September 2011

Economic Impacts of Proposed 

NSPS for Nitric Acid

Draft Report

Prepared for

Larry Sorrels

U.S. Environmental Protection Agency

Office of Air Quality Planning and Standards (OAQPS)

Air Economics Group 

(MD-C439-02)

Research Triangle Park, NC 27711

Prepared by

Katherine Heller

Brooks Depro

Stephanie Norris

Tony Lentz

RTI International

3040 Cornwallis Road

Research Triangle Park, NC 27709

RTI Project Number 0209897.004.094
_________________________________

RTI International is a trade name of Research Triangle Institute.

RTI Project Number

0209897.004.094

Economic Impacts of Proposed 

NSPS for Nitric Acid

Draft Report

September 2011

Prepared for

Larry Sorrels

U.S. Environmental Protection Agency

Office of Air Quality Planning and Standards (OAQPS)

Air Economics Group

(MD-C439-02)

Research Triangle Park, NC 27711

Prepared by

Katherine Heller

Brooks Depro

Stephanie Norris

Tony Lentz 

RTI International

3040 Cornwallis Road

Research Triangle Park, NC 27709
iii

CONTENTS

Section Page

1 Background............................................................................................................... 1-1

2 Industry Profile ......................................................................................................... 2-1

2.1 Supply of Nitric Acid ....................................................................................... 2-1

2.1.1 Nitric Acid Production Process............................................................. 2-1

2.1.2 Product Types....................................................................................... 2-2

2.1.3 Materials and Costs of Production......................................................... 2-2

2.1.4 Nitric Acid and Materials Transportation .............................................. 2-3

2.2 Demand for Nitric Acid.................................................................................... 2-5

2.2.1 Nitric Acid Applications....................................................................... 2-5

2.2.2 Influential Factors................................................................................. 2-6

2.3 Market Characteristics...................................................................................... 2-7

2.3.1 Competition and Entry.......................................................................... 2-7

2.3.2 Concentration ....................................................................................... 2-9

2.3.3 Price-Responsiveness of Supply and Demand ..................................... 2-11

2.4 Market Trends................................................................................................ 2-11

2.4.1 Derived Demand for Nitric Acid ......................................................... 2-11

2.4.2 International Trade in the Sectors that Consume Nitric Acid ............... 2-12

2.4.3 Industry Trends and Projections for Sectors Using Nitric Acid as 

an Input............................................................................................... 2-13

2.4.4 Projected Production of Nitric Acid .................................................... 2-14

2.5 Overview of Businesses Potentially Affected by the Rule ............................... 2-15

2.5.1 Parent Companies............................................................................... 2-15

2.5.2 Parent Company Sales and Employment ............................................. 2-18

2.6 References for Section 2................................................................................. 2-20
iv

3 Engineering Cost analysis ......................................................................................... 3-1

3.1 Emission Limit of 0.5 lb NOX/ton..................................................................... 3-2

3.2 References for Section 4................................................................................... 4-8

4 Economic Impacts on New Sources in the Nitric Acid Industry................................. 4-1

4.1 Modeling Approach to Estimating the Impacts on the Market for Nitric 

Acid ................................................................................................................. 4-1

4.2 Possible Impacts on Market for Nitric Acid ...................................................... 4-4

4.3 Estimated Impacts on Markets for Products Using Nitric Acid as an Input........ 4-5

4.5 Impacts on Small Entities of the NSPS Review of Nitric Acid for NOX on 

New Sources .................................................................................................... 4-7

4.6 References for Section 4................................................................................... 4-8

5 Conclusions .............................................................................................................. 5-1

Appendix

A Industry Data and Projections for NAICS 32521 ............................................. A-1
v

LIST OF FIGURES

Number Page

4-1 2010 Market for Nitric Acid...................................................................................... 4-2

4-2 Market Supply of Nitric Acid, including New Source................................................ 4-2

4-3 Increased Demand for Nitric Acid at Baseline ........................................................... 4-3

4-4 Market for Nitric Acid, With Proposed NSPS ........................................................... 4-4
vi

LIST OF TABLES

Number Page

2-1 Cost Comparisons for Labor and Materials across Several NAICS Codes................. 2-4

2-2 Concentration Ratios for Sectors Using Nitric Acid as an Input, 2002..................... 2-10

2-3 Market Price-Elasticities of Supply and Demand..................................................... 2-11

2-4 Exports of Sectors that Consume Nitric Acid (FAS Value, 103 $2009) .................... 2-12

2-5 Imports for Consumption of Sectors that Consume Nitric Acid (Customs Value, 

103 $2009)............................................................................................................... 2-13

2-6 Projected Nitric Acid Production............................................................................. 2-14

2-7 Parent Companies with Facilities Potentially Covered Under the Rule .................... 2-16

2-8 Annual Revenue and Employment Data for Each of the Parent Companies............. 2-19

3-1 Normalized NOX Control Costs by Model Plant ........................................................ 3-1

3-2 NOX Control Costs for All New Production Trains in 2016 ....................................... 3-2

3-3 NOX Control Efficiencies.......................................................................................... 3-2

3-4 NOX Emission Reductions for All New Production Trains with SCR Control in 

2016.......................................................................................................................... 3-3

3-5 Incremental Costs in the Fifth Year after Promulgation for All New Production 

Trains........................................................................................................................ 3-3

3-6 Incremental Cost Effectiveness in the Fifth Year after Promulgation for All New 

Production Trains...................................................................................................... 3-4

4-1 Market Impacts of the Proposed Rule: Market for Nitric Acid ................................... 4-5

4-2 Estimated Impacts of Nitric Acid NSPS on Sectors Using Nitric Acid as an 

Input ......................................................................................................................... 4-6

4-3 Employment and Revenue of Existing Small Entities................................................ 4-8

4-4 Cost-to-Sales Ratios for Model Small Firms Owning New 300 tpd and 1,000 tpd 

Plants........................................................................................................................ 4-8
1-1

SECTION 1

BACKGROUND

New Source Performance Standards (NSPS), mandated under Section 111 of the Clean 

Air Act (CAA), are directly enforceable federal regulations issued for categories of sources that

cause, or contribute significantly to, air pollution that may reasonably be anticipated to endanger 

public health or welfare. Section 111 of the CAA requires that NSPS reflect the “degree of 

emissions limitation achievable through application of the best system of emission reduction 

which (taking into account the cost of achieving such reduction and any non-air quality health 

and environmental impact and energy requirements) the Administrator determines has been 

adequately demonstrated.” This level of control is commonly referred to as best demonstrated 

technology (BDT). By requiring BDT for new, modified, and reconstructed sources, the NSPS 

program seeks to attain and maintain ambient air quality as the industrial infrastructure is 

modernized. Since 1970, the NSPS have been successful in achieving long-term emissions 

reductions in numerous industries by ensuring that cost-effective controls are installed on such

sources.

The Environmental Protection Agency (EPA) is required by Section 111(b)(1)(B) of the 

CAA to review and, if appropriate, revise existing NSPS at least every 8 years. The purpose of 

an NSPS review is to determine if the standards reflect BDT. The nitric acid NSPS (part 60, 

subpart G) has been reviewed in the past, but the last review was more than 8 years ago. As a 

result of this, EPA has received a citizen suit from Sierra Club and Environmental Integrity 

Project prompting a review of the standards.

Section 111(b)(1)(B) of the CAA requires EPA to periodically review and revise the 

standards of performance, as necessary, to reflect improvements in methods for reducing 

emissions. EPA is currently reviewing the nitric acid manufacturing NSPS and has noted that 

improvements in technology allow emissions to be better controlled than the current NSPS 

requires. In light of this review, EPA is proposing revisions to the current NSPS. These revisions 

would include tightening the current nitrogen oxides (NOx) limit set back in 1971 for plants that 

manufacture nitric acid.

Following legislative and administrative requirements, EPA conducts economic analyses 

of its regulatory actions. EPA’s Air Economics Group is responsible for conducting such 

economic analyses in support of residual risk and national emission standards for hazardous air 
1-2

pollutants (NESHAP), NSPS, and national ambient air quality standards (NAAQS) for criteria 

pollutants. 

