid major source regulations. The rule establishes procedures and terms under which
the Administrator will issue permits for new minor source facilities (new plants that are minor
sources, minor modifications to existing sources, and creation of synthetic minor sources by
voluntarily accepting emissions limitations). In addition, the rule establishes procedures for
permitting new major sources and major modifications in nonattainment areas in Indian Country.
The U.S. Environmental Protection Agency (EPA) currently issues preconstruction permits in
Indian Country for major sources and major modifications in attainment and unclassifiable areas
under the Prevention of Significant Deterioration (PSD) regulations at 40 CFR Part 52.21. EPA
has also issued preconstruction permits in Indian Country for major sources and major
modifications in nonattainment areas on a case-by-case basis. Thus, the rule does not impose any
incremental emissions control requirements on existing major sources in nonattainment areas. It
does, however, establish a regulatory mechanism for permitting new major sources (new
facilities and major modifications at existing facilities) in nonattainment areas in Indian Country.
Existing operations at existing minor and major source facilities in Indian Country will not be
affected by the rule.
1.1 Definitions
To clarify terms used in this report, EPA provides the following definitions, which are
found in their entirety in Appendix S to 40 CFR Ch I, Part 51(pp. 494-516 of the 7-1-09 Edition
of the CFR):
Major stationary source means:
(a) Any stationary source of air pollutants which emits, or has the potential to emit, 100 tons per
year or more of any pollutant subject to regulation under the Act, except that lower emissions
thresholds shall apply in areas subject to subpart 2, subpart 3, or subpart 4 of part D, title I of the
Act, according to the thresholds listed in Appendix S to Part 51, below.
(1)	50 tons per year of volatile organic compounds in any serious ozone nonattainment
area.
(2)	50 tons per year of volatile organic compounds in an area within an ozone transport
region, except for any severe or extreme ozone nonattainment area.
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(3)	25 tons per year of volatile organic compounds in any severe ozone nonattainment
area.
(4)	10 tons per year of volatile organic compounds in any extreme ozone nonattainment
area.
(5)	50 tons per year of carbon monoxide in any serious nonattainment area for carbon
monoxide, where stationary sources contribute significantly to carbon monoxide
levels in the area (as determined under rules issued by the Administrator).
(6)	70 tons per year of PMi0 in any serious nonattainment area for PMi0;
(¦b) For the purposes of applying the requirements of paragraph IV. H of Appendix S of Part 51
to stationary sources of nitrogen oxides located in an ozone nonattainment area or in an ozone
transport region, any stationary source which emits, or has the potential to emit, 100 tons per
year or more of nitrogen oxides emissions, except that the emission thresholds in paragraphs
II. A,4(i)(/?)(/) through (6) of this Ruling apply in areas subject to subpart 2 of part D, title I of
the Act.
(1)	100 tons per year or more of nitrogen oxides in any ozone nonattainment area
classified as marginal or moderate.
(2)	100 tons per year or more of nitrogen oxides in any ozone nonattainment area
classified as a transitional, submarginal, or incomplete or no data area, when such
area is located in an ozone transport region.
(3)	100 tons per year or more of nitrogen oxides in any area designated under section
107(d) of the Act as attainment or unclassifiable for ozone that is located in an ozone
transport region.
(4)	50 tons per year or more of nitrogen oxides in any serious nonattainment area for
ozone.
(5)	25 tons per year or more of nitrogen oxides in any severe nonattainment area for
ozone.
(6)	10 tons per year or more of nitrogen oxides in any extreme nonattainment area for
ozone; or
Any physical change that would occur at a stationary source not qualifying under paragraph
II.A.4(i)(a) or (b) of this Ruling as a major stationary source, if the change would constitute a
major stationary source by itself. A major stationary source that is major for volatile organic
compounds or nitrogen oxides is major for ozone. Fugitive emissions are generally not included
in determinations of whether a stationary source is a major source, although Appendix S to Part
51 lists several categories of stationary sources for which the fugitive emissions of a stationary
source shall be included in determining whether the source is major.
Major modification means any physical change in or change in the method of operation of a
major stationary source that would result in:
1-2

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1.	A significant emissions increase of a regulated New Source Review (NSR) pollutant
(as defined in paragraph II.A.31 of Appendix S of Part 51); and
2.	A significant net emissions increase of that pollutant from the major stationary
source.
Any significant emissions increase (as defined in paragraph II. A.23 of this Ruling) from any
emissions units or net emissions increase (as defined in paragraph II.A.6 of this Ruling) at a
major stationary source that is significant for volatile organic compounds shall be considered
significant for ozone. Appendix S of Part 51 lists several activities that would not be considered
a physical change or change in the method of operation of the facility; specifies that any
significant net increase in nitrogen oxides is considered significant for ozone, and that any
physical change in or change in the method of operation of, a major stationary source of volatile
organic compounds (VOCs) that results in any increase in emissions of VOCs from any discrete
operation, emissions unit, or other pollutant emitting activity at the source shall be considered a
significant net emissions increase and a major modification for ozone, if the major stationary
source is located in an extreme ozone nonattainment area that is subject to subpart 2, part D, title
I of the Act. Appendix S also notes that fugitive emissions are not included unless the source is
in one of the specific categories listed in Appendix S's definition of major source.
A minor stationary source (often referred to simply as a minor source or true minor source)
generally means a source that emits or has the potential to emit regulated NSR pollutants in
amounts that are less than the major stationary source levels. However, for purposes of this rule,
a minor source is a source that emits or has the potential to emit regulated NSR pollutants in
amounts that are less than the major stationary source levels but has potential emissions higher
than the minor NSR thresholds. For the purposes of this definition, the potential to emit includes
fugitive emissions, to the extent that they are quantifiable, only if the source is in one of the
source categories listed in 40 CFR 52.21(b)(l)(iii). The term "minor stationary source" applies
independently to each regulated NSR pollutant that the source has the potential to emit and
excludes any emissions units and activities that have been exempted from regulation according
to final 40 CFR 49.153(c).
Synthetic minor source means a source that has the potential to emit regulated NSR pollutants
in amounts that are at or above the major source thresholds in 40 CFR 49.167 or 52.21, as
applicable, but that has taken an enforceable restriction so that its potential to emit (PTE) is less
than the major source thresholds and, for purposes of this rule, above the minor NSR thresholds
as well.
Minor modification. For the purposes of the minor NSR program, a minor modification is
defined at 40 CFR 49.152(d) as any physical or operational change at a stationary source that
would cause an increase in the allowable emissions of the affected emissions units above the
minor NSR thresholds for any regulated NSR pollutant or that would cause the emission of any
regulated NSR pollutant not previously emitted. For the purposes of this definition, fugitive
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emissions, to the extent that they are quantifiable, are included only if the source is in one of the
source categories listed in 40 CFR 52.21(b)(l)(iii). The following exemptions apply:
•	A physical or operational change does not include routine maintenance, repair, or
replacement.
•	An increase in the hours of operation or in the production rate is not considered an
operational change unless such change is prohibited under any permit condition that
is enforceable as a practical matter.
•	A change in ownership at a stationary source is not considered a modification.
Major source of hazardous air pollutants is any stationary source or group of contiguous
sources under common control that emits or has the potential to emit considering control, in the
aggregate, 10 tons per year or more of any hazardous air pollutant (Sec. 112(b)(1) of the Clean
Air Act [CAA]) or 25 tons per year or more of any combination of hazardous air pollutants.
Area source of hazardous air pollutants is any stationary source or group of contiguous
sources that is not a major source of hazardous air pollutants and emits or has the potential to
emit any hazardous air pollutant or combination of hazardous air pollutants above the threshold
level.
1.2 EPA Region Groups
EPA conducted its analysis at the EPA Region level and then grouped the EPA Regions
to reflect Regions with similar source types. EPA Region 3 contains no federally recognized
Tribes, so it is omitted from the analysis. EPA grouped the Regions as follows: Regions 1, 2, and
4; Regions 5, 7, and 10; and Regions 6, 8, and 9. Because the analysis is conducted for the
continental United States only, the EPA Regions in the analysis include the following states:
Region 1: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont
Region 2: New Jersey and New York
Region 4: Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina,
and Tennessee
Region 5: Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin
Region 6: Arkansas, Louisiana, New Mexico, Oklahoma, and Texas
Region 7: Iowa, Kansas, Missouri, and Nebraska
Region 8: Colorado, Montana, North Dakota, South Dakota, Utah, and Wyoming
Region 9: Arizona, California, and Nevada
Region 10: Idaho, Oregon, and Washington
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1.3 Organization of the Economic Impact Analysis Report
The analysis is organized as follows. Section 2 provides a profile of the baseline
conditions for the analysis. In Section 3, the Agency estimates the costs and burdens that would
typically result from implementing the rule. Section 4 describes the underlying assumptions and
computations EPA made in estimating the economic impacts of the rule, including estimating the
number of affected small entities and examining the rule's possible impact on these entities.
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SECTION 2
PROFILE OF BASELINE CONDITIONS
Promulgation of the Review of New Sources and Modifications in Indian Country will
result in regulation of air emissions from new and modified minor sources, minor modifications
to existing major sources, and sources accepting emissions limitations to become synthetic minor
sources. In addition, the rule establishes the nonattainmentNSR program for major sources and
major modifications to sources in Indian Country. In addition, the minor NSR portion of the rule
will require the registration of existing minor sources. This section provides a profile of the
baseline conditions and describes the underlying assumptions and computations that were made
in support of the analysis.
2.1	Data Availability and Uncertainties and Limitations
A first step in analyzing the impacts of the rule is characterizing the baseline conditions
in the absence of the rule (year 2009). Characterizing the baseline requires estimating the number
of existing major and minor sources in Indian Country in 2009 and projecting the number of new
sources that will be created in Indian Country during the period 2011 to 2016. Data on major
sources in Indian Country are publicly available because major sources are required to obtain
Title V permits. However, data on minor sources are very limited because existing minor sources
are not required to have permits.
The analysis presented here is for the continental United States; thus, it does not include
data for Alaska Native Villages or Hawaii. Furthermore, the nationwide results are presented
geographically by groups of EPA Regions to reflect those Regions that have similar source
categories, as described in Section 1.
2.2	Major and Synthetic Minor Sources
This section describes the data used to estimate the number and type of existing major
and synthetic minor sources in Indian Country, and the methods and data used to project the
number of new major and synthetic minor sources over the first 6 years following rule
promulgation (i.e., 6-year period, 2011 through 2016).
2.2.1 Data on Existing Major and Synthetic Minor Sources (2009)
We obtained data from EPA's Enforcement and Compliance History Online (ECHO)
database (http://www.epa-echo.gov/echo/) in May 2009, as well as data from various EPA
Regions on existing major sources in Indian Country. However, the data from the ECHO
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database were reviewed and amended by Tribal experts in the EPA Regions based on the
information gathered by them. For example, several Regions identified sources not listed in
ECHO or identified sources that had shut down. The revised data for existing major sources are
shown in Table 2-1, while the data for existing synthetic minor sources are shown later in this
section in Table 2-4. These data reflect actual data for the year 2009; thus, these values are not
estimates.
In summary, there were 157 existing major sources and 64 existing synthetic minor
sources in Indian Country in 2009.
2.2.2 Methodology for Projecting Major Sources Expected to Exist in 2010
The number of existing sources in the previous section was used to estimate the number
of major sources that would exist in late 2010. We present our projection methods for new major
sources first; then we describe methods for projecting new synthetic minor sources. Although the
data sources and projection methodologies are similar, major source and synthetic minor sources
are regulated differently under the rule.
1.	We assumed that the number of major sources in Indian Country in each Region
would grow at the same rate as the American Indian and Alaska Native (AIAN)
population in each Region.
2.	Estimated AIAN growth rates for each state were calculated based on Census
projections of the state-level AIAN population for the period 2000 to 2015 (U.S.
Census Bureau, 1996), and we assumed the annual growth rates remain valid through
2016. AIAN growth rates for each EPA Region were then computed as the
population-weighted average of the state growth rates. This approach assumes that all
sectors with major sources will grow at the same rate, and that all new major sources
and major modifications will occur in the same sectors as the existing major sources.
3.	This basic approach was augmented with information from EPA Regions about the
expected number of new sources.
Table 2-2 shows the projected number of major sources in Indian Country in 2010, by
EPA Region group. Overall, we estimate that there will be 179 existing major sources in Indian
Country in 2010.
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Table 2-1. Estimated Number of Existing Major Sources in Indian Country, by EPA
Region Groups (2009)a
EPA Region Groups
Industry Description
1,2,4
5, 7,10
6,8,9
Total
Wood Furniture Manufacturing
1
0
0
1
Crude Petroleum and Natural Gas Extraction
0
0
101
101
Natural Gas Liquid Extraction
0
0
6
6
Power Generation
0
0
0
0
Fossil Fuel Electric Power Generation
0
0
4
4
Natural Gas Distribution
0
0
1
1
Fabric Coating Mills
0
0
1
1
Sawmills
0
6
2

Hardwood Veneer and Plywood Manufacturing
0
1
0
1
Softwood Veneer and Plywood Manufacturing
0
1
0
1
Wood Window and Door Manufacturing
0
1
0
1
All Other Miscellaneous Wood Product Manufacturing
0
1
0
1
All Other Basic Inorganic Chemical Manufacturing
0
0
1
1
Plastics Plumbing Fixture Manufacturing
0
1
0
1
Pipeline Transportation of Natural Gas
0
3
5
8
Solid Waste Landfill
0
0
3
3
Aluminum Production
0
0
1
1
Non-fossil Fuel Power Generation
0
0
2
2
Coal Mining
0
0
2
2
Natural Gas Compressor Station
0
0
7
7
Casino/Hotel
0
3
1
4
Other (Boilers)
0
1
1
2
Total Existing Sources
1
18
138
157
a Estimates and projections are presented by EPA Region groupings, which are defined geographically. Note that
EPA Region 3 has no federally recognized Indian Tribes and is thus omitted from the tables.
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Table 2-2. Projected Number of Existing Major Sources in Indian Country, by EPA Region
Groups (2010)a
EPA Region Groups
Industry Description
1,2,4
5, 7,10
6,8,9
Total
Wood Furniture Manufacturing
1
0
0
1
Crude Petroleum and Natural Gas Extraction
0
0
119
119
Natural Gas Liquid Extraction
0
0
6
6
Power Generation
0
0
2
2
Fossil Fuel Electric Power Generation
0
0
4
4
Natural Gas Distribution
0
0
1
1
Fabric Coating Mills
0
0
1
1
Sawmills
0
6
2

Hardwood Veneer and Plywood Manufacturing
0
1
0
1
Softwood Veneer and Plywood Manufacturing
0
1
0
1
Wood Window and Door Manufacturing
0
1
0
1
All Other Miscellaneous Wood Product Manufacturing
0
1
0
1
All Other Basic Inorganic Chemical Manufacturing
0
0
1
1
Plastics Plumbing Fixture Manufacturing
0
1
0
1
Pipeline Transportation of Natural Gas
0
3
5
8
Solid Waste Landfill
0
0
3
3
Aluminum Production
0
0
1
1
Non-fossil Fuel Power Generation
0
0
2
2
Coal Mining
0
0
2
2
Natural Gas Compressor Station
0
0
9
9
Casino/Hotel
0
3
1
4
Other (Boilers)
0
1
1
2
Total Existing Major Sources
1
18
160
179
Growth rate based on U.S. Census Bureau. Projected State Populations, by Sex, Race, and Hispanic Origin, 1995—
2025. http://www.census.gov/population/projections/state/stpjrace.txt.
2-4

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2.2.3 Methodology for Projecting New Major Sources Expected During the First 6 Years
after Promulgation
The same method was used to project the number of major sources at the end of the
6-year period.
1.	We assumed that the number of major sources in Indian Country in each Region
would grow at the same rate as the AIAN population in each Region.
2.	We estimated AIAN growth rates for each state based on Census projections of state-
level AIAN population for the period of 2000 to 2015 (U.S. Census Bureau, 1996).
AIAN growth rates for each EPA Region were then computed as the population-
weighted average of the state growth rates. Major sources in each Region were
projected by applying the Region-specific AIAN growth rate to the numbers of major
sources estimated to exist in 2010. Then the number of new major sources was
computed by subtracting the projected number of major sources at the beginning of
the 6-year period from the estimated sources at the end of the period. This approach
assumes that all sectors with major sources will grow at the same rate, and that all
new major sources and major modifications will occur in the same sectors as the
existing major sources. We project that there will be 110 new major sources in Indian
Country during the period 2011 to 2016, as shown in Table 2-3.
3.	To identify the number of new major sources in nonattainment areas, we assumed that
the same percentage of new sources would be in nonattainment areas (approximately
5%) as were reported in the ECHO database in 2009. Thus, we estimate that only 5 of
the 110 new major sources in Indian Country would be in a nonattainment area.
4.	Based on experience with other rulemakings, we estimated at most one of the major
sources in nonattainment areas would choose to make a major modification during the
6-year period.
5.	Based on experience with other rulemakings, we assumed that two major sources per
year will choose to make a minor modification during the 6-year period, for a total of
12 minor modifications to major facilities.
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Table 2-3. Projected Number of New Major Sources in Indian Country, by EPA Region
Groups, 6-Year Period (2011-2016)
EPA Region Groups
Industry Description
1,2,4
5, 7,10
6,8,9
Total
Wood Furniture Manufacturing
0
0
0
0
Crude Petroleum and Natural Gas Extraction
0
0
108
108
Natural Gas Liquid Extraction
0
0
1
1
Power Generation
0
0
0
0
Fossil Fuel Electric Power Generation
0
0
0
0
Natural Gas Distribution
0
0
0
0
Fabric Coating Mills
0
0
0
0
Sawmills
0
1
0
1
Hardwood Veneer and Plywood Manufacturing
0
0
0
0
Softwood Veneer and Plywood Manufacturing
0
0
0
0
Wood Window and Door Manufacturing
0
0
0
0
All Other Miscellaneous Wood Product Manufacturing
0
0
0
0
All Other Basic Inorganic Chemical Manufacturing
0
0
0
0
Plastics Plumbing Fixture Manufacturing
0
0
0
0
Pipeline Transportation of Natural Gas
0
0
0
0
Solid Waste Landfill
0
0
0
0
Aluminum Production
0
0
0
0
Non-fossil Fuel Power Generation
0
0
0
0
Coal Mining
0
0
0
0
Natural Gas Compressor Station
0
0
0
0
Casino/Hotel
0
0
0
0
Other (Boilers)
0
0
0
0
Total New Major Sources
0
1
109
110
Growth rate based on U.S. Census Bureau. Projected State Populations, by Sex, Race, and Hispanic Origin, 1995—
2025. http://www.census.gov/population/projections/state/stpjrace.txt.
2-6

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2.2.4 Methodology for Projecting Synthetic Minor Sources Expected to Exist in 2010
The data on existing synthetic minor sources in 2009 (Table 2-4) was used to estimate the
number of synthetic minor sources that would exist in late 2010 as follows:
1.	We assumed that the number of synthetic minor sources in Indian Country in each
Region would grow at the same rate as the AIAN population in each Region.
2.	We estimated AIAN growth rates for each state based on Census projections of the
state-level AIAN population for the period 2000 to 2015,1 and we assumed the annual
AIAN growth rates remain valid through 2016. AIAN growth rates for each EPA
Region were then computed as the population-weighted average of the state growth
rates. This approach assumes that all sectors with synthetic minor sources will grow
at the same rate, and that all new major modifications will occur in the same sectors
as the existing synthetic minor sources.
3.	This basic approach was augmented with information from EPA Regions about the
expected number of new sources.
Table 2-4. Number of Existing Synthetic Minor Sources in Indian Country, by Region
Groups (2009)
EPA Region Groups
Industry Description
1,2,4
5, 7,10
6,8,9
Total
Crude Petroleum and Natural Gas Extraction
0
0
33
33
Sand and Gravel Mining
0
0
1
1
All Other Nonmetallic Mineral Mining
0
0
1
1
Hydroelectric Power Generation
0
2
0
2
Sawmills
0
5
1
6
Asphalt Paving Mixture and Block Manufacturing
0
2
0
2
Casino/Hotel
0
0
1
1
Softwood Veneer and Plywood Manufacturing
0
1
0
1
Fiberglass Manufacturing
0
1
0
1
Agricultural Post-harvest Chemicals
0
1
0
1
Slaughterhouse
0
0
0
0
Other (Boilers)
2
0
13
15
Total
2
12
50
64
Table 2-5 shows the projected number of synthetic minor sources in Indian Country in
2010, by EPA Region group. Overall, we estimate that there will be 79 existing synthetic minor
sources in Indian Country in 2010.
1 U.S. Census Bureau, Projected State Populations, by Sex, Race and Hispanic Origin, 1995-2025.
http://www.census.gov/population/projections/state/stpjrace.txt.
2-7

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Table 2-5. Projected Number of Existing Synthetic Minor Sources in Indian Country, by
Region Groups (2010)
EPA Region Groups
Industry Description
1,2,4
5, 7,10
6,8,9
Total
Crude Petroleum and Natural Gas Extraction
0
0
34
34
Sand and Gravel Mining
0
0
1
1
All Other Nonmetallic Mineral Mining
0
0
1
1
Hydroelectric Power Generation
0
2
0
2
Sawmills
0
5
1
6
Asphalt Paving Mixture and Block Manufacturing
0
4
0
4
Casino/Hotel
0
0
1
1
Softwood Veneer and Plywood Manufacturing
0
1
0
1
Fiberglass Manufacturing
0
1
0
1
Agricultural Post-harvest Chemicals
0
1
0
1
Slaughterhouse
0
1
0
1
Other (Boilers)
2
0
24
26
Total
2
15
62
79
Growth rate based on U.S. Census Bureau. Projected State Populations, by Sex, Race, and Hispanic Origin, 1995—
2025. http://www.census.gov/popuIation/projections/state/stpjrace.txt.
2.2.5 Methodology for Projecting New Synthetic Minor Sources Expected During the First 6
Years after Promulgation
The same method was used to project the number of synthetic minor sources at the end of
the 6-year period.
1.	EPA assumed that the number of synthetic minor sources in Indian Country in each
Region would grow at the same rate as the American Indian and AIAN population in
each Region.
2.	We estimated AIAN growth rates for each state based on Census projections of the
state-level AIAN population for the period 2000 to 2015, and assumed the annual
growth rate remains valid through 2016. AIAN growth rates for each EPA Region
were then computed as the population-weighted average of the state growth rates.
Synthetic minor sources in each Region were projected by applying the Region-
specific AIAN growth rate to the numbers of major sources estimated to exist in
2010. Then the number of new synthetic minor sources was computed by subtracting
the projected number of sources at the beginning of the 6-year period from the
estimated sources at the end of the period. This approach assumes that all sectors with
synthetic minor sources will grow at the same rate, and that all new sources will occur
in the same sectors as the existing synthetic minor sources. Our estimated numbers of
synthetic minor sources were reviewed by the EPA Regions and revised according to
their comments. We project that there will be 48 new synthetic minor sources during
2-8