This economic impact analysis (EIA) contains four other sections. Section 2 is a profile 

of the nitric acid manufacturing industry. It provides the reader with a basic understanding of the 

structure of the nitric acid production process, and characterizes nitric acid suppliers and 

demanders. Section 3 describes the estimated costs that the nitric acid industry would incur with 

the promulgation of the revised regulations for the industry. Section 4 analyzes the impacts of 

these costs on the industry, including potential impacts on small businesses owning nitric acid 

production facilities. Section 5 provides conclusions.
2-1

SECTION 2

INDUSTRY PROFILE

EPA has developed this industry profile to provide the reader with a general 

understanding of the technical and economic aspects of the nitric acid industry. We begin by 

examining the supply of nitric acid by discussing the nitric acid production process and the 

associated costs. We then examine the demand for nitric acid and the end products for which it 

serves as an intermediate. We then address the characteristics that define the nitric acid market 

and profile the companies owning nitric acid production facilities. 

2.1 Supply of Nitric Acid

Nitric acid is an inorganic chemical with a variety of productive applications, including 

nitrogen-based fertilizers, explosives, and many specialty chemicals including polyurethane 

intermediates, dyes, and pharmaceuticals (Dow, 2008). Although there is a small direct market 

for nitric acid, many producers share the role of supplier and consumer by using nitric acid 

internally as an input to final market goods. 

2.1.1 Nitric Acid Production Process

Nitric acid is produced through chemical reactions in two main phases: oxidation and 

absorption. Specifically, it is produced through a series of chemical reactions stemming from the 

oxidation of ammonia with air over an alloy catalyst (EFMA, 2000). In the oxidation phase, 

ammonia (NH3) is oxidized at a high temperature over the catalyst, which is usually a platinumalloy gauze-like structure, into nitric oxide (NO) (EFMA, 2000). As the gases cool, the nitric 

oxide is oxidized into nitrogen dioxide (N2O) (EFMA, 2000). Nitrous oxide, water, and nitrogen

are also formed in secondary reactions during this phase (EFMA, 2000). In the absorption phase, 

the nitrogen dioxide (N2O) reacts with water to form nitric acid (HNO3):

4NH3 + 5O2 à 4 NO + 6H2O

2NO + O2 à 2NO2

3NO2 + H2O à 2HNO3 + NO

In addition to the composition and efficiency of the platinum-alloy catalyst, the pressure 

and temperature in the oxidation environment can influence the yield of nitric oxide recovered 

from the catalytic reaction (EFMA, 2000). The first reaction of ammonia into nitric oxide is 

more efficient at a high temperature and low pressure, whereas the reaction of nitric oxide to 
2-2

nitrogen dioxide and the oxidation to nitric acid are more conducive to low temperatures and 

high pressure (EFMA, 2000). Production plants may be designed as dual-pressure or singlepressure plants. Dual-pressure plants separate the oxidation and absorption phases and use lower 

pressure for oxidation than absorption; single-pressure plants use the same degree of pressure 

throughout production (EFMA, 2000). 

2.1.2 Product Types

Nitric acid is a water-soluble liquid that can range in color from clear to yellow and has a 

pungent acidic odor (Dow, 2008). Most of the chemical is used as weak, or industrial-grade, 

nitric acid and tends to range from a 50% to 70% concentration of nitric acid in water (Dow, 

2008). Fuming or concentrated nitric acid ranges from 85% to 100% in concentration (Dow, 

2008). 

2.1.3 Materials and Costs of Production

Ammonia is the chief raw material required for nitric acid production, and many nitric 

acid producers also manufacture their own ammonia supplies to vertically integrate production. 

Although some producers fuel ammonia production with coal, the majority of world ammonia 

production is based on natural gas (PotashCorp, 2010). As an example, one affected fertilizer 

company, CF Industries, notes that natural gas purchases represented over 50% of total 2009 cost 

of sales in the nitrogen production segment (CF Industries, 2010). Securing an affordable fuel 

supply in a volatile natural gas market is pivotal for a company’s competitiveness and 

sustainability in the industry (PotashCorp, 2010). One affected entity, Coffeyville Resources, is 

the only nitrogen plant in the United States to use lower cost petroleum coke instead of natural 

gas (CVR, 2009). Because of the unpredictable nature of natural gas prices, some other smaller 

facilities are also looking into alternative fuel options (REMC, 2010). 

Since the shift toward deregulation in the natural gas market in the 1980s, natural gas 

prices have played an increasingly significant role in ammonia production. In the period 

immediately following deregulation (1985 to 1999), natural gas prices remained relatively stable 

(Huang, 2007a). There was little correlation between natural gas prices and ammonia prices until 

2000, when natural gas prices began to fluctuate erratically. Between 2000 and 2006, the 

correlation between natural gas and ammonia prices was 0.8 (Huang, 2007a). Further analysis 

suggests that the long-run price elasticity of ammonia with respect to natural gas is 0.79 (Huang, 

2007b). 

Ammonia producers use a variety of purchasing options to manage the inherent volatility 

of natural gas prices. Since natural gas is traded as a commodity, companies can buy natural gas 
2-3

at real-time spot prices or under contract in the futures market (NGSA, 2004). In contrast to the 

immediate purchase of natural gas at its daily spot price, buying into a future contract involves 

an agreement between buyer and seller on a physical transaction at a later date (NGSA, 2004). 

Natural gas is traded in the United States at market hubs around the country, the largest of which 

is Henry Hub in Louisiana (NGSA, 2004). Roughly 30 hubs are strategically located at major 

natural gas pipeline intersections (NGSA, 2004).1 The natural gas futures prices that are used for 

futures trading on the New York Mercantile Exchange (NYMEX) are the Henry Hub contract 

prices and illustrate the price of the physical delivery of natural gas from this hub (NGSA, 2004). 

The “location differential” is the variation between prices at Henry Hub and another market hub, 

which arises from different supply and demand dynamics between the different hubs (NGSA, 

2004). Heavy users of natural gas, including ammonia producers, benefit from building facilities 

close to these market hubs.

Table 2-1 illustrates the cost comparisons for labor and materials across the North 

American Industry Classification System (NAICS) codes in which the affected entities are 

classified. Both nitric acid production and the production activities of facilities and firms that use 

nitric acid as an input are classified within NAICS 325, Chemical Manufacturing. Most nitric 

acid is used in making ammonium nitrate (AN), the majority of which is used in nitrogenous 

fertilizer production, NAICS 325311. Other consumers of nitric acid fall within NAICS 325211, 

325510, and 325920. In all of these NAICS industries, the cost of materials, including nitric acid, 

represents approximately half of the value of shipments in a typical year. The cost of materials is 

typically several times higher than the payroll costs (or cost of labor) for these affected 

industries. 

An additional capital cost to consider in nitric acid production is that of the catalyst used 

in ammonia oxidation, which is typically made primarily with platinum and supplemented with 

other metals (EFMA, 2000). Catalyst costs could thereby be influenced by variation in metals 

supply and pricing. 

2.1.4 Nitric Acid and Materials Transportation

Since the majority of nitric acid is consumed in the facility or complex in which it is 

produced, transporting the product is not of paramount concern. However, some companies do 

sell nitric acid to industrial customers or potentially need to transfer between facilities, so the

 

1

For a map of the major market hubs and pipeline distribution network, see 

http://www.eia.doe.gov/pub/oil_gas/natural_gas/analysis_publications/ngpipeline/MarketCenterHubsMap.html.
2-4

Table 2-1. Cost Comparisons for Labor and Materials across Several NAICS Codes

Geographic 

Area Name

NAICSBased 

Code

Meaning of NAICSBased Code YearNumber of 

Employees

Annual 

Payroll 

($1,000)

Production 

Workers 

Average 

per Year

Total Cost 

of 

Materials 

($1,000)

Materials, 

Parts, 

Containers, 

Packaging, etc. 