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the 6-year period. Table 2-6 presents the projected new synthetic minor sources
during the period 2011 to 2016.
Table 2-6. Projected Number of New Synthetic Minor Sources in Indian Country, by
Region Groups, First 6 Years (2011-2016)
EPA Region Groups
Industry Description
1,2,4
5, 7,10
6,8,9
Total
Crude Petroleum and Natural Gas Extraction
0
0
12
12
Sand and Gravel Mining
0
0
0
0
All Other Nonmetallic Mineral Mining
0
0
0
0
Hydroelectric Power Generation
0
0
0
0
Sawmills
0
0
0
0
Asphalt Paving Mixture and Block Manufacturing
0
0
0
0
Casino/Hotel
0
0
0
0
Softwood Veneer and Plywood Manufacturing
0
0
0
0
Fiberglass Manufacturing
0
0
0
0
Agricultural Post-harvest Chemicals
0
0
0
0
Slaughterhouse
0
0
0
0
Other (Boilers)
0
0
36
36
Total
0
0
48
48
Growth rate based on U.S. Census Bureau. Projected State Populations, by Sex, Race, and Hispanic Origin, 1995—
2025. http://www.census.gov/population/projections/state/stpjrace.txt.
2.3 Minor Stationary Sources, (or True Minor Sources)
The method for estimating the number of existing minor sources in Indian Country and
projecting the number of new minor sources during the first 6 years after rule promulgation is
more complex, because data on existing minor sources in Indian Country are limited. Appendix
A illustrates the process for estimating existing new minor sources and then projecting the
number of new minor sources.
2.3.1 Methodology for Estimating Existing Minor Sources (2009)2
EPA's methodology for estimating existing minor sources in 2009 used data from a
variety of sources.
2 Existing minor source estimates are assumed to be valid for 2009.
2-9

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1.	EPA used all available information to identify the types of sources likely to be found
in Indian Country, including
-	regional reports to the Office of Air Quality Planning and Standards (OAQPS)
-	National Emissions Inventory (NEI) categories identified in the proposal (North
American Industry Classification System [NAICS] codes)
-	additional categories listed in the NEI (NAICS codes)
-	additional categories listed on the Information Request Forms (IRFs) sent to the
Regions
2.	We estimated the share of income in each EPA Region that is associated with the
AIAN geographical locations. EPA chose to use an income ratio to estimate the share
of facilities in each NAICS on AIAN lands because income is a good proxy for
economic activity. This is the same method that was used for the proposal economic
impact analysis (EIA). The following relationship was used to calculate this income
ratio:
V (Income per capita for AIAN )* (Population for each AIAN geographic area)
Income Ratio = —	
(Estimated income of the Region where AIAN is located)
3.	We obtained data on the number of establishments for each affected NAICS from
2002 Statistics of U.S. Businesses3 for each state.
4.	We grouped the data into EPA Regions.
5.	We estimated the number of sources in Indian Country in each Region and minor
source NAICS code/source category using the following equation, based on each
AIAN geographic area's income ratio:
Number of Sources = (Income Ratio) * (Total Number of Establishments in Each Region).
6.	We then sent the estimated number of existing sources to the EPA Regions for
review, and based on the information gathered by them, several Regions amended the
information.
2.3.2 Methodology for Projecting New Minor Sources
The overall approach for projecting new minor sources, as described below, is similar to
that used for projecting new major and synthetic minor sources.
1. We assumed that the number of minor sources in Indian Country in each Region
would grow at the same rate as the AIAN population in each Region.
3 U.S. Census Bureau. Statistics of U.S. Businesses, 2002. Data from all U.S. and Puerto Rico business
establishments with paid employees (excludes certain source categories and most government employees). Data
for establishments are presented by geographic area, 6-digit NAICS, and employment size class.
http://www.census.gov/econ/susb/data/susb2002.html.
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2.	We estimated AIAN growth rates for each state based on Census projections of state-
level AIAN populations for the period of 2005 to 2015; we assumed the annual AIAN
growth rates remain valid through 2016.4
3.	We calculated AIAN growth rates for each EPA Region as the population-weighted
average of the state growth rates. Minor sources in each Region were then projected
by applying the Region-specific AIAN growth rate to the number of minor sources
estimated/reported in 2010. This reflects the same assumptions underlying the major
source and synthetic minor sources projections, that all sectors with minor sources
will grow at the same rate as the AIAN population, and that all new minor sources
will be in the same sectors as the existing minor sources.
4.	To project new minor sources during the first 6 years after rule promulgation, the
estimated number of existing minor sources in 2010 was projected to grow at AIAN
population growth rates for 6 years. New minor sources were estimated by
subtracting projected minor sources at the beginning of the period from projected
minor sources at the end of the period. Overall, we project that there will be 7,606
new true minor sources in Indian Country in the 6 years after rule promulgation.
5.	To estimate the number of minor modifications to these sources subject to the rule,
EPA assumed based on experience that 10% (3,289) of existing minor sources would
choose to make changes to their facilities each year. However, it is anticipated that of
these minor source process/operational modifications, only 5% will result in emission
increases greater than the minor NSR threshold. We estimate that 984 minor
modifications to minor sources will require permits during the first 6 years after
promulgation.
Table 2-7 presents the resulting estimated/reported minor sources for 2009, and Table 2-8
presents the resulting estimated minor sources for 2010. In 2010, Regions 1, 2, and 4 are
estimated to have approximately 300 existing true minor source facilities. Regions 5, 7, and 10
are estimated to have approximately 800 true minors, and Regions 6, 8, and 9 are estimated to
have approximately 31,800, for a total of approximately 32,900.
4 U.S. Census Bureau. Projected State Populations, by Sex, Race, and Hispanic Origin, 1995-2025.
http://www.census.gov/population/projections/state/stpjrace.txt.
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Table 2-7. Estimated and Reported Existing Minor Sources in Indian Country (2009)
Industry Description
EPA Region Groups
1,2,4 5,7,10 6,8,9
Total
Logging
5
7
49
61
Forestry Support Activities
0
1
19
20
Oil and Natural Gas Wells
5
30
23,774
23,809
Rock Mining Gravel
3
12
83
98
Electric Power Generation
0
3
78
81
Natural Gas Distribution
1
3
77
81
Agricultural Irrigation
2
4
216
222
Sewage Treatment Facilities
0
15
19
34
Sand Blasting
12
25
178
215
Animal Food Manufacturing
1
1
15
17
Fruit Concentrate Processing
0
1
1
2
Canned Vegetable Plant
0
1
1
2
Meat Packing
1
5
45
51
Mint Distillery
0
2
0
2
Lumber Saw Mill
1
3
25
29
Softwood, Veneer and Plywood
0
0
4
4
Reconstituted Wood Products
0
1
1
2
Millwork
2
3
20
25
Wood Pellet Fuel Plant
1
2
8
11
Box Manufacturing
0
1
5
6
Printing Operations Lithographic
11
16
183
210
Petroleum Refineries (Post-harvest Coating Manufacture for Fruit-Paraffin)
0
2
9
11
Asphalt Hot Mix
0
6
42
48
Chemical Preparation
0
2
63
65
Liquid Fertilizer Storage Distribution
0
3
5
8
Explosives Manufacturing
0
0
0
0
Clay and Ceramics Operations
0
1
178
179
Concrete Batching Plant
2
11
68
81
Fiber Glass Operations
0
2
17
19
Mineral and Earth Manufacturing
0
0
1
1
Aluminum Manufacturing
0
0
2
2
Casting Foundry
1
2
13
16
Fabricated Structural Metal
5
10
102
117
Metal Can Manufacturing
0
1
1
2
Coating Painting Facilities
2
4
201
207
(continued)
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Table 2-7. Estimated and Reported Existing Minor Sources in Indian Country (2009)
(continued)
Industry Description
EPA Region Groups
1,2,4 5,7,10 6,8,9
Total
Surface Coating Operations
1
2
16
19
Fabricated Metal Products
3
8
62
73
Machinery Manufacturing
1
3
10
14
Communications Equipment Manufacturing
0
1
7
8
Transportation Equipment Manufacturing
0
0
6
6
Wood Kitchen Cabinet Manufacturing
4
6
39
49
Furniture Manufacturing
0
1
8
9
Grain Elevator
2
24
81
107
Gasoline Bulk Plant
1
5
37
43
Automobile Dealers
18
34
345
397
Gas Stations
40
157
1,016
1,213
Pipeline Transportation of Natural Gas
0
2
34
36
Airports and Services
0
3
25
28
Professional, Scientific, Technical Services
4
7
50
61
Solid Waste landfill
0
9
21
30
Other Solid Waste/Incineration
0
0
22
22
Hospitals
3
8
87
98
Social Assistance
11
18
170
199
Casino/Hotels
10
51
136
197
Restaurants
74
133
1,326
1,533
Automobile Light Duty Operation
31
57
538
626
Automobile Refinishing Shop
14
31
250
295
Welding Operations
9
22
260
291
Cremation
1
3
31
35
Dry Cleaner
6
13
173
192
Tribal Governments
0
0
145
145
Boilers
0
1
126
127
Feedlot
0
0
0
0
Surgical Instrument Manufacturing
0
0
0
0
Paper Manufacturing
0
0
0
0
Residential Construction General Contractor
0
0
0
0
Other
0
0
23
23
Grand Total
288
779
30,547
31,614
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Table 2-8. Estimated and Reported Existing Minor Sources in Indian Country (2010)
Industry Description
EPA Region Groups
1,2,4 5,7,10 6,8,9
Total
Logging
5
8
49
62
Forestry Support Activities
0
1
19
20
Oil and Natural Gas Wells
5
30
24,923
24,958
Rock Mining Gravel
3
12
85
100
Electric Power Generation
0
3
80
83
Natural Gas Distribution
1
3
78
82
Agricultural Irrigation
2
4
219
225
Sewage Treatment Facilities
0
16
19
35
Sand Blasting
13
25
180
218
Animal Food Manufacturing
1
1
15
17
Fruit Concentrate Processing
0
1
1
2
Canned Vegetable Plant
0
1
1
2
Meat Packing
1
5
45
51
Mint Distillery
0
2
1
3
Lumber Saw Mill
1
4
25
30
Softwood, Veneer and Plywood
0
0
4
4
Reconstituted Wood Products
0
1
1
2
Millwork
2
3
20
25
Wood Pellet Fuel Plant
1
2
8
11
Box Manufacturing
0
1
5
6
Printing Operations Lithographic
11
17
185
213
Petroleum Refineries (Post-harvest Coating Manufacture for Fruit-Paraffin)
0
2
9
11
Asphalt Hot Mix
0
6
44
50
Chemical Preparation
0
2
66
68
Liquid Fertilizer Storage Distribution
0
3
5
8
Explosives Manufacturing
0
0
0
0
Clay and Ceramics Operations
0
1
181
182
Concrete Batching Plant
3
11
69
83
Fiber Glass Operations
0
2
18
20
Mineral and Earth Manufacturing
0
0
1
1
Aluminum Manufacturing
0
0
2
2
Casting Foundry
1
3
13
17
Fabricated Structural Metal
5
11
103
119
Metal Can Manufacturing
0
1
1
2
Coating Painting Facilities
2
4
206
212
(continued)
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Table 2-8. Estimated and Reported Existing Minor Sources in Indian Country (2010)
(continued)
EPA Region Groups
Industry Description
1,2,4
5, 7,10
6,8,9
Total
Surface Coating Operations
1
2
17
20
Fabricated Metal Products
3
9
63
75
Machinery Manufacturing
1
3
10
14
Communications Equipment Manufacturing
0
1
7
8
Transportation Equipment Manufacturing
0
0
6
6
Wood Kitchen Cabinet Manufacturing
4
6
39
49
Furniture Manufacturing
0
1
8
9
Grain Elevator
2
25
82
109
Gasoline Bulk Plant
1
5
37
43
Automobile Dealers
19
35
348
402
Gas Stations
42
158
1,031
1,231
Pipeline Transportation of Natural Gas
0
2
34
36
Airports and Services
0
3
26
29
Professional, Scientific, Technical Services
4
7
51
62
Solid Waste landfill
0
9
22
31
Other Solid Waste/Incineration
0
0
23
23
Hospitals
3
8
89
100
Social Assistance
11
19
172
202
Casino/Hotels
10
51
138
199
Restaurants
76
136
1,341
1,553
Automobile Light Duty Operation
33
58
546
637
Automobile Refinishing Shop
16
31
253
300
Welding Operations
9
22
264
295
Cremation
1
3
31
35
Dry Cleaner
6
14
176
196
Tribal Governments
0
0
147
147
Boilers
0
1
131
132
Feedlot
0
0
0
0
Surgical Instrument Manufacturing
0
0
0
0
Paper Manufacturing
0
0
0
0
Residential Construction General Contractor
0
0
0
0
Other
0
0
24
24
Grand Total
299
795
31,797
32,891
Sectors identified by EPA from various sources (see above); number of facilities estimated based on AIAN share of
total income in each EPA Region.
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Table 2-9 presents projected new minor sources for the first 6 years after the effective
date of the rule. EPA projects that Regions 1, 2, and 4 will have 17 new sources during the first 6
years following the effective date of the rule. Regions 5, 7, and 10 are projected to have 59 new
minor sources, and Regions 6, 8, and 9 are projected to have 7,530 new minor sources.
Therefore, EPA projects a total of 7,606 new minor sources in Indian Country during the 6-year
period, 2011 through 2016.
In summary, EPA estimates that 32,900 existing minor source facilities would be
required to register, and 79 existing synthetic minor sources would be required to obtain new
permits. Over the first 6 years of the rule, EPA projected that the rule will affect 7,606 new true
minor sources, 48 new synthetic minor sources, 12 minor modifications to existing major
sources, and 984 minor modifications to existing minor sources. In addition, EPA believes the
rule would provide a new regulatory mechanism to permit an estimated 5 new major sources in
nonattainment areas and at most one major modification to a major source over the 6-year
period.
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Table 2-9. Projected New Minor Sources in Indian Country, First 6 Years (2011-2016)

EPA Region Groups

Industry Description
1,2,4
5, 7,10
6,8,9
Total
Logging
0
1
3
4
Forestry Support Activities
0
0
1
1
Oil and Natural Gas Wells
0
2
7,006
7,008
Rock Mining Gravel
0
0
7
7
Electric Power Generation
0
0
7
7
Natural Gas Distribution
0
0
6
6
Agricultural Irrigation
0
0
21
21
Sewage Treatment Facilities
0
2
2
4
Sand Blasting
1
2
11
14
Animal Food Manufacturing
0
0
1
1
Fruit Concentrate Processing
0
0
0
0
Canned Vegetable Plant
0
0
0
0
Meat Packing
0
0
3
3
Mint Distillery
0
0
0
0
Lumber Saw Mill
0
0
3
3
Softwood, Veneer and Plywood
0
0
1
1
Reconstituted Wood Products
0
0
0
0
Millwork
0
0
1
1
Wood Pellet Fuel Plant
0
0
0
0
Box Manufacturing
0
0
0
0
Printing Operations Lithographic
0
1
13
14
Petroleum Refineries (Post-harvest Coating Manufacture for Fruit-Paraffin)
0
0
1
1
Asphalt Hot Mix
0
0
5
5
Chemical Preparation
0
0
7
7
Liquid Fertilizer Storage Distribution
0
0
0
0
Explosives Manufacturing
0
0
0
0
Clay and Ceramics Operations
0
0
18
18
Concrete Batching Plant
0
1
5
6
Fiber Glass Operations
0
0
1
1
Mineral and Earth Manufacturing
0
0
0
0
Aluminum Manufacturing
0
0
0
0
Casting Foundry
0
0
1
1
Fabricated Structural Metal
0
1
6
7
Metal Can Manufacturing
0
0
0
0
Coating Painting Facilities
0
0
24
24
(continued)
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Table 2-9. Projected New Minor Sources in Indian Country, First 6 Years (2011-2016)
(continued)
EPA Region Groups
Industry Description
1,2,4
5, 7,10
6,8,9
Total
Surface Coating Operations
0
0
1
1
Fabricated Metal Products
0
0
4
4
Machinery Manufacturing
0
0
1
1
Communications Equipment Manufacturing
0
0
0
0
Transportation Equipment Manufacturing
0
0
0
0
Wood Kitchen Cabinet Manufacturing
0
0
2
2
Furniture Manufacturing
0
0
0
0
Grain Elevator
0
2
8
10
Gasoline Bulk Plant
0
0
2
2
Automobile Dealers
2
3
21
26
Gas Stations
3
15
77
95
Pipeline Transportation of Natural Gas
0
0
2
2
Airports and Services
0
0
3
3
Professional, Scientific, Technical Services
0
1
3
4
Solid Waste Landfill
0
1
2
3
Other Solid Waste/Incineration
0
0
3
3
Hospitals
0
0
7
7
Social Assistance
0
2
11
13
Casino/Hotels
1
4
15
20
Restaurants
6
11
90
107
Automobile Light Duty Operation
3
5
38
46
Automobile Refinishing Shop
1
2
16
19
Welding Operations
0
2
19
21
Cremation
0
0
3
3
Dry Cleaner
0
1
13
14
Tribal Governments
0
0
15
15
Boilers
0
0
17
17
Feedlot
0
0
0
0
Surgical Instrument Manufacturing
0
0
0
0
Paper Manufacturing
0
0
0
0
Residential Construction General Contractor
0
0
0
0
Other
0
0
3
3
Grand Total
17
59
7,530
7,606
Growth rate based on U.S. Census Bureau. Projected State Populations, by Sex, Race, and Hispanic Origin, 1995—
2025. http://www.census.gov/population/projections/state/stpjrace.txt.
2-18

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SECTION 3
COST ANALYSIS
All new sources in Indian Country will be required to obtain a permit and conduct
compliance activities referred to broadly as monitoring, recordkeeping, and reporting (MRR)
activities. In addition, new sources may be required to install control equipment and undertake
other compliance activities; these activities will be different for new minor sources and new
major sources. Thus, we discuss the development of cost estimates separately for minor sources
and major sources.
3.1 General Approach for Estimating Compliance Costs for New Minor Sources
EPA began by identifying the minor source categories listed in Table 2-9 having the
largest numbers of projected new sources and grouped several similar source categories together.
After identifying the most common types of minor sources likely to be affected by the rule, EPA
developed an approach that estimates compliance costs for a typical new facility for each source
category. New minor sources will be subject to various requirements during the permitting
process under the rule, including
•	case-by-case review of control technology by EPA or Tribal air agency,
•	air quality impact analysis upon request by the reviewing authority,
•	MRR activities, and
•	public participation through public notices and comment requirements and
administrative and judicial review upon a permit appeal.
EPA estimated a range of costs of compliance for the rule, with a lower-bound estimate
of only permitting, MRR costs and an upper-bound estimate including both emissions control
costs and MRR costs.
All new minor sources will be required to obtain a permit and conduct MRR activities.
Thus, estimated costs of MRR activities represent the minimum costs that will be incurred by
affected new sources. A full description of the development of these cost estimates, along with
the assumptions used for labor rates and capital outlays, is presented in the Supporting Statement
for the Information Collection Request (ICR).
In addition to MRR activities, some new sources will be required to install control
equipment. The specific control technology requirements are uncertain, because of the case-by-
case control technology review process. EPA has thus estimated the costs of installing Best
Available Control Technology (BACT) controls for each source category, recognizing that most
3-1

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new minor sources will not be required to install BACT controls. Thus, BACT control costs plus
MRR costs represent the maximum costs likely to be incurred by a new minor source.
To estimate the costs of BACT controls, process throughput or operating capacities are
needed to size and cost air pollution controls and to estimate emissions. These values are selected
to reflect typical minor source sizes for the source category. In some cases they are based on a
national average value; others are based on existing size categories where the lower-end values
are selected to characterize minor sources, and in some cases, the values were based on
information contained in the available Tribal emission inventories. EPA used this information to
develop estimates of compliance costs for typical new facilities in each minor source category.
EPA then reviewed existing regulations to determine controls required in the absence of
the rule and estimated incremental control costs attributable to the rule. These costs included
one-time costs, such as purchasing and installing control equipment and annual costs such as
labor and materials. The one-time costs were annualized over their expected service life at a 7%
rate of interest, reflecting private cost of capital. The sum of the annualized one-time costs and
the annual costs are the total annualized costs incurred by each facility type.
EPA has adequate information to complete cost estimates for emission controls.
However, because of a lack of data on existing sources in Indian Country and the uncertainties
associated with projecting the number of new facilities and modifications to existing facilities in
the future, the current data will provide national cost estimates that are correspondingly
uncertain. EPA estimated the costs of emissions controls based on the assumption that all
affected new sources would be required to install BACT. Because requirements for each new
source will be determined on a case-by-case basis, this will likely overstate the costs for some
facilities.
Appendix B presents the estimated compliance costs for typical new sources in Indian
Country. For each source category, the table in Appendix B shows the estimated capital cost per
source of BACT and the total annualized BACT cost, including annualized capital costs and
annual costs such as labor and materials.
Because EPA is delaying implementation of the rule for new minor sources and minor
modifications of minor sources for 18 months, and because existing true minor sources and
existing synthetic minor sources experience one-time costs during the first year following the
effective date of the rule, we are presenting the costs broken out according to time period. We
present the costs for the first year (including annualized costs for new and modified minor
sources and one-time costs for existing sources), for the second year (showing registration costs
for new and modified sources during the first 6 months and permitting costs during the second 6
months), and for years 3 through 6 (permitting costs for new and modified sources). First-year
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costs affect many more facilities, but the cost per facility is generally low, approximately $62 per
source. In subsequent years, the 32,891 existing minor sources and the 79 existing synthetic
minor sources no longer incur costs, so the number of affected facilities is much lower; however,
the cost per facility increases. National BACT control costs for the first year are shown in
Table 3-1, for the second year in Table 3-2, and for subsequent years in Table 3-3. They were
computed by multiplying the number of projected affected sources in each category by the
estimated control costs per source. This is certainly an overestimate of the control costs that will
be incurred by affected new and modified minor sources under the rule's case-by-case control
technology review. EPA recognizes that not all new sources will be required to install BACT
controls; however, these represent upper-bound national control cost estimates that are needed to
compute the maximum national costs, which are reported later in this section.
Table 3-1. Estimated National Total Annualized Control Costs by Source Type, First Year

Number of Affected
National Total Annualized
Affected Source Type
Sources, First Year
Control Costs (103 $2008)
New Minor Sources
1,268
$0
Modifications to Minor Sources
164
$0
Existing Synthetic Minor Sources
79
$0
Existing True Minor Sources
32,891
$0
Minor Modifications to Major Sources
2
$0
New Synthetic Minor Sources
8
$80
Totals
34,412
$80
Table 3-2. Estimated National Total Annualized Control Costs by Source Type, Second
Year



Number of Affected
National Total Annualized
Affected Source Type
Sources, Second Year
Control Costs (103 $2008)
New Minor Sources (Costs Applicable for the First 6
634
$0
Months of the Second Year)


New Minor Sources (Costs Applicable for the Second 6
634
$270
Months of the Second Year)


Modifications to Minor Sources (Costs Applicable for
82
$0
the First 6 Months of the Second Year)


Modifications to Minor Sources (Costs Applicable for
82
$80
Second 6 Months of the Second Year)