Used ($1,000)

Cost of 

Purchased 

Fuels 

($1,000)

Cost of 

Purchased 

Electricity 

($1,000)

Total 

Value of 

Shipments 

($1,000)

United States 325 Chemical manufacturing 2008 780,127 50,766,204 448,790 396,684,686 322,593,772 17,055,845 9,898,041 751,029,562

United States 325 Chemical manufacturing 2007 803,904 50,643,442 465,557 362,244,062 297,388,193 14,368,287 8,908,756 724,080,627

United States 325211 Plastics material and 

resin manufacturing

2008 67,410 4,261,853 44,809 60,505,056 55,097,538 2,141,353 1,840,588 83,802,525

United States 325211 Plastics material and 

resin manufacturing

2007 70,514 4,360,808 47,312 57,459,312 52,197,817 2,000,583 1,637,878 85,069,731

United States 325311 Nitrogenous fertilizer 

manufacturing

2008 3,818 275,321 2,481 4,456,195 3,539,303 575,847 191,581 8,272,625

United States 325311 Nitrogenous fertilizer 

manufacturing

2007 3,997 269,249 2,709 3,465,718 2,724,769 455,402 193,225 6,157,614

United States 325510 Paint and coating 

manufacturing

2008 40,407 2,108,485 22,924 11,556,743 10,527,160 68,649 108,754 22,418,425

United States 325510 Paint and coating 

manufacturing

2007 42,021 2,193,104 23,876 12,177,643 11,090,399 70,723 110,149 23,636,807

United States 325920 Explosives 

manufacturing

2008 6,042 312,208 4,183 958,319 828,569 19,829 13,168 1,934,663

United States 325920 Explosives 

manufacturing

2007 6,532 321,152 4,348 857,000 728,615 16,530 12,316 1,745,029

Source: U.S. Census Bureau. 2010. American Fact Finder. Sector 31: Annual Survey of Manufactures: General Statistics: Statistics for Industry Groups and 

Industries: 2008 and 2007. http://factfinder.census.gov. Accessed April 20, 2010.
2-5

costs and dangers of moving the hazardous chemical can play a role in the supply side of the 

market. Nitric acid can be shipped via tanker truck, rail, and, in fewer cases, barge.

More important than nitric acid transportation may be the transportation costs associated 

with the final products. Ammonium nitrate, the primary end product of nitric acid, can be 

particularly dangerous if not handled carefully. Suppliers are responsible for taking all necessary 

precautions to avoid mishaps and for complying with federal regulations for shipping hazardous 

materials.

2.2 Demand for Nitric Acid

Although some nitric acid is sold to outside customers, the majority of nitric acid is used 

by its producers in the vertically integrated production of a wide range of chemical products. 

Roughly 90% of nitric acid is manufactured for on-site consumption within the facility, so the 

retail nitric acid market represents only 10% of total nitric acid production (ICIS, 2008a). 

Because it is an intermediate good, the demand for nitric acid is largely contingent on the 

demand for the end products for which it serves as an input. The total U.S. nitric acid demand in 

2007 was 8.9 million tons, and this was projected to grow to 10.1 million tons in 2011 (ICIS, 

2008a). 

2.2.1 Nitric Acid Applications

Ammonium nitrate production represents the largest demand market for nitric acid, 

accounting for roughly 76% of total U.S. demand in 2007 (ICIS 2008a). About 9% of nitric acid 

demand is for adipic acid, which is used for nylon 6,6 polymers and resins, polyester polyols for 

polyurethane resins, and other related fibers and resins (ICIS, 2007). Toluene di-isocyanate 

(TDI) and nitrobenzene each account for 6% of nitric acid demand, with the remaining 3% going 

toward metal nitrate and other miscellaneous applications.

Of ammonium nitrate produced from nitric acid, the majority (86%) is used in the 

nitrogen-based fertilizer industry, either as a direct fertilizer or in the production of alloyfertilizer blends like urea ammonium nitrate (UAN) (ICIS, 2008a). The balance of the 

ammonium nitrate derived from nitric acid is used mainly for manufacturing explosives. 

Because the majority of nitric acid is consumed by ammonium nitrate producers, the 

demand for ammonium nitrate products, especially fertilizer, is the main driver of nitric acid 

demand. The dominance of ammonium nitrate demand is also reflected in the production and 

sales for the companies affected by the rule, so the market discussion in this profile is focused on

the fertilizer industry and, to a lesser extent, ammonium nitrate-based explosives. 
2-6

2.2.2 Influential Factors

Fertilizer

As noted in the previous section, the nitric acid market is driven chiefly by the demands 

of the fertilizer industry. In the United States, the agricultural industry consumes 80% of the 

country’s fertilizer demand (Richardson, 2010a). Within the agricultural demand side, corn 

production is the largest nitrogenous fertilizer consumer, followed by wheat, soybeans, and 

cotton (Richardson, 2010). Nurseries, golf courses, and landscaping projects are small-scale 

fertilizer consumers (Richardson, 2010a). 

The U.S. farm economy and income within the sector is the main force behind fertilizer 

demand. Unpredictable weather conditions are probably the most important determinant in 

fertilizer needs. In poor weather seasons, fertilizer demand declines as farmers reduce or 

abandon crop fields and pastures (Richardson, 2010a). Demand is also seasonal and increases 

during planting season. Global food demand also plays a role in determining the crop needs and 

thus contributes to fertilizer needs. Food security is a concern for policy makers as the global 

population increases, and the demand for fertilizer may increase in the coming years (IFA, 

2009). 

Explosives

Because industrial explosives are mainly used in the mining and mineral industries, the 

demand for coal and basic metals drives the demand for these products (IBISWorld, 2009). Coal 

mining is the main use for industrial explosives in the United States, accounting for around twothirds of explosives consumption. Stone quarrying and construction are also industries that 

consume the blasting agents and oxidizers provided by the industry (IBISWorld, 2009). One key 

factor in maintaining the level of demand for explosive products is the relative affordability of 

coal as a fuel source compared to its alternatives (IBISWorld, 2009). 

Chemicals and Resins

Adipic acid and TDI are the other main chemical products in which nitric acid is used, 

both of which have a wide variety of applications and tend to follow gross domestic product 

(GDP) trends in terms of demand. Nylon 6,6 fibers and resins represent 84% of adipic acid 

demand (ICIS, 2007). Although historically, nylon 6,6 has been used mainly in industrial 

carpeting, the demand for nylon 6,6 resins has been driven by automobile and truck parts as the 

industry has trended toward replacing metal parts with plastic. It is often used for exterior body 

pieces, internal components under the hood, and various mechanical parts (ICIS, 2007). The 
2-7

demand for automobiles and the growing acceptance of nylon as a viable replacement for metal 

is likely to influence market conditions.

TDI is used mainly in the production of flexible urethane foams, which are used across 

several industries. Transportation, furniture, carpet underlay, bedding, packaging, and other 

miscellaneous applications of the flexible foams make up 88% of total TDI consumption in the 

United States (ICIS, 2008b). The remaining demand for TDI is used in the production of rigid 

urethane forms and polyurethane products like adhesives, sealants, coatings, and elastomers 

(ICIS, 2008b). Demand for these products is expected to grow in the future (ICIS, 2008b).

2.3 Market Characteristics

A review and description of market characteristics (i.e., geography, product 

differentiation, product transportation, entry barriers, and degree of concentration) can enhance 

our understanding of the mechanisms underlying the market for nitric acid and its end products. 

These characteristics provide indicators of a firm’s ability to influence market prices by varying 

the quantity of product it sells. For example, in markets with large numbers of sellers and 

identical products, firms are unlikely to be able to influence market prices via their production 

decisions (i.e., they are “price takers”). However, in markets with few firms, significant barriers 

to entry (e.g., licenses, legal restrictions, or high fixed costs), or products that are similar but can 

be differentiated, a firm may have some degree of market power (i.e., to set or significantly 

influence market prices). In addition, if a product is difficult to transport over long distances 

(because of weight or its hazardous nature), then the market size may be more restricted than one 

might expect, ceteris paribus. 

Nitric acid producers are mainly involved in the supplying nitrogenous fertilizer, 

industrial explosives, and specialty chemicals and resins. Each of these markets has a set of 

distinct characteristics and is discussed individually below.

2.3.1 Competition and Entry

Fertilizer

The environments in which the targeted companies participate are extremely competitive, 

driven mainly by the firms’ ability to control production costs rather than differentiate their 

products. This is especially true in the fertilizer industry where companies have individual 

fertilizer solution formulas, but the basic chemical properties are consistent. Firms with larger 

production facilities have the advantage of using economies of scale to become low-cost 

suppliers relative to their competitors (Richardson, 2010a). Comprehensive vertical integration 
2-8

of the entire production process is another tool that larger firms, like Agrium, use to control costs 

(Richardson, 2010a). 

Because fertilizer is generally treated as a commodity, prices are determined at a global 

level (Richardson, 2010a). Agrium, Koch, and CF Industries are among the dominant domestic 

forces in the fertilizer market, but in 2006, more than 60% of nitrogen-based fertilizer consumed 

in the United States was purchased internationally (Richardson, 2010a). Not only do U.S. 

companies face steep domestic competition, they also must compete with foreign companies that

might face lower fuel prices and production costs. With many firms vying for a global consumer 

base and selling nearly identical products, the nitrogenous fertilizer industry provides individual 

companies with very little market power. 