Minor Modifications to Major Sources
2
$0
New Synthetic Minor Sources
8
$80
Totals
1,442
$430
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Table 3-3. Estimated National Total Annualized Control Costs by Source Type, Years 3
through 6 (103 $2008)
Affected Source Type
Number of Affected
Sources per Year
National Total Annualized
Control Costs (103 $2008)
New Minor Sources
1,268
$540
Modifications to Minor Sources
164
$160
Minor Modifications to Major Sources
2
$0
New Synthetic Minor Sources
8
$80
Totals
1,442
$780
In addition to control costs, affected sources are expected to incur MRR costs associated
with the NSR permit program. Some of the MRR costs are one-time costs, and others are annual
costs. The detailed explanation for the rule's MRR costs is presented in the Supporting Statement
(EPA, 2011). Table 3-4 shows the estimated MRR costs for the first year, Table 3-5 shows
estimated MRR costs for the second year, and Table 3-6 presents estimated MRR costs for
subsequent years. As explained above, these are broken out according to time period because the
rule's requirements for several source types vary over time. MRR costs are the minimum or
lower-bound costs that could be incurred by affected sources.
Table 3-4. Estimated Lower-Bound National Total Annualized (MRR) Costs, First Year
(103 $2008)
Affected Source Type
Number of Affected
Sources, First Year
Total Annual
Cost per Source
(103 $2008)
National Total
Annualized MRR Costs,
First Year (103 $2008)
New Minor Sources
1,268
$0,062
$79
Modifications to Minor Sources
164
$0,062
$10
Existing Synthetic Minor Sources (One
Time Cost, First Year)
79
$0.62
$50
Existing True Minor Sources (One Time
Cost, First Year)
32,891
$0,062
$2,040
Minor Modifications to Major Sources
2
$9,435
$20
New Synthetic Minor Sources
8
$9,435
$80
Totals	34,412	$2,279
a For details, see the Supporting Statement for the Review of New Sources and Modifications in Indian Country
Rule.
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Table 3-5. Estimated Lower-Bound National Total Annualized (MRR) Costs, Second Year
(103 $2008)
Affected Source Type
Number of
Affected Sources,
Second Year
Total Annual National Total
Cost per Source Annualized MRR Costs
(103 $2008) (103 $2008)
New Minor Sources (Costs Applicable for First
6 Months of the Second Year)
634
$0,062
$79
New Minor Sources (Costs Applicable for
Second 6 Months of the Second Year)
634
$9,435
$5,982
Modifications to Minor Sources (Costs
Applicable for First 6 Months of the Second
Year)
82
$0,062
$10
Modifications to Minor Sources (Costs
Applicable for Second 6 Months of the
Second Year)
82
$9,435
$774
Minor Modifications to Major Sources
2
$9,435
$20
New Synthetic Minor Sources
8
$9,435
$80
Totals
1,442

$6,945
Table 3-6. Estimated Lower-Bound National Total Annualized (MRR) Costs, Years 3
through 6 (103 $2008)
Number of Affected
Sources per Year,
Affected Source Type Years 3 through 6
Total Annual Cost
per Source
National Total
Annualized MRR
Costs, Subsequent
Years3 (103 $2008)
New Minor Sources
1,268
$9,435
$12,000
Modifications to Minor Sources
164
$9,435
$1,550
Minor Modifications to Major Sources
2
$9,435
$20
New Synthetic Minor Sources
8
$9,435
$80
Totals
1,442

$13,650
a For details, see the Supporting Statement for the Review of New Sources and Modifications in Indian Country
Rule.
For the first year following promulgation, existing, new, and modified minor sources
incur costs to comply with the rule's registration requirements. Existing synthetic minor sources
incur costs to obtain new permits. After the first year, existing sources incur no costs unless they
choose to modify their facilities. During the first half of the second year, new and modified
minor sources are required to register; during the second half of the second year, they are
required to obtain a permit. The estimated MRR costs for the second year reflect these
3-5

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requirements. During years 3 through 6, all new sources are required to obtain permits and incur
the estimated MRR costs associated with those activities.
Table 3-7 shows estimated upper-bound total national costs, including both BACT
control costs and MRR costs by source category for the first year following rule promulgation.
Table 3-8 shows estimated upper-bound costs for the second year, including both MRR costs and
BACT costs where applicable. Table 3-9 shows estimated total national costs, including
estimated BACT and MRR costs for years 3 through 6. Estimated upper-bound costs increase
from $2.4 million to $7.4 million from the first to the second year following promulgation. For
subsequent years, the estimated upper-bound national total annualized costs equal approximately
$14.4 million.
Table 3-7. Estimated Upper-Bound National Total Annualized (Control and MRR) Costs,
First Year (103 $2008)


National Total

Number of Affected
Annualized Costs (First
Affected Source Type
Sources per Year
Year)
New Minor Sources
1,268
$79
Modifications to Minor Sources
164
$10
Existing Synthetic Minor Sources (One Time, First Year)
79
$50
Existing True Minor Sources (One Time, First Year)
32,891
$2,040
Minor Modifications to Major Sources
2
$20
New Synthetic Minor Sources
8
$160
Totals
34,412
$2,359
3.2 Costs for Major Sources
EPA estimates that there will be approximately one new major source per year in the oil
and gas extraction sector, with a total annualized cost of approximately $40,000, including
control costs and MRR costs, during the 6 years following promulgation. However, EPA
believes that new major sources would have incurred these costs in the absence of the rule,
because EPA would have been required to implement a source-specific FIP. Therefore, the final
rule just provides a regulatory mechanism for permitting such sources; it does not change any of
the compliance requirements. In addition, since the permitting process may be less uncertain
under the final rule, new and modifying major sources could potentially experience cost savings
compared to baseline conditions. Thus, the costs in Table 3-10 are not considered to be
incremental because of the rule. Because EPA expects at most one major modification in Indian
Country during the 6-year period, annual costs for major modifications are assumed to be $0.
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Table 3-8. Estimated Upper-Bound National Total Annualized (Control and MRR) Costs,
Second Year (103 $2008)
Affected Source Type
Number of Affected
Sources per Year
National Total
Annualized Costs
(Second Year)
New Minor Sources (Costs Applicable for First 6 Months of Second
Year)
634
$79
New Minor Sources (Costs Applicable for Second 6 Months of Second
Year)
634
$6,252
Modifications to Minor Sources (Costs Applicable for First 6 Months
of Second Year)
82
$10
Modifications to Minor Sources (Costs Applicable for Second 6
Months of Second Year)
82
$854
Minor Modifications to Major Sources
2
$20
New Synthetic Minor Sources
8
$160
Totals
1,442
$7,375
Table 3-9. Estimated Upper-Bound National Total Annualized (Control and MRR) Costs,
Years 3 through 6 (103 $2008)
Affected Source Type
Number of Affected
Sources per Year
National Total
Annualized Costs
(Subsequent Years)
New Minor Sources
1,268
$12,540
Modifications to Minor Sources
164
$1,710
Minor Modifications to Major Sources
2
$20
New Synthetic Minor Sources
8
$160
Totals
1,442
$14,430
Table 3-10. Costs for New Major Sources in Nonattainment Areas (103 $2008)
Costs
Number of Affected
Sources per Year
Total Annualized
Costs (103 $2008)
Control Costs
1
$30
MRR Costs
1
$10
Totals
1
$40
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3.3 Agency Costs
In addition to costs incurred by regulated facilities, EPA examined the costs to the
Agency resulting from the rule. These costs are discussed in detail in the Supporting Statement
for the Review of New Sources and Modifications in Indian Country (EPA, 2011). The costs are
estimated by examining the Agency activities associated with administering the rule for each
type of affected facility, estimating the number of hours required for each activity, and
multiplying these hours by appropriate hourly salary rates to compute the total labor cost per
affected source.
The average total annual cost to the Agency per affected source is calculated by
determining the total labor cost for all the various respondent activities. The costs for those
activities are then added to any associated costs (e.g., total travel expenses for inspections
attended) to get the average Agency burden per facility per year. Because the Agency activities
are similar for processing a permit for a major or minor source, and because we anticipate only
one new major source in a nonattainment area per year for the first 3 years following
promulgation, the cost to the Agency for each affected source is assumed to be the same. The
average total annual cost to the Agency per affected source (new majors, new minors, and
modifications) given in Attachment 2 of the ICR, including the cost of labor, materials,
operation, and maintenance, is $3,037 per year. The average total cost to the Agency per affected
existing synthetic minor source is $693 and per true existing minor source is $180. (A detailed
description of the estimation of Agency costs is provided in the Supporting Statement for the
Review of New Sources and Modifications in Indian Country.) (EPA, 2011)
The bottomline Agency total annual burden costs are calculated by taking the average
cost to the Agency per facility ($4,932) and multiplying by the number of affected sources in
Indian Country during the first 3 years following promulgation. The nationwide total annual cost
to EPA or Tribal agencies as shown in Table 3 of the ICR Supporting Statement is $17.1 million
for the first 3 years (an average of $5.7 million per year). Total national costs, including costs for
affected sources and costs to the Agency, are shown in Table 3-11. First-year costs range from
$8.0 to $8.1 million, second-year costs range from $12.6 to $13.1 million, and subsequent-year
costs range from $19.4 to $20.1 million.
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Table 3-11. Summary of National Costs, Including Agency Costs3 (106 $2008)
Time Period
Number of
Affected
Sources
Lower-Bound
Estimate (MRR
Costs Only)
National
Lower-Bound
Costs,
Including
Agency Costs
Upper-Bound
Estimate (MRR
Costs Plus
Emissions
Control Costs)
National
Upper-Bound
Costs,
Including
Agency Costs
First-Year Costs
34,412
$2.3
$8.0
$2.4
$8.1
Second-Year Costs
1,442
$6.9
$12.6
$7.4
$13.1
Costs for Years 3
through 6
1,442
$13.7
$19.4
$14.4
$20.1
aAgency costs are estimated to average $5.7 million per year.
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SECTION 4
ECONOMIC IMPACT ANALYSIS METHODS AND RESULTS
The purpose of the EIA is to evaluate the effect of the rule on the welfare of affected
stakeholders and society as a whole. To inform its assessment of economic impacts, the Agency
developed a qualitative assessment of potential economic impacts of the rule on facility
construction and market prices. In addition, EPA conducted a simple screening analysis,
described in more detail below, to develop quantitative measures of the potential impacts of the
rule. As described in Section 3 above, EPA expects new minor source facilities to incur some
incremental costs as a result of the rule. In this analysis, EPA presents a range of economic
impacts corresponding to the range of potential costs of compliance described in Section 3. At a
minimum, facilities are expected to incur MRR costs; at a maximum, new sources will also incur
the costs of installing BACT controls. This is a maximum cost assumption, because most new
sources will not be required to install BACT controls. Existing minor and major sources may
incur compliance costs associated with permitting and emission controls for modifications to
their facilities. Because the costs and impacts are expected to be different for minor sources and
major sources, we analyze them separately.
4.1 Impacts on New Minor Sources, Minor Modifications, and New Synthetic Minor
Sources
In this section, EPA presents its analysis of economic impacts on minor source facilities.
Because minor source facilities are largely unregulated at baseline, EPA estimates that
companies wishing to site new minor source facilities in Indian Country will incur some
incremental costs. The incremental costs include costs associated with permitting, MRR, and
emission control costs for companies choosing to invest in a new minor source facility or to
make minor modifications to existing minor sources.
The rule could alter firms' economic choices because it would increase the costs of
production for siting new minor source facilities in Indian Country. Firms considering building
new facilities are faced with a decision on location and size of the new facility. In its analysis,
EPA assumes that, without the rule, new minor source facilities in Indian Country are not
regulated; thus, the rule will increase the cost of siting such a facility. Because the rule affects
only new and modified sources in Indian Country, it will increase the costs of siting these
sources in Indian Country, relative to other locations. The rule incorporates case-by-case review
of control technologies, in an effort to protect air quality in Indian Country while allowing
economic growth.
4-1