In addition to the fierce market competition, other significant barriers to entry into the 

fertilizer industry exist. Initial capital expenses to purchase fertilizer manufacturing equipment 

can be very high; building a nitrogenous fertilizer plant with a 1 million metric ton capacity can 

cost between $700 million and $1 billion and can take several years to construct (Richardson, 

2010a). Maintaining ammonia and natural gas inputs is also costly and prevents easy entry into 

the market. Because the industry is dominated by a few global firms, nascent companies also 

must compete with established product identification and brand names (Richardson, 2010a).

Explosives

As in the fertilizer industry, explosives products are essentially similar in their basic 

structure and content. Competition in this industry is based more on price than product 

differentiation (IBISWorld, 2009). However, recent years have seen an increase in the role of 

customer service and specializing explosives for customers as a means of competition 

(IBISWorld, 2009). Firms are gradually shifting away from providing basic commodity 

explosives and more toward becoming comprehensive demolition and blast solution providers 

(IBISWorld, 2009). Entry into the market is difficult because the market in the United States is 

dominated by two major companies with name recognition and ongoing customer relationships. 

The technical requirements, capital costs, and pricey raw materials essential to success in the 

industry also prohibit new companies from gaining market share (IBISWorld, 2009).

Chemicals and Resins

Because of the wide range of chemical products derived from nitric acid, the network of 

markets in which they are sold is extensive. Compared to fertilizer and explosives, there is also a 

greater degree of product differentiation between products like coatings and adhesives, so the 

market as a whole is likely to be less competitive than that of nitrogenous fertilizers. 
2-9

2.3.2 Concentration

Table 2-2 provides information about the concentration of sectors using nitric acid as an 

input. The most recent industry concentration data compiled by the Census Bureau (U.S. Census 

Bureau, 2006) are based on Economic Census data from 2002. Thus, the data reflect conditions 

in these sectors in 2002. As noted in the sector-specific sections below, many of these sectors 

have recently become increasingly concentrated. 

Table 2-2 shows the total number of companies in each sector potentially affected by the 

rule and the total value of shipments for all companies in the sector. Next, it shows the 

percentage of sector value of shipments for the largest 4, 8, 20, and 50 companies. Finally, it 

provides the Herfindahl-Herschman Index (HHI) for the sectors. The HHI is a commonly 

accepted measure of market concentration. It is calculated by squaring the market share of each 

firm competing in the market and then summing the resulting numbers. The HHI takes into 

account the relative size and distribution of the firms in a market and approaches zero when a 

market consists of a large number of firms of relatively equal size. The HHI increases both as the 

number of firms in the market decreases and as the disparity in size between those firms 

increases. Markets in which the HHI is between 1,000 and 1,800 points are considered to be 

moderately concentrated, and those in which the HHI is in excess of 1,800 points are considered 

to be concentrated. Two of the sectors in Table 2-2, nitrogenous fertilizer manufacturing and 

explosives manufacturing, had HHI values between 900 and 1,000 (approaching moderate 

concentration values) in 2002.

Fertilizer

Although many entities operate in the fertilizer and ammonia products industries, the 

market is dominated by the larger firms that can secure low-cost raw materials and gain market 

share by pricing below their competitors. Four major firms have over 50% of the entire global 

fertilizer market share (Richardson, 2010a). Recently, there has been even more of a trend 

toward increased concentration. Agrium submitted a $5.43 billion takeover bid for CF Industries 

but let the offer expire in early 2010 after CF Industries refused to engage in discussions 

(Agrium, 2010; Katz, 2010). CF Industries in turn acquired competitor Terra Industries in March 

2010 after a bitter yearlong battle (Katz, 2010). With this move, CF Industries became one of the 

world’s largest fertilizer producers and increased its customer diversity by acquiring Terra’s 

industrial customers (CF Industries, 2010). 
2-10

Table 2-2. Concentration Ratios for Sectors Using Nitric Acid as an Input, 2002

NAICS 

Code Industry Description

Total 

Companies

Total Value of 

Shipments 

($1000), 2002

Percentage, 

4 Largest 

Companies

Percentage, 

8 Largest 

Companies

Percentage, 

20 Largest 

Companies

Percentage, 

50 Largest 

Companies HHI

325 Chemical manufacturing 9,659 462,438,453 13.7 21.8 36.8 54.3 99.9

325211 Plastics material and resin manufacturing 445 46,846,851 32.4 45.8 67.9 87.8 442.5

325311 Nitrogenous fertilizer manufacturing 116 3,291,075 53.9 78.8 94.6 98.2 976.9

325510 Paint and coating manufacturing 1,149 19,917,828 37.3 54.5 69.9 78.6 505.0

325920 Explosives manufacturing 57 1,027,797 54.2 77.8 93.4 99.9 991.3

Source: http://www.census.gov/prod/ec02/ec0231sr1.pdf
2-11

Explosives

The explosives manufacturing industry is highly concentrated around the two largest 

manufacturers in the United States: Orica and Dyno Nobel (IBISWorld, 2009). These two 

companies maintained 30% and 40% of the market share, respectively, through 2009 

(IBISWorld, 2009). In recent years, the industry has witnessed further concentration as 

companies have engaged in acquisitions to reinforce their market positions (IBISWorld, 2009). 

Between 1998 and 2005, the number of active companies in the industry declined by 16%

(IBISWorld, 2009). 

Chemicals and Resins

Multiple markets sell nitric acid–based products, each with its own dynamics. For 

example, the market for adipic acid in the United States seems to be concentrated around 

INVISTA (owned by Koch) and Solutia (ICIS, 2007). Because of the diversity in adipic acid and 

TDI end products, there is less concentration of market power relative to the other two industries. 

2.3.3 Price-Responsiveness of Supply and Demand

EPA used elasticities of demand and supply estimated for use in its Multi-Market Model 

to characterize the responsiveness of supply and demand to changes in price, in each affected 

market. These elasticities are shown in Table 2-3.

Table 2-3. Market Price-Elasticities of Supply and Demand

Sector NAICS Supply Demand

Nitrogenous fertilizer 3253 0.7 - 1.0

Other chemicals (nitric acid) 3259 0.6 - 1.0

Plastics 3252 0.7 - 1.0

Explosives 3259 0.6 - 1.0

2.4 Market Trends

This section provides an overview of conditions in the sectors that consume nitric acid as 

an input. The projected trends for these sectors will affect future demand for nitric acid.

2.4.1 Derived Demand for Nitric Acid

Nitric acid is an intermediate good that is used in the production of fertilizers, explosives, 

plastics and resins, and paints and coatings, among other products. Because it is an intermediate 
2-12

good, nitric acid is valued because it is needed to produce those products; thus, the demand for 

nitric acid is driven by the demand for the products it is used to produce. These, in turn, are 

generally intermediate goods, whose demand depends on the demand for the final products they 

are used to produce. For example, demand for fertilizers depends on the demand for agricultural 

products, the supply of other inputs to agriculture, and the ability to substitute fertilizer for other 

inputs. Similarly, nitrate-based explosives are used in mining (especially coal mining) and 

construction. The demand for explosives thus depends on the demand for coal and other minerals 

and the demand for new buildings and infrastructure.

2.4.2 International Trade in the Sectors that Consume Nitric Acid

Table 2-4 presents historical data on exports for the four sectors that dominate demand 

for nitric acid. Export values were converted from current-year dollars to 2009 dollars using the 

GDP deflator. Each of the sectors grew during the period 2005 through 2007. Beginning in 2008, 

several of the sectors’ exports contracted, and all of them fell from 2008 to 2009, reflecting the 

contraction of the world economy.

Table 2-4. Exports of Sectors that Consume Nitric Acid (FAS Value, 103$2009)

Sector 2005 2006 2007 2008 2009

Percentage 

Change,

2008–2009

325211 Plastics and Resins 20,719,115 23,153,733 26,189,230 27,796,054 21,891,848 -21.2

325311 Fertilizer Mfg 1,900,234 2,080,653 2,126,120 2,087,632 1,820,042 -12.8

325510 Paint and Coating 460,977 520,502 543,554 535,996 487,616 -9.0

325920 Explosives Mfg 3,214,101 3,140,175 3,482,423 693,429 444,080 -36.0

Total 26,294,427 28,895,064 32,341,327 31,113,109 24,643,585 -20.8

Source: http://dataweb.usitc.gov/.

Table 2-5 presents historical data on these sectors’ imports for consumption into the 

United States. In each sector, imports generally display an upward trend through 2007; imports 

of fertilizers, the major user of nitric acid, increased through 2008. In 2008, and even more in 

2009, the imports of these commodities declined, reflecting the contraction of the U.S. economy.
2-13

Table 2-5. Imports for Consumption of Sectors that Consume Nitric Acid (Customs 

Value, 103$2009)

Sector 2005 2006 2007 2008 2009

Percentage 

Change,

2008–2009

325211 Plastics and 

Resins

10,964,777 11,452,755 10,735,086 11,040,286 7,281,554 -34.0

325311 Fertilizer Mfg 4,829,611 4,348,070 5,739,289 8,120,624 3,264,581 -59.8

325510 Paint and 

Coating

796,634 898,904 923,868 850,706 589,295 -30.7

325920 Explosives Mfg 303,669 366,150 378,236 355,657 306,703 -13.8

Total 16,894,691 17,065,878 17,776,479 20,367,273 11,442,132 -43.8

Source: http://dataweb.usitc.gov/.

2.4.3 Industry Trends and Projections for Sectors Using Nitric Acid as an Input

Appendix A presents industry data and projections for four of the sectors that demand 

nitric acid as an input: 32521, Plastics and Resins Manufacturing; 32531, Fertilizer 

Manufacturing; 32551, Paint Manufacturing; and 32592, Explosives Manufacturing, compiled by 

industry analysts IBISWorld (IBISWorld, 2009, 2010a and 2010b, and Richardson, 2010b).

NAICS 32521, Plastics and Resins Manufacturing, is closely tied to the automobile 

manufacturing and housing industries. During the period 2005 to 2010, these industries 

experienced volatility that was reflected in their demand for plastics (and thus, nitric acid). 

Nevertheless, IBISWorld (2010b) projects growth in revenue of approximately 3% per year for 

the period 2010 to 2015.

NAICS 32531, Fertilizer Manufacturing, depends largely on crop production decisions 

and fertilizer prices. In the short run, IBISWorld (2010a) notes that demand levels are influenced 

by grain prices, weather patterns, world economic conditions, and international trade variables. 

In the longer term, population growth, living standards, and food consumption patterns also 

influence demand. IBISWorld notes that inputs, specifically nitrogen and potash, are sourced 

internationally (60% of nitrogen and 88% of potash for fertilizer production are supplied by 

imports), so the strength of the U.S. dollar affects costs. In addition, approximately 30% of 

domestic demand for fertilizer is met by imports. Although domestic and international economic 

conditions resulted in a reduction in output and revenue in 2009, both are expected to increase 

from 2010 through 2015.
2-14

Demand for the coatings and paints covered under NAICS 32551, Paint Manufacturing, 

is contingent on the demand for downstream products in the housing and automobile industries. 

Domestic demand dropped in 2008 and 2009 because of the downturn in the housing market and 

declines in automobile sales but is expected to increase in 2010 and continue to grow through 

2015 (Richardson, 2010b).

NAICS 32592, Explosives Manufacturing, is projected to experience moderate growth. 

Demand for blasting agents (99% of explosives) is driven by demand levels for energy and 

minerals. Coal mining accounted for 66% of product consumption in 2007. Overall, IBISWorld 

(2009) projects continued moderate growth (about 3% per year) over the 2010 to 2015 period.

2.4.4 Projected Production of Nitric Acid

To estimate the number of new sources that might be affected by the proposed rule, EPA 

projected production of nitric acid through 2016. Nitric acid production was estimated for 2006 

(TSD for Greenhouse Gas Reporting Rule), using the production growth of 6.5% from 2006 to 

2007 (ICIS). For the period 2007 through 2016, EPA used a predicted production growth rate of 

3% for 2007 through 2016 (ICIS). These estimates are shown in Table 2-6. In the period from 

2010 to 2016, the growth was approximately 1.6 million tons of nitric acid. 

Table 2-6. Projected Nitric Acid Production

Year

Nitric Acid Produced

Metric tons Tons Increase (tons)

2006 6,446,767 7,107,560 461,991

2007 6,865,806 7,569,552 227,087

2008 7,071,781 7,796,638 233,899

2009 7,283,934 8,030,537 240,916

2010 7,502,452 8,271,453 248,144

2011 7,727,526 8,519,597 255,588

2012 7,959,351 8,775,185 263,256

2013 8,198,132 9,038,441 271,153

2014 8,444,076 9,309,594 279,288

2015 8,697,398 9,588,882 287,666

2016 8,958,320 9,876,548 —

2010–2016 1,605,095
2-15

2.5 Overview of Businesses Potentially Affected by the Rule

The proposed regulation may affect up to 40 nitric acid facilities owned by 18 different 

parent companies. Table 2-7 lists the parent companies with facilities potentially covered under 

the rule and summarizes the nitric acid products that may be affected by the rule. In addition to 

producing nitric acid, the affected facilities and firms produce a variety of products using nitric 

acid.

To give the reader a better understanding of the specific characteristics that define each of 

the potentially affected entities, the following section gives a brief overview of each parent 

company. 

2.5.1 Parent Companies 

Agrium (3 facilities)

Agrium produces and markets a range of potash-, phosphate-, and nitrogen-based 

fertilizer products. In addition to the seven major nitrogen facilities worldwide, Agrium also 

operates five facilities in North America that upgrade ammonia to fertilizer products, including 

urea, nitric acid, and ammonium nitrate. Agrium’s output serves a customer base that is roughly 

75% agricultural and 25% industrial.

Air Products and Chemicals (1 facility)

Air Products and Chemicals produces an extensive range of chemical products, including 

gases, equipment, and performance materials for a variety of industries. At its Pasadena, Texas,

facility, Air Products and Chemicals uses nitric acid to produce dinitrotoluene (DNT), which is 

converted to toluene diamine and sold to industrial customers as an intermediate for 

polyurethane products.

Apache Nitrogen (1 facility)

Apache Nitrogen is a small firm producing nitric acid and ammonium nitrate–based 

products for agricultural, mining, and industrial customers. 

CF Industries (4 facilities)

After the acquisition of Terra Industries in 2010, CF Industries became one of the largest 

fertilizer companies in the world. CF produces nitrogen fertilizers, phosphate products, and 

custom fertilizer solutions. The company manufactures 900,000 tons of nitric acid annually,

mainly for internal ammonium nitrate production. 
2-16

Table 2-7. Parent Companies with Facilities Potentially Covered Under the Rule 

Parent Company

Number of 

Affected 

Facilities

Small 

Business 

Sells Nitric 

Acid as an 

End Product

Nitrogenous 

Fertilizer 

(Uses Nitric 

Acid as 

Intermediate)

Ammonia 

(Industrial 

Grade, for 

Market, for 

Internal Use)

Explosives 

(Uses Nitric 

Acid as 

Intermediate)

Polyurethane 

Intermediates, 

Polymers, 

Nylon Fibers, 

Coatings, 

Resins, and 

Other 

Agrium 3 No x

Air Products and Chemicals, Inc. 1 No x

Apache Nitrogen 1 Yes x x x x

CF Industries 4 No x x x

Incitec Pivot Ltd. 1 No x x x x

CVR Energy 1 No x x

DuPont 1 No x

LSB Industries 2 No x

J.R. Simplot 1 No x x

Koch Industries 3 No x x x

Potash Corp. 2 No x

Rentech, Inc. 1 Yes x x x

Solutia Inc. 1 No x

TradeMark Nitrogen 1 Yes x

Total 23
2-17

CVR Energy (1 facility: Coffeyville Resources)

CVR Energy produces nitrogen-based fertilizers at its Coffeyville Resources facility. 

Instead of natural gas, the facility uses petroleum coke from its adjacent petroleum refining plant 

to produce ammonia products. 

DuPont (1 facility)

DuPont is another well-known chemical conglomerate with operations worldwide. At its 

U.S. facilities affected by the rule, DuPont manufactures a variety of polymer, aniline, and 

specialty chemical products. It also produces agricultural seed at its Victoria location.

Incitec Pivot, Ltd. (1 facility)

Incitec Pivot Ltd. acquired Dyno Nobel in June 2008. Dyno Nobel offers a range of 

explosives products and blasting solutions and is the largest explosives company in the United 

States. Incitec Pivot is an Australian-based fertilizer company. 

J.R. Simplot (1 facility)

J.R. Simplot is one of the largest privately held companies in the United States. In 

addition to sell varying grades of nitric acid, the company also manufactures fertilizers, turf, and 

a variety of other products. 