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The economic sectors expected to invest in new minor source facilities or minor
modifications in Indian Country produce a variety of goods and face demand curves of varying
elasticities. Similarly, different types of facilities will face different estimated incremental costs.
EPA does not have sufficient data to estimate the market impacts (changes in prices and market
quantities) or the impacts on investment decisions (changes in rates of return and in numbers of
projects undertaken) in each affected sector. However, EPA has undertaken a screening analysis
to assess the relative magnitude of the costs of compliance for each affected economic sector.
As discussed in Section 3, EPA has delayed implementation of the rule for new minor
sources and minor modifications at minor sources; these source types would only incur the costs
of registration during the first 18 months following promulgation. Because costs for new minor
sources and minor modifications would increase after the first 18 months following rule
promulgation, EPA's screening assessment compares the total annualized cost of complying with
the rule for typical facilities in each sector after the first 18 months (for lower-bound MRR costs
only, and upper-bound MRR plus BACT costs) with facility sales for typical facilities in each
sector. Table 4-1 shows the establishment sales test (estimated total annualized cost for a typical
affected facility)/(sales receipts for a typical establishment) for MRR costs only. Data on the
sales receipts, number of enterprises (firms), and number of establishments for these sectors were
obtained from the Census Bureau's Statistics of U.S. Businesses, 2002 (SUSB, 2002) and
County Business Patterns, 2002 (CBP, 2002).
Overall, the MRR costs of complying with the rule for minor sources are generally low
and unlikely to cause significant reductions in the rate of investment in new minor source
facilities in Indian Country. In Table 4-1, costs are shown to be less than 1% of sales and, thus,
are not likely to result in significant impacts to the firms owning these facilities. For facilities in
the auto body refinishing sector, costs are estimated to fall between 1% and 1.5% of sales. This
ratio is also low enough that it is not expected to have an adverse impact on the facilities.
Some facilities will be required to install control equipment and will incur not only the
costs of MRR activities, but also the costs of purchasing, installing, and operating required
controls. The maximum level of control such affected facilities would be required to achieve
would be BACT. Thus, the upper-bound impacts are computed by summing estimated MRR
costs and BACT control costs for each sector. Table 4-2 presents establishment sales test results
(cost-to-sales ratios) for typical facilities in each sector under the maximum cost assumptions.
Across all source categories, cost-to-sales ratios range from 0.02% to 2.87%. Examining the
upper-bound costs, we see that six sectors have costs between 1% and 3% of sales. No sectors
have costs exceeding 3% of sales.
4-2

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Table 4-1. Lower-Bound Cost-to-Sales Ratios (MRR Costs Only), for Minor Sources,
Minor Modifications to Existing Major and Minor Sources, and New Synthetic Minor
Sources, by Industry Sector
Source Category
NAICS Code
Estimated
Number of
Sources3
Average Total
Annualized Cost Per
Entity ($1,000)
Costs as
Percentage of
Sales
Animal Food Manufacturing
311119
1
$9.44
0.06%
Asphalt Hot Mix
324121
7
$9.44
0.14%
Auto Body Refinishing
811121
27
$9.44
1.25%
Beef Cattle Complex, Slaughter House and
Meat Packing Plant
3116
5
$9.44
0.02%
Casting Foundry (Iron)
331511
2
$9.44
0.05%
Chemical Preparation
3251
9
$9.44
0.02%
Clay and Ceramics Operations (Kilns)
32711
23
$9.44
0.22%
Concrete Batching Plant
327320
8
$9.44
0.20%
Crude Petroleum and Natural Gas Extraction
21111
7,781
$9.44
0.04%
Electric Power Generation
22111
9
$9.44
0.02%
Fabricated Metal Products
3329
77
$9.44
0.12%
Fabricated Structural Metal
3323
123
$9.44
0.21%
Fiber Glass Operations
3279
2
$9.44
0.16%
Gasoline Bulk Plant
424710
4
$9.44
0.01%
Gasoline Station (Storage Tanks, Refueling)
4471
160
$9.44
0.39%
Grain Elevator
424510
13

0.04%
Machinery Manufacturing
33311
14
$9.44
0.05%
Millwork (Wood Products Mfg)
32191
2
$9.44
0.17%
Natural Gas Distribution
221210
8
$9.44
0.04%
Oil and Gas Production/Operations
211112
6
$9.44
0.04%
Other (Natural Gas-Fired Boilers)-Used
Casino/Hotels
72112
105
$9.44
0.00%
Printing Operations (Lithographic)
323110
20
$9.44
0.30%
Professional, Scientific, and Technical Services
54171
19
$9.44
0.16%
Sand and Gravel Mining
212321
10
$9.44
0.41%
Sand and Shot Blasting Operations
238990
21
$9.44
0.85%
Sawmills
32113
4
$9.44
0.14%
Sewage Treatment Facilities
221320
5
$9.44
0.65%
Softwood Veneer and Plywood Manufacturing
321212
1
$9.44
0.02%
Solid Waste Landfill
562212
5
$9.44
0.19%
Surface Coating Operations
332812
32
$9.44
0.19%
Wood Kitchen Cabinet Manufacturing
337110
3
$9.44
0.52%
Other (No Costs Estimated)

158


Total

8,664


aSources include new minor sources, minor modifications to existing major or minor sources, and new synthetic
minor sources.
4-3

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Table 4-2. Upper-Bound Cost-to-Sales Ratios, for Minor Sources, Minor Modifications to
Existing Major and Minor Sources, and New Synthetic Minor Sources, BACT and MRR
Costs, by Industry Sector
Source Category
NAICS Code
Estimated
Number of
Sources3
Average Total
Annualized Cost Per
Entity ($1,000)
Costs as
Percentage of
Sales
Animal Food Manufacturing
311119
1
$15.00
0.10%
Asphalt Hot Mix
324121
7
$9.44
0.14%
Auto Body Refinishing
811121
27
$9.44
1.25%
Beef Cattle Complex, Slaughter House and
Meat Packing Plant
3116
5
$18.47
0.05%
Casting Foundry (Iron)
331511
2
$10.68
0.06%
Chemical Preparation
3251
9
$9.44
0.02%
Clay and Ceramics Operations (Kilns)
32711
23
$9.44
0.22%
Concrete Batching Plant
327320
8
$135.13
2.87%
Crude Petroleum and Natural Gas Extraction
21111
7,781
$9.44
0.04%
Electric Power Generation
22111
9
$9.44
0.02%
Fabricated Metal Products
3329
77
$9.44
0.12%
Fabricated Structural Metal
3323
123
$9.44
0.21%
Fiber Glass Operations
3279
2
$9.44
0.16%
Gasoline Bulk Plant
424710
4
$15.93
0.01%
Gasoline Station (Storage Tanks, Refueling)
4471
160
$9.99
0.41%
Grain Elevator
424510
13
$69.36
0.27%
Machinery Manufacturing
33311
14
$9.44
0.05%
Millwork (Wood Products Mfg)
32191
2
$45.46
0.82%
Natural Gas Distribution
22121
8
$9.44
0.05%
Oil and Gas Production/Operations
211112
6
$9.44
0.04%
Other (Natural Gas-Fired Boilers)-Used
Casino/Hotels
72112
105
$18.47
0.03%
Printing Operations (Lithographic)
323110
20
$11.64
0.37%
Professional, Scientific, and Technical Services
54171
19
$18.47
0.32%
Sand and Gravel Mining
212321
10
$49.35
2.16%
Sand and Shot Blasting Operations
238990
21
$19.77
1.77%
Sawmills
32113
4
$49.35
0.73%
Sewage Treatment Facilities
221320
5
$9.44
0.65%
Softwood Veneer and Plywood Manufacturing
321212
1
$45.46
0.11%
Solid Waste Landfill
562212
5
$49.58
1.01%
Surface Coating Operations
332812
32
$9.44
0.19%
Wood Kitchen Cabinet Manufacturing
337110
3
$45.46
2.51%
Other (No Costs Estimated)

158


Total

8,664


aSources include new minor sources, minor modifications to existing major or minor sources, and new synthetic
minor sources.
4-4

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The analysis described above is based on a range of estimated costs of compliance for
typical minor source facilities compared to estimated sales for typical facilities. Generally, EPA
believes that the costs will be substantially lower than the upper-bound estimates and would thus
not impose significant impacts on typical firms considering construction or modification of a
minor source. Within each sector there is likely to be substantial variation in costs, facility sales,
and company sales and profits. Thus, it is possible that individual companies might find that the
costs for a specific project would be sufficient to discourage them from investing.
4.2 Impacts on Major Sources
EPA projects new major sources in nonattainment areas in only one sector: oil and gas
extraction. EPA estimates that there will be at most one new major source per year in
nonattainment areas in Indian Country. EPA estimated compliance costs for new major sources
in nonattainment areas in Indian Country; however, EPA believes that these costs would
generally have been incurred without the rule and, thus, will have no incremental adverse
economic impact on new major sources.
In the absence of the final rule, EPA would be required to implement a source-specific
FIP. Therefore, the final rule just provides a regulatory mechanism for permitting such sources; it
does not change any of the compliance requirements. In addition, since the permitting process
may be less uncertain under the final rule, new and modifying major sources could potentially
experience cost savings compared to baseline conditions. Reducing the uncertainty about the
timing and cost of permitting new major source facilities in nonattainment areas in Indian
Country will reduce the need to wait for more information and will make investors more likely to
invest.
Existing major sources in nonattainment areas that choose to make a major modification
to their facilities are also subject to the rule. EPA projects at most one major modification to a
major source over the first 6 years after rule promulgation. Costs and impacts are estimated to be
similar to, or lower than, those for a new major source and would be incurred in the absence of
the rule.
Existing major source facilities that elect to make minor modifications are also expected
to incur compliance costs under the rule. EPA estimates that 12 facilities will make minor
modifications over the entire study period. Although there are company-specific data on existing
major sources in nonattainment areas, EPA is not able to identify which of the major source
facilities may decide to make minor modifications. Costs incurred by major sources making
minor modifications are estimated to be similar to, or lower than, costs incurred by new minor
source facilities. To assess the relative magnitude of the costs of compliance for each of the
affected economic sectors, EPA conducted a screening analysis. Comparing the costs of minor
4-5

-------
modifications (assumed to be equivalent to the costs for a new minor facility) to typical sales for
facilities in affected sectors, EPA projected costs to be less than 1% of sales for facilities in all
major source sectors.
4.3	Impacts on New Synthetic Minor Sources
For those sources that choose to accept enforceable emission limitations to become a
synthetic minor source, no resulting adverse economic impacts are expected for any businesses,
including small businesses. No impacts are anticipated because this option is entirely optional
and rational firms would only make this choice if it resulted in a cost savings. Thus, although
projected new synthetic minor sources are included in the facility counts in this section, EPA
does not project that such sources will incur incremental costs due to the rule.
4.4	Impacts on Existing True Minor and Existing Synthetic Minor Sources
Existing true minor sources and existing synthetic minor sources will be required to
undertake some MRR activities and, thus, will incur some incremental costs due to the rule.
During the first year following the effective date of the rule, existing true minor sources will be
required to register at an estimated cost of $62 per facility. These costs are very low and will
impose no appreciable burden on existing minor sources. During the first year following the
effective date of the rule, existing synthetic minor sources are required to submit a permit
application at an estimated cost of $618 per facility. Again, these costs are sufficiently low that
they are not expected to impose an appreciable impact on affected existing sources.
4.5	Small Entity Impact Analysis
Although all entities owning affected sources are subject to the rule, small entities (small
businesses, governments, or nonprofit organizations) may have special problems complying with
regulations because they have fewer financial resources, fewer workers to implement changes,
and less engineering and legal expertise, for example. The Regulatory Flexibility Act (RFA) of
1980 as amended in 1996 by the Small Business Regulatory Enforcement Fairness Act
(SBREFA) generally requires an agency to prepare a regulatory flexibility analysis of a rule
unless the agency certifies that the rule will not have a significant economic impact on a
substantial number of small entities (no SISNOSE).
This document describes the underlying assumptions and computations EPA made in
estimating the number of affected small entities (in this case, small businesses) and examines the
rule's possible impact on these entities. Table 4-3 presents the projected number of new and
modified sources owned by small entities during the first 6 years following the effective date of
the rule, together with the Small Business Administration's Size Standard criteria (SBA, 2010)
for small businesses under each NAICS code. EPA's screening assessment used the costs
4-6