Koch Industries (3 facilities)

As one of the largest private companies in the world, Koch Industries offers a range of 

services, including commodity trading, ranching, refining, polymers, and fertilizers. In 2004, 

Koch acquired INVISTA, which is a leading producer in nylon fibers and adipic acid. Through 

Koch Fertilizers, LLC, the company operates a number of nitrogenous fertilizer facilities 

throughout the central United States.

LSB Industries (2 facilities: El Dorado Nitrogen/El Dorado Chemical)

LSB Industries is an Oklahoma City–based company providing customers with 

agricultural products, industrial chemicals, and explosives. Through its El Dorado Nitrogen 

subsidiary, LSB is the largest domestic merchant supplier of nitric acid. 

PotashCorp (2 facilities)

PotashCorp is a major player in all areas of agricultural fertilizer production. At its 

nitrogenous fertilizer plants, the company produces ammonia, nitric acid, urea, and other 

agricultural solutions.
2-18

Rentech, Inc. (1 facility: Rentech Energy Midwest Corporation)

Rentech produces nitrogen products, including anhydrous ammonia, ammonium nitrate, 

urea solutions, and nitric acid. It currently uses natural gas as a feedstock but is considering the 

transition to coal gasification. Rentech sells the majority of its products to customers within 150 

miles of the facility.

Solutia (1 facility)

Solutia’s primary business is specialty chemicals and it conducts business across the 

globe. Solutia produces window coatings and films at its Martinsville plant.

Trademark Nitrogen (1 facility)

Trademark Nitrogen is a small Florida company that manufactures nitrogen-based 

fertilizer products.

2.5.2 Parent Company Sales and Employment

To supplement the qualitative company profiles in the previous section, Table 2-8

displays annual revenue and employment data for each of the parent companies. This data is the 

most recent we are able to obtain for each parent company. The data reflect annual revenue and 

employment for either 2009 or 2010. Firms producing plastics and resins (NAICS 325211) are 

classified as small by the Small Business Administration (SBA, 2008) if they have fewer than 

750 employees. Firms producing nitrogenous fertilizers (NAICS 325311) are considered small if 

they have fewer than 1,000 employees. Firms producing paints and coatings (NAICS 325510) 

are considered small if they have fewer than 500 employees. Based on these criteria and the data 

presented in Table 2-8, three firms producing nitric acid are classified as small businesses.
2-19

Table 2-8. Annual Revenue and Employment Data for Each of the Parent Companies

Facility Name State Parent Company Headquarters

Parent Company

Sales (millions $) Employees

Agrium US WA Agrium Canada 9,129.00 10,000

Agrium US OH Agrium Canada 9,129.00 10,000

Agrium US CA Agrium Canada 9,129.00 10,000

Air Products TX Air Products and Chemicals, Inc. United States 8,256.20 18,900

Apache Nitrogen Products AZ Apache Nitrogen United States 31.70 82

CF Industries LA CF Industries United States 2,608.40 1,500

CF Industries OK CF Industries United States 2,608.40 1,500

CF Industries MS CF Industries United States 2,608.40 1,500

CF Industries IA CF Industries United States 2,608.40 1,500

Coffeyville Resources KS CVR Energy United States 3,136.30 667

Dyno Nobel WY Incitec Pivot Ltd Australia 3,418.90 4,500

El Dorado Nitrogen TX LSB Industries United States 531.84 1,179

El Dorado Nitrogen AR LSB Industries United States 531.84 1,179

First Chemical MS DuPont United States 26,109.00 60,000

Geneva Nitrogen UT Geneva Nitrogen United States 5,400,000 32

INVISTA TX Koch Industries United States 100,000.00 80,000

INVISTA TX Koch Industries United States 100,000.00 80,000

JR Simplot CA J.R. Simplot United States 4,500.00 10,000

Koch Nitrogen IA Koch Industries United States 100,000.00 80,000

PCS Nitrogen GA Potash Corp Canada 3,976.70 5,136

PCS Nitrogen LA Potash Corp Canada 3,976.70 5,136

Rentech Energy Midwest Corporation IL Rentech, Inc United States 183.00 250

Solutia FL Solutia Inc United States 1,667.00 3,400

TradeMark Nitrogen FL TradeMark Nitrogen United States NA NA

NA = no information available. 
2-20

2.6 References for Section 2

Agrium, Inc. 2010. 2009 Annual Report. 

http://www.agrium.com/investors/2009_annual_report.jsp.

CF Industries. 2010. Profile: History. CF Industries. 

http://www.cfindustries.com/profile_history.html.

CVR. 2009. CVR Energy Nitrogen Fertilizer Operations. CVR Energy Website. 2009. 

http://www.cvrenergy.com/NitrogenFertilizerOperations/index.html.

Dai, R. June 2010. IBISWorld Industry Report 32521. Plastic, Resin, & Rubber Manufacturing 

in the US. http://www.ibisworld.com.

Dow Chemical Company. 2008. Product Safety Assessment: Nitric Acid. Accessed April 21, 

2010. 

http://www.dow.com/PublishedLiterature/dh_0131/0901b80380131028.pdf?filepath=pro

ductsafety/pdfs/noreg/233-00312.pdf&fromPage=GetDoc.

European Fertilizer Manufacturers’ Association (EFMA). 2000. “European Fertilizer 

Manufacturers’ Association.” Best Available Techniques for Pollution Prevention and 

Control in the European Fertilizer Industry: Production of Nitric Acid, Booklet No. 2 of 

8. Accessed April 26, 2010. 

http://www.efma.org/PRODUCT%20STEWARDSHIP%20PROGRAM%2008/images/E

FMABATNIT.pdf.

Huang, W-Y. 2007a. Impact of Rising Natural Gas Prices on U.S. Ammonia Supply/WRS-0702. 

U.S. Department of Agriculture, Economic Research Service. 

http://www.ers.usda.gov/publications/WRS0702/wrs0702.pdf.

Huang, W-Y. 2007b. “Influence of Natural Gas Price on the Ammonia price, 2000 to 2006.”

Paper presented at annual meetings of the Southern Agricultural Economics Association, 

Mobile, AL. February 3-6. http://ageconsearch.umn.edu/bitstream/34929/1/sp07hu05.pdf.

IBISWorld. 2009. “Explosives Manufacturing in the U.S.: 32592.” 

http://www.ibisworld.com.www.lib.ncsu.edu:2048/industryus/default.aspx?indid=502.

IBISWorld. 2010a. “Fertilizer Manufacturing in the U.S.: 32531.” 

http://www.ibisworld.com.www.lib.ncsu.edu:2048/industryus/default.aspx?indid=502.

IBISWorld. 2010b. “Plastic, Resin, and Rubber Manufacturing in the U.S.: 32521.” 

http://www.ibisworld.com.www.lib.ncsu.edu:2048/industryus/default.aspx?indid=502.

ICIS. 2007. “Adipic Acid.” ICIS Chemical Business Online. 

http://www.icis.com/Articles/2007/07/06/4503569/Adipic-acid.html.

ICIS. 2008a. “Chemical Profile: Nitric Acid.” ICIE Chemical Business Online. 

http://www.icis.com/Articles/2008/05/19/9124327/chemical-profile-nitric-acid.html.
2-21

ICIS. 2008b. “Chemical Profile: Toluene Di-isocyanate.” ICIS Chemical Business Online.

http://www.icis.com/Articles/2008/04/07/9113516/Chemical-profile-Toluene-diisocyanate.html.

International Fertilizer Association (IFA). December 2009. Short-Term Fertilizer Outlook 2009-

2010. Prepared by Patrick Heffer and Michel Prud’homme.

http://www.fertilizer.org/ifa/Home-Page/FERTILIZERS-THE-INDUSTRY/Marketoutlooks.html.

Katz. J. April 15, 2010. “IW 50 Best: CF Industries and Terra Together At Last.” 

Industryweek.com. 

http://www.industryweek.com/articles/iw_50_best_cf_industries_and_terra_together_at_l

ast_21609.aspx.

Natural Gas Supply Association (NGSA). 2004. “Marketing.” NaturalGas.org. Accessed June 

29, 2010. http://www.naturalgas.org/naturalgas/marketing.asp.

PotashCorp. 2010. 2009 Financial Review Annual Report. 

http://www.potashcorp.com/media/POT_2009_AR_Financial_Review.pdf.

REMC. 2010. Rentech Energy Midwest Corporation. http://www.rentechinc.com/remc.php.

Richardson, A. September 2009. IBISWorld Industry Report 32592. Explosives Manufacturing 

in the US. http://www.ibisworld.com.

Richardson, A. 2010a. IBISWorld Industry Report 32531: Fertilizer Manufacturing in the U.S. 

http://www.ibisworld.com.www.lib.ncsu.edu:2048/industryus/default.aspx?indid=480.

Richardson, A. 2010b. IBISWorld Industry Report 32551: Paint Manufacturing in the U.S.

http://www.ibisworld.com.www.lib.ncsu.edu:2048/industryus/default.aspx?indid=492.

U.S. Census Bureau. May 2006. Concentration Ratios: 2002. 

http://www.census.gov/prod/ec02/ec0231sr1.pdf.

U.S. Census Bureau. 2010. American Fact Finder. Sector 31: Annual Survey of Manufactures: 

General Statistics: Statistics for Industry Groups and Industries: 2008 and 2007. Accessed 

April 20, 2010.

U.S. International Trade Commission. 2010. http://dataweb.usitc.gov/.

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.
3-1

SECTION 3

ENGINEERING COST ANALYSIS

This section presents EPA’s estimated cost impacts for new, modified, and reconstructed

sources to comply with a standard of 0.5b NOX/ton nitric acid.

To gather data for the cost estimation, EPA issued an Information Collection Request 

(ICR) under Section 114 authority to obtain NOX emissions data using EPA Methods 7, 7A, 7B, 

7C, 7D, 7E (modified version), or 320. The ICR also collected cost data for NOX abatement 

technologies, including nonselective catalytic reduction (NSCR), selective catalytic reduction 

(SCR), and hydrogen peroxide (H2O2) injection. Cost data were received from 9 facilities with a 

total of 12 nitric acid production trains. This information was summarized in Summary of Cost 

Data Received from Section 114 ICR (NOX Summary) dated November 22, 2010. The capital 

recovery factor was based on 7% interest and a 15-year useful life.

The NOX Summary memo contained production data ranging from 40 tons per day (tpd) 

to 1,600 tpd of nitric acid. The data support the use of two model plants to represent the nitric 

acid production industry. The first model plant is 300 tpd, and the second model plant is 1,000 

tpd. In the NOX Summary memo, the cost data were normalized based on the production rate at 

the facility (cost per ton of nitric acid produced). Table 3-1 shows the results of the cost data 

analysis for NOX control.

Table 3-1. Normalized NOX Control Costs by Model Plant

Control 300 tpd ($/ton) 1,000 tpd ($/ton)

NSCR $20.02 $7.80

SCR $3.93 $1.10

H2O2 $2.06 $1.36

As described in Section 2, EPA projected growth in nitric acid production for the period 

2011 through 2016 to be approximately 1.6 million tons. Assuming 350 days per year, this 

equals approximately 4,586 tpd of nitric acid production during the period. Using the model 

plants, the estimate of 4,586 tpd corresponds to two production trains that produce 300 tpd and 

four production trains that produce 1,000 tpd over the 5-year period after promulgation.

For the six new production trains predicted from 2011 to 2016, the annualized costs of 

controlling NOX emissions for the three types of control equipment outlined in The NOX
3-2

Summary were calculated using the costs in Table 3-1. The control costs are shown in Table 3-2.

These are the costs for each of the control devices in the fifth year after promulgation of these 

standards.

Table 3-2. NOX Control Costs for All New Production Trains in 2016

Model Plant (tpd)

Number of 

Plants Nitric Acid (tons) NSCR SCR H2O2

300 2 210,000 $4,204,200 $825,300 $432,600

1,000 4 1,400,000 $10,920,000 $1,540,000 $1,904,000

The production trains could use any of the three control types to control NOX emissions, 

as shown by the control efficiencies in Table 3-3, but in estimating cost impacts, EPA assumed 

that SCR would be universally applied. Although hydrogen peroxide injection has the lowest 

potential costs, this control may not be feasible for all new production trains.

Table 3-3. NOX Control Efficiencies

Control Efficiency

NSCR 99%

SCR 98%

H2O2 95%

3.1 Emission Limit of 0.5 lb NOX/ton

Using the control efficiency for SCR, the potential NOX emission reductions were 

calculated in Table 3-4. The baseline emissions were calculated as 3.0 lb NOX/ton acid produced 

(the level of the existing NSPS). The controlled emissions were calculated as 0.5 lb NOX/ton acid

produced (the recommended proposed level for the revised NSPS).

The last step in calculating impacts for affected sources to meet the revised standard of 

0.5 lb NOX/ton acid is to calculate the costs and reductions per year over the 5-year period after 

promulgation. In addition to control equipment, each new production train will also be required 

to install a stack gas flow monitor. The annualized cost of a stack gas flow monitor is $15,019 

for the second quarter of 2010. The requirement of a NOX Continuous Emissions Monitoring 

System (CEMS) was included in the existing NSPS, so its cost is not included in this analysis.
3-3

Table 3-4. NOX Emission Reductions for All New Production Trains with SCR Control in 

2016

Model Plant 

(tpd)

Days per 

year

Number 

of Plants

Nitric 

Acid 

(tons)

Baseline 

NOX

(lb/ton)

Controlled 

NOX (lb/ton 

acid)

Controlled 

NOX

Emissions 

(tons)

NOX

Emission 

reductions 

(tons)

300 350 2 210,000 3.0 0.6 63 252

1,000 350 4 1,400,000 3.0 0.6 420 1,680

SCR is already being employed to control NOX emissions to the current NSPS level of 

3.0 lb NOX/ton acid. As shown in Summary of Test Data Received from Section 114 ICR, dated 

August 25, 2010, there are five production trains using SCR that already meet the proposed 

revised NSPS level of 0.5 lb NOX/ton acid. The control device costs are based on current usage 

where sources are only required to meet 3.0 lb NOX/ton. Sources are not likely to spend 

additional money to meet a limit of 0.5 lb NOX/ton acid that is not mandatory. Therefore, we 

believe that the lower limit is achievable without incremental cost impacts.

Accordingly, EPA projects no incremental control costs to control NOX emissions from 

the current NSPS limit of 3.0 lb NOX/ton acid to the proposed NSPS limit of 0.5 lb NOX/ton 

acid. The costs of adding stack flow monitors in the fifth year after promulgation are shown in 

Table 3-5.

Table 3-5. Incremental Costs in the Fifth Year after Promulgation for All New 

Production Trains

Model Plant 

(tpd)

Number of 

Plants

$2010—2

nd Quarter

SCR Cost Stack Flow Monitor Cost Total Annualized Costs 

300 2 $0 $30,038 $30,038

1,000 4 $0 $60,076 $60,076

Using the total costs of SCR costs and monitoring costs, the cost-effectiveness was also 

calculated. These numbers are shown in Table 3-6.

For the 300 tpd model plant, national total annualized costs in the fifth year after 

promulgation are $30,038. The amount of NOX reductions expected in the fifth year after 

promulgation is 252 tpy. This results in a cost-effectiveness of approximately $120.
3-4

Table 3-6. Incremental Cost Effectiveness in the Fifth Year after Promulgation for All 

New Production Trains

Model 

Plant (tpd)

Number of 

Plants

Total Annualized Costs

($2010—2

nd quarter)

NOX Emission 

Reductions (tpy)

Cost-Effectiveness

($/ton NOX)

300 2 $30,038 252 $119.20

1,000 4 $60,076 1,680 $35.76

For the 1,000 tpd model plant, national total annualized costs in the fifth year after 

promulgation are $60,076. The amount of NOX reductions expected in the fifth year after 

promulgation is 1,680 tpy. This results in a cost-effectiveness of approximately $36/ton of NOx 

reduced.

3.2 References for Section 3

CEMS Cost Model. Updated March 2007. Accessed November 17, 2010.

Memorandum from M. Icenhour, RTI International, to B. Neuffer, EPA. Summary of Cost Data 

Received from Section 114 ICR. November 22, 2010.

Memorandum from M. Icenhour, RTI International, to B. Neuffer, EPA. Summary of Test Data 

Received from Section 114 ICR. August 25, 2010.

U. S. EPA. January 22, 2009. Technical Support Document for the Nitric Acid Production 

Sector: Proposed Rule for Mandatory Reporting of Greenhouse Gases.

http://www.epa.gov/climatechange/emissions/archived/downloads/tsd/TSD%20Nitric%2

0Acid%20_EPA%201-22-09.pdf .
4-1

SECTION 4

ECONOMIC IMPACTS ON NEW SOURCES IN THE NITRIC ACID INDUSTRY

The proposed rule will increase the cost of investing in new nitric acid production 

capacity, which in turn will increase the cost of producing nitric acid. As noted above, only a 

small share of nitric acid is sold (approximately 10%); the rest is consumed on site to produce 

other chemical products, including fertilizer, plastics and resins, and explosives. Thus, the 

proposed nitric acid NSPS may result in market impacts in the market for nitric acid or in the 

markets for the other products that nitric acid is used to produce.