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Table 4-3. Projected Numbers of New and Modified Sources Owned by Small Entities,
2011-2016, by Industry Sector
NAICS
Sector Description
New
Minor
Sources
Modified
Minor
Sources
Synthetic
Minor
Sources
Minor
Modifications
to Major
Sources
Total Projected
Sources Owned
by Small
Entities by
Sector
324121
Asphalt Hot Mix
1



1
811121
Auto Body Refinishing
4
6


10
3116
Beef Cattle Complex, Slaughter House
and Meat Packing Plant
1



1
3251
Chemical Preparation
1



1
32711
Clay and Ceramics Operations (Kilns)
4
1


5
327320
Concrete Batching Plant
1



1
211111
Crude Petroleum and Natural Gas
Extraction
1,402
150
3
2
1,557
22111
Electric Power Generation
1



1
3329
Fabricated Metal Products

1


1
3323
Fabricated Structural Metal

1


1
4471
Gasoline Station (Storage Tanks,
Refueling)
19
7


26
424510
Grain Elevator




3
33311
Machinery Manufacturing

3


3
221210
Natural Gas Distribution
1
1


2
21111
Oil and Gas Production/Operations
(Minor O&G)
1



1
72112
Other (Natural Gas-Fired Boilers)8
11
10
7

28
323110
Printing Operations (Lithographic)
3
1


4
54171
Professional, Scientific, and Technical
Services
3
1


4
212321
Sand and Gravel Mining
1
1


2
238990
Sand and Shot Blasting Operations
3
1


4
321113
Sawmills (Minor Source)
1
1


2
221320
Sewage Treatment Facilities
1



1
562212
Solid Waste Landfill
1



1
332812
Surface Coating Operations
Other (Costs Not Estimated)b
5
54
3
8


8
62

Total
1,521
197
10
2
1,730
"Used NAICS for casino/hotels but includes Tribal governments also,
includes crematories, restaurants, car dealers, social assistance, other unspecified.
4-7

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applicable beginning 18 months following the effective date of the rule. The screening
assessment is presented in Tables 4-4 and 4-5. EPA's screening assessment compares estimated
lower-bound and upper-bound total annualized costs to facility sales for facilities owned by
companies with fewer than 500 employees (U.S. Census Bureau, 2002). Table 4-4 presents MRR
costs as a percentage of sales, which represents the lower-bound costs incurred by new minor
sources. Table 4-5 presents cost-to-sales ratios for BACT costs plus MRR costs, which
represents the upper-bound costs that would be incurred by affected new minor sources, and
likely overstates the costs incurred by most facilities.
EPA employed criteria (EPA, 2006) widely used in conducting such screening analyses
to assess the severity of potential impacts. Companies incurring costs less than 1% of sales are
not expected to incur substantial impacts due to the rule. Companies incurring costs exceeding
3% of sales are estimated to incur potentially significant impacts. Companies with costs between
1% and 3% may or may not incur substantial impacts.
Because EPA does not expect new or major sources or major modifications to major
sources to experience incremental impacts under the rule, EPA's analysis of small business
impacts focuses on impacts associated with new minor source facilities and minor modifications
to existing minor and major sources. EPA estimates that small businesses investing in new minor
source facilities, minor modifications to existing minor sources, and minor modifications to
existing major sources over the period 2011 through 2016 will incur costs that are less than 3%
of sales in all sectors, even when BACT control costs are included. Under lower-bound costs,
only new auto body refinishers owned by small businesses are projected to experience costs
exceeding 1% of sales (1.3%). Under upper-bound costs, most sectors are estimated to incur
costs less than 1% of average small company sales revenues; however, small companies
choosing to invest in new minor sources in six sectors—auto body refinishers, concrete batching
plants, sand and gravel mining, sand and shot blasting, solid waste landfills, and sawmills—are
estimated to incur costs between 1% and 3% of sales. Whether costs of this magnitude are
significant is uncertain; however, EPA believes the upper-bound costs are overstated for most
minor sources.
Assuming that the share of new sources owned by small businesses is comparable to the
share of existing sources owned by small businesses (less than 20%), EPA projects that at most
20 new minor sources or minor modifications would be owned by small businesses in these
sectors over the 6 years following rule promulgation. Only a very small share of new minor
sources is projected to incur BACT control costs, so the costs of controls are likely
overestimated. Thus, EPA does not believe that the rule will impose significant economic
impacts on a substantial number of small entities (no SISNOSE).
4-8

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Table 4-4. Lower-Bound Small Business Impacts for New Minor Sources, Minor
Modifications at Existing Major and Minor Sources, and New Synthetic Minor Sources,
MRR Costs Only, by Industry Sector
Source Category
SBA Size
Standard in
Millions of
Dollars or
Employees
Estimated
Number of
Affected
Sources
Owned by
Small
Businesses
Costs as
Percentage of
Average Total Sales for
Annualized Cost Facilities Owned
Per Entity by Firms with
($103 2008) <500 Employees
Asphalt Hot Mix
500
1
$944
0.15%
Auto Body Refinishing
$7
10
$9.44
1.30%
Beef Cattle Complex, Slaughter House and
Meat Packing Plant
500
1
$9.44
0.12%
Chemical Preparation
1,000
1
$9.44
0.07%
Clay and Ceramics Operations (Kilns)
750
5
$9.44
0.55%
Concrete Batching Plant
500
1
$9.44
0.23%
Crude Petroleum and Natural Gas Extraction
500
1,557
$9.44
0.22%
Electric Power Generation
—
1
$9.44
0.04%
Fabricated Metal Products
500
1
$9.44
0.26%
Fabricated Structural Metal
500
1
$9.44
0.27%
Gasoline station (Storage Tanks, Refueling)
$27
26
$9.44
0.49%
Grain Elevator
100
3
$9.44
0.04%
Machinery Manufacturing
500
3
$9.44
0.22%
Natural Gas Distribution
500
2
$9.44
0.04%
Oil and Gas Production/Operations
500
1
$9.44
0.22%
Other (Natural Gas-Fired Boilers)-Used
Casino/Hotels
$30
28
$9.44
0.16%
Printing Operations (Lithographic)
500
4
$9.44
0.51%
Professional, Scientific, and Technical
Services
500
4
$9.44
0.31%
Sand and Gravel Mining
500
2
$9.44
0.51%
Sand and Shot Blasting Operations
$14
4
$9.44
0.85%
Sawmills
500
2
$9.44
0.22%
Sewage Treatment Facilities
$7
1
$9.44
0.93%
Solid Waste Landfill
$12.5
1
$9.44
0.46%
Surface Coating Operations
500
8
$9.44
0.30%
Other (Costs Not Estimated)

62


Total
1,730
4-9

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Table 4-5. Upper-Bound Small Business Impacts for New Minor Sources, Minor
Modifications at Existing Major and Minor Sources, and New Synthetic Minor Sources,
BACT and MRR Costs, by Industry Sector


Estimated




Number of

Costs as

SBA Size
Affected

Percentage of

Standard in
Sources
Average Total
Sales for

Millions of
Owned by
Annualized Cost
Facilities Owned

Dollars or
Small
Per Entity
by Firms with
Source Category
Employees
Businesses
($103 2008)
<500 Employees
Asphalt Hot Mix
500
1
$944
0.15%
Auto Body Refinishing
$7
10
$9.44
1.30%
Beef Cattle Complex, Slaughter House and
500
1
$18.47
0.24%
Meat Packing Plant




Chemical Preparation
1,000
1
$9.44
0.07%
Clay and Ceramics Operations (Kilns)
750
5
$9.44
0.55%
Concrete Batching Plant
500
1
$135.13
2.94%
Crude Petroleum and Natural Gas Extraction
500
1,557
$9.44
0.22%
Electric Power Generation
—
1
$9.44
0.04%
Fabricated Metal Products
500
1
$9.44
0.26%
Fabricated Structural Metal
500
1
$9.44
0.27%
Gasoline Station (Storage Tanks, Refueling)
$27
26
$9.99
0.51%
Grain Elevator
100
3
$69.36
NA
Machinery Manufacturing
500
3
$9.44
0.22%
Natural Gas Distribution
500
2
$9.44
0.04%
Oil and Gas Production/Operations
500
1
$9.44
0.22%
Other (Natural Gas-Fired Boilers)-Used
$30
28
$18.47
0.30%
Casino/Hotels




Printing Operations (Lithographic)
500
4
$11.64
0.63%
Professional, Scientific, and Technical
500
4
$18.47
0.60%
Services




Sand and Gravel Mining
500
2
$49.35
2.65%
Sand and Shot Blasting Operations
$14
4
$19.77
1.77%
Sawmills
500
2
$49.35
1.13%
Sewage Treatment Facilities
$7
1
$9.44
0.93%
Solid Waste Landfill
$12.5
1
$49.58
2.40%
Surface Coating Operations
500
8
$9.44
0.30%
Other (Costs Not Estimated)

62


Total

1,730


4-10

-------
Based on its analysis, EPA concludes that the rule is not expected to result in significant
economic impacts for a substantial number of small companies (no SISNOSE). This conclusion
is reached because the number of small companies affected in most industries is expected to be
small and because the costs for most industries are expected to be low. Small businesses
investing in new minor sources in six industries (auto body refinishers, concrete batching plants,
sand and gravel mining, sand and shot blasting, solid waste landfills, and sawmills) may incur
costs between 1% and 3% of their sales to comply with the rule. Because at most 20 small
companies may experience costs exceeding 1% of sales (when upper-bound costs are considered)
and no small company is projected to experience costs exceeding 3% of sales, and because the
upper-bound costs overestimate costs for most minor sources, EPA does not believe that a
substantial number of small companies will experience significant economic impacts.
4-11

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SECTION 5
REFERENCES
U.S. Census Bureau. 1996. Projected State Populations, by Sex, Race and Hispanic Origin,
1995-2025. http://www.census.gov/population/projections/state/stpjrace.txt.
U.S. Census Bureau. County Business Patterns, 2007. http://www.census.gov/econ/cbp/
index.html.
U.S. Census Bureau. Statistics of U.S. Businesses, 2002. http://www.census.gov/econ/susb/
introduction.html.
U.S. Department of Labor. Bureau of Labor Statistics (BLS). 2002. March 2002 Employment
Cost Trends, http://stats.bls.gov/news.release/ecec.t02.htm.
U.S. Department of Labor. Bureau of Labor Statistics (BLS). 2009. Producer Price Index.
http://www.bls.gov/ppi/.
U.S. Environmental Protection Agency (EPA). November 2006. Final Guidance for EPA
Rulewriters: Regulatory Flexibility Act as Amended by the Small Business Regulatory
Enforcement Fairness Act. http://www.epa.gov/sbrefa/documents/rfaguidancel 1-00-
06.pdf.
U.S. Environmental Protection Agency (EPA). 2001. EPA Air Pollution Control Cost Manual.
http://www.epa.gov/ttn/catc/products.html.
U. S. Environmental Protection Agency (EPA). 2011. Supporting Statement for the Review of
New Sources and Modifications in Indian Country Rule.
U.S. Small Business Administration. November 5, 2010. Table of Small Business Size Standards
Matched to North American Industry Classification Codes.
http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf.
R-l