4.1 Modeling Approach to Estimating the Impacts on the Market for Nitric Acid

EPA’s analysis of impacts on the market for nitric acid employs a model that recognizes 

that the decision facing a firm considering investing in new nitric acid production capacity is an 

investment decision. Investment decisions differ from operating decisions in that they involve 

whether the firm should put in place new plant and equipment. The investment decision is thus a 

long-run decision, since the time frame is sufficiently long that all inputs, including capital, can 

be varied. A firm will invest in new capital only if the current and future expected market price is 

sufficient to cover both the cost of operating the new capital and the annualized cost of 

purchasing and installing it.

To analyze the possible impacts of the proposed NSPS on the market for nitric acid, EPA 

assumes that existing nitric acid production lines are operating more or less at capacity, and the 

market for nitric acid begins the period of analysis (2011 through 2016) in long-run equilibrium. 

Figure 4-1 shows the market for nitric acid in 2010; demand is shown by D1, and is downward 

sloping. Equilibrium quantity is shown by Q1 and equilibrium market price is shown by P1.

However, as demand for nitric acid grows over time, the market price increases. Existing 

producers would like to produce more nitric acid to meet this demand but are unable to do so, 

given their plant capacity. Thus, new product lines must be installed to meet the increased 

demand. Producers will be willing to invest in new nitric acid production capacity as long as the 

price of nitric acid is sufficient to cover the per-ton cost of operating the product lines plus the 

per-ton annualized cost of purchasing and installing the equipment. Figure 4-2 shows a long-run 

supply curve for nitric acid. Existing suppliers produce Qe; new suppliers face a per-ton cost 

(average total cost) that includes both the average variable cost of producing the nitric acid (a) 

and the average fixed cost of purchasing and installing the new capital equipment (f), for an 

average total cost of t, and produce Qn. 
4-2

Figure 4-1. 2010 Market for Nitric Acid

Figure 4-2. Market Supply of Nitric Acid, including New Source

Figure 4-3 shows the baseline market conditions in 2016. In 2016, demand for nitric acid 

has increased to D2. In the new market equilibrium, Q1 would be produced by existing suppliers, 

and Q2- Q1 would be produced by newly installed nitric acid product lines.

$/ton

Tons nitric acid

D1

Q1

P1

S1
4-3

Figure 4-3. Increased Demand for Nitric Acid at Baseline

The revised nitric acid NSPS standard will increase the cost of producing nitric acid, 

resulting in an upward shift in the supply curve for new facilities in the amount of the per-ton 

costs of compliance. S3 in Figure 4-4 shows the with-regulation supply. Note that in this figure, 

D1 has been omitted for simplicity. As a result of the new higher costs, the equilibrium quantity 

of nitric acid is projected to decline slightly from Q2 to Q3.
4-4

Figure 4-4. Market for Nitric Acid, With Proposed NSPS

4.2 Possible Impacts on Market for Nitric Acid

To implement the modeling approach described above, EPA gathered information on the 

estimated market quantity and market price for nitric acid. Over the period 2011 through 2016, 

EPA projects that nitric acid production will increase by 1.6 million. Historically, approximately 

10% of nitric acid production has been marketed, with the remaining 90% used in house to 

produce other commodities. For simplicity, EPA modeled the impacts in the market for nitric 

acid under the assumption that one of the 300 tpd (105,000 tpy) product lines is a new 

commercial facility. This is a simplification, because not all marketed nitric acid is produced in 

exclusively commercial facilities. We thus assigned the per-facility cost ($15,019) to this new 

facility and computed the per-ton increase in their cost of approximately $0.14 per ton. The 

social cost of the proposed rule was computed as the costs borne by producers of nitric acid and 

the costs borne by consumers of nitric acid. These are shown by areas labeled A, B, and C in 

Figure 4-4. The costs borne by producers include the compliance costs paid on the (remaining) 

quantity produced by new sources (Area A), and the production cost savings due to the reduction 

in output (- area B—a cost savings). The costs facing consumers include the loss in consumption 

(areas B plus C) due to the reduction in equilibrium market quantity. Summing these areas, the 

social cost of the proposed rule = A – B + B + C, or A + C. 
4-5

Table 4-1 shows the market impacts and estimated social costs for this scenario. The 

baseline quantity of nitric acid sold is approximately 932,000 tons, including 105,000 tons 

produced by a new product line. With the proposed rule, the market price increases by 

approximately $0.14 per ton or about 0.07%, and the market quantity declines. After the market 

has adjusted to these increased costs, the equilibrium output falls by approximately 600 tons or 

0.6%; thus, the new facility produces not 105,000 tons but 104,400 tons. 

Table 4-1. Market Impacts of the Proposed Rule: Market for Nitric Acid

Baseline

WithRegulationPercentage

Change

Quantity (tons) 932,145 931,539 - 0.07%

Existing producers 827,145 827,145 0.00%

New producers 105,000 104,394 - 0.58%

Price ($/ton) $220.00 $220.14 0.07%

Social cost

Change in producers’ surplus $118,398

Change in consumers’ surplus - $133,373

Total social cost - $14,975

The engineering cost of the rule (assuming one new commercial production train is 

affected) is $15,019; taking into account market adjustments, the social cost of the rule is 

estimated to be $14,975, about 0.3% less than the engineering cost.

4.3 Estimated Impacts on Markets for Products Using Nitric Acid as an Input

Next, EPA estimated the economic impacts on three markets that use nitric acid as a 

production input: nitrogenous fertilizer, explosives, and plastics and resins. If producers in these 

sectors invest in new nitric acid product lines or purchase nitric acid from commercial suppliers 

that invest in new nitric acid product lines, the costs of complying with the proposed NSPS 

would increase the cost of producing the final products that use nitric acid as an input. In each of 

these markets, EPA estimated the economic impacts using industry-level data for value of 

shipments at baseline. EPA used this dollar value to represent baseline market quantity and 

assigned a normalized price of $1. The impacts are thus measured against the baseline of 

domestic value of shipments in each market with no change in international trade in the final 
4-6

goods. This is a simplification, but because the costs and thus the estimated impacts are very 

small, it is not unrealistic.

To assess the maximum potential impact in each market, EPA assigned all the 

compliance costs to each of the markets (reflecting the possibility that all the new sources may 

be supplying nitric acid to that industry). Using the demand and supply elasticities for these 

markets shown previously in Table 2-3, EPA then estimated the percentage change in market 

output in each market and computed the associated change in market quantity.

Table 4-2 shows the market impacts and estimated social costs in the markets for each of

these nitric acid–using products. Even assuming that all the affected new sources are within a 

given sector and thus all the costs are incurred by that sector, market quantity is estimated to 

change by a small fraction of a percentage. Thus, if the costs of complying with the proposed 

NSPS are incurred by new nitric acid product lines in the sectors that use nitric acid as an input, 

there will be extremely small impacts on the markets for their products, even if all the costs are 

assumed to be incurred by a single sector.

Table 4-2. Estimated Impacts of Nitric Acid NSPS on Sectors Using Nitric Acid as an 

Inputa

Nitrogenous Fertilizer 

Production (325311) Explosives (325920)

Plastics and 

Resins

(325211)

Market impact analysis

Baseline value of shipments ($103) $8,437,377 $1,973,192 $85,471,475

Cost of compliance ($103) $90.114 $90.114 $90.114

Percentage change in value of 

shipments - 0.00046% 0.00171% 0.00004%

Social cost 

Change in consumers’ surplus 

($103)

- $38.531 - $33.660 - $38.083

Change in producers’ surplus ($103) - $51.583 - $56.452 - $52.031

Change in total surplus ($103) - $90.1134 - $90.1118 - $90.1139

a

Impacts on each sector are estimated assuming that all the new sources are within that sector and thus all 

compliance costs are incurred by that sector.
4-7

4.5 Impacts on Small Entities of the NSPS Review of Nitric Acid for NOX on New 

Sources

Under the RFA as amended by SBREFA, EPA must evaluate potential impacts to small 

entities resulting from its actions. Small entities may be defined as (1) a small business, as 

defined by SBA’s regulations at 13 CFR Part 121.201 (SBA, 2008); (2) a small governmental