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APPENDIX A:
METHOD FOR ESTIMATING EXISTING TRUE MINOR SOURCES AND
PROJECTING NEW TRUE MINOR SOURCES

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The figure below depicts a schematic presentation of the methods EPA used to first
estimate the number of existing minor sources in Indian Country and then to project the number
of new minor sources in Indian Country during the first 6 years following the effective date of
the rule. EPA's methods combined information from existing Tribal emissions inventories to
identify typical minor source types, then used Economic Census data to estimate the number of
such sources nationwide, and then allocated a share to Indian Country based on Census
demographic data. EPA then requested review from Tribal experts in EPA Regions and revised
the estimated number of existing sources of each type based on this feedback. Finally, EPA
projected the number of new minor sources during the first 6 years following the effective date
of the rule based on projected annual growth rates for the AIAN population. This process is
discussed in greater detail in Section 2.
A-l

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Methodology for Estimating Existing Minor Sources and Projecting New Minor Sources
Defines source types
Estimated number
of existing minor
sources in Indian
Country
2002 Statistics of
U.S. Business
(Census)
Total number of sources of
these types nationwide
Growth rate based on
Census AIAN population projections
or projections from EPA Regions
EPA Region experts either
accepted estimates,
provided additional data,
or provided alternative list
of existing sources
Review of
estimates by EPA
Region experts
Projected new
minor sources in
Indian Country
Final estimates of
existing minor
sources in Indian
Country
2000 Census
demographic
characteristics for
AIAN geographic
areas
22 Tribal
Emissions
Inventories
Use demographic data to
allocate share of sources
in Indian Country

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APPENDIX B:
ESTIMATED CONTROL COSTS FOR AFFECTED MAJOR AND MINOR SOURCES
IN INDIAN COUNTRY

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Table B-l. Estimated Control Costs for Affected Major and Minor Sources in Indian Country
Source Category
NAICS
Process Throughput
Capacity
Baseline Control
Technology
Baseline
Emissions
BACT
BACT
Emissions
BACT
Capital
Cost (2008
Dollars)
BACT Total
Annualized
Cost (2008
Dollars)
Animal Food
311119
3,650 tpy
No control
16.9 tpy PM
Fabric filter or
0.84 tpy PM
$32,188
$5,565
Manufacturing




cyclone



Asphalt Hot Mix
324121
100,000 tpy
Fabric filter
1.3 tpy PM
Same as baseline
1.3 tpy PM
$0
$0




0.2 tpy VOC

0.2 tpy VOC


Auto Body
81112

Filter technology,
3 tpy VOC
Same as baseline
3 tpy
$0
$0
Refinishing


ventilated spray








booth enclosures, use








of low-VOC








coatings, work








practices





Beef Cattle Complex,
3116
<10 MM
No control
6.7 tpy NOx 3.0
FGR or low NOx
3.5 tpy NOx
$37,435
$9,040
Slaughter House and

Btu/hr

tpy CO
burners
3.0 tpy CO


Meat Packing Plant








Casting Foundry
331511
16,606 tpy
Fabric filter, wet
4.6 tpy PM, .014
Baseline controls
4.6 tpy PM,
$2,448
$1,247
(Iron)


scrubber,
tpy S02, 11.19
plus binder
.014 tpy S02,





triethylamine (TEA)
tpy VOC
substitution and
4.5 tpy VOC





scrubber

carbon








adsorption



Chemical Preparation
3251
30,000 (tons/year)
Wet scrubber
1.2 tpy CO, 0.73
Same as baseline
1.2 tpy CO,
$0
$0




tpy NOx, 0.27

0.73 tpy






tpy PM, 1.27 tpy

NOx, 0.27






SOx, 0.37 tpy

tpy PM, 1.27






VOC

tpy SOx, 0.37








tpy VOC


(continued)

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Table B-l. Estimated Control Costs for Affected Major and Minor Sources in Indian Country (continued)
Source Category NAICS
Process
Throughput
Capacity
Baseline Control
Technology
Baseline
Emissions
BACT
BACT
Emissions
BACT
Capital
Cost (2008
Dollars)
BACT Total
Annualized
Cost (2008
Dollars)
Clay and Ceramics 32711
Operations (Kilns)
Concrete Batching 327320
Plant
Crude Petroleum and 2111
Natural Gas
Extraction
Electric Power
Generation
22111
NA
120,780 tpy
250 hp
4,000 MMBtu/hr
None
Bin vent filter
Fabricated Metal 3329
Products
Fabricated Structural 3323
Metal
NA
NA
No control
No control
None
7.3 tpy PM10,
14.6 tpy PM
None
Baseline controls
plus fabric filter
Best management
practices
Fabric filter, SCR,
sorbent injection, flue
gas desulfurization
(FGD)
4.8 tpy NOx, 9.7 Same as baseline
tpy CO, 3.4 tpy
VOC
179 tpy PM,
2,234 tpy CO,
968 tpy NOx,
1,191 tpy S02,
54 tpy VOC
NA
NA
Same as baseline
Comply with
equipment
standards
Comply with
equipment
standards, use low-
emitting and
pollution-
preventing spray
gun technology
None
5.1 tpy PM,
1.6	tpy PMio
4.8 tpy NOx,
9.7	tpy CO,
3.4 tpy VOC
179 tpy PM,
2,234 tpy
CO, 968 tpy
NOx, 1,191
tpy S02, 54
tpy VOC
2 tpy PM
2 tpy PM
NA
$143,000
$0
$0
$0
$125,700
$0
$0
NA
NA
NA
NA
(continued)

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Table B-l. Estimated Control Costs for Affected Major and Minor Sources in Indian Country (continued)
Source Category
NAICS
Process
Throughput
Capacity
Baseline Control
Technology
Baseline
Emissions
BACT
BACT
Emissions
BACT
Capital
Cost (2008
Dollars)
BACT Total
Annualized
Cost (2008
Dollars)
Fiber Glass
Operations
3279
25,000 tpy
Baghouse,
incinerator, and wet
scrubber
6.9 tpy PM, 68.8
NOx, 1.7 tpy CO
Same as baseline
6.9 tpy PM,
68.8 NOx,
1.7 tpy CO
$0
$0
Gasoline Bulk Plant
242710
6,500 gallons/day
Submerged loading
controls
18.5 tpy VOC
Vapor balancing
systems
1.9 tpy VOC
$38,426
$6,495
Gasoline Station
(Storage Tanks,
Refueling)
4471
1,200 gal/day
No control
2.2 tpy VOC
Stage I vapor
balance
0.1 tpy VOC
$2,288
$558
Grain Elevator
424510
10,000 tpy (4MM
Bu/yr)
Work practices
5 tpy PMjo
Baghouse
.05 tpy PM io
$166,310
$59,929
Machinery
Manufacturing
33311
Need more
information to
estimate costs (e.g.,
what type of
machinery?)






Millwork (Wood
Products Mfg)
32191
66,000 m3 per year
Wet electrostatic
precipitator (WESP)
13.1 tpy CO,
44.3 tpy VOC,
3.31 tpy NOx,
5.78 tpy PM
Regenerative
thermal oxidizer/
regenerative
catalytic oxidizer
(RTO/RCO)
1.91 tpy CO,
10.5 tpy
VOC
$138,096
$36,026
Oil and Natural Gas
Extraction (Major
Source^
2111
4000 hp
No control
557.3 tpy NOx
Nonselective
catalytic reduction
11.1 tpy NOx
$189,617
$29,029
(continued)

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Table B-l. Estimated Control Costs for Affected Major and Minor Sources in Indian Country (continued)
Source Category
NAICS
Process
Throughput
Capacity
Baseline Control
Technology
Baseline
Emissions
BACT
BACT
Emissions
BACT
Capital
Cost (2008
dollars)
BACT Total
Annualized
Cost (2008
dollars)
Oil and Gas
Production/
Operations (Minor
O&G)
2111
500
Best management
practices
4.8 tpy NOx, 9.7
tpy CO, 3.4 tpy
VOC
Same as baseline
4.8 tpy NOx,
9.7 tpy CO,
3.4 tpy VOC
$0
$0
Other (Natural Gas-
Fired Boilers)
921150
<10 MM
Btu/hr
No control
6.7 tpy NOx 3.0
tpy CO
FGR or low NOx
burners
3.5 tpy NOx
3.0 tpy CO
$37,435
$9,040
Pipeline
Transportation of
Natural Gas
486210
1,500 hp
Best management
practices
5.9 tpy NOx,
S02, 4.5 tpy
Same as baseline
5.9 tpy NOx,
S02, 4.5 tpy
$0
$0
Printing Operations
(Lithographic)
32311
48 tpy (ink use)
No control
6 tpy VOC
Add-on control
devices and
pollution
prevention
measures (low-
VOC inks and
cleaning solutions)
3.5 tpy VOC
NA
$2,201
Professional,
Scientific, and
Technical Services
54171
<10 MM
Btu/hr
No control
6.7 tpy NOx, 3.0
tpy CO
FGR or low NOx
burners
3.5 tpy NOx
3.0 tpy CO
$37,435
$9,040
Sand and Gravel
Mining
212321
140,000 tpy
No control
12.6 tpy PMio
Fugitive dust
suppression
controls
2.5 tpy PMio
$30,714
$39,917
Sand and Shot
Blasting Operations
238990
10 tpy
No control
0.13 tpy PMio
Fabric filter
0.007 tpy
PMio
$6,646
$10,338
Sawmills (Minor
Source)
321113
100,000 tpy logs
No control or low
efficiency cyclones
31 tpy PM
Fugitive dust
suppression
controls
1.5 tpy PM
$30,714
$39,917
(continued)

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Table B-l. Estimated Control Costs for Affected Major and Minor Sources in Indian Country (continued)
Source Category
NAICS
Process
Throughput
Capacity
Baseline Control
Technology
Baseline
Emissions
BACT
BACT
Emissions
BACT
Capital
Cost (2008
dollars)
BACT Total
Annualized
Cost (2008
dollars)
Sawmills (Major
Source)
321113
300,000 tpy logs
No control or low
efficiency cyclones
93 tpy PM
Fugitive dust
suppression
controls and fabric
filter
4.5 tpy PM
$176,222
$61,693
Sewage Treatment
Facilities
221320
NA
No control
NA
No control
NA
$0
$0
Softwood Veneer and
Plywood
Manufacturing
321212
66,000 m3 per year
WESP
13.1 tpy CO,
44.3 tpy VOC,
3.31 tpy NOx,
5.78 tpy PM
RTO/RCO
1.91 tpy CO,
10.5 tpy
VOC
$138,096
$36,026
Solid Waste Landfill
562212
<0.5 million tons
(capacity)
[3,000 tpy
loading](c3)
No control
25 tpy VOC
Gas collection
system and control
device
6.3 tpy VOC
$177,446
$40,148
Surface Coating
Operations
332812
General coating
operation (e.g., can
coating)
Filter technology,
ventilated spray
booth enclosures, use
of low-VOC
coatings, work
practices
3 tpy VOC
Same as baseline
3 tpy
$0
$0
Wood Kitchen
Cabinet
Manufacturing
337110
66,000 m3 per year
WESP
13.1 tpy CO,
44.3 tpy VOC,
3.31 tpy NOx,
5.78 tpy PM
RTO, RCO
1.91 tpy CO,
10.5 tpy
VOC
$138,096
$36,026

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United States	Office of Air Quality Planning and Standards	Publication No. EPA-452/R-11-002
Environmental Protection	Air Quality Strategies and Standards Division	January 2011
Agency	Research Triangle Park, NC

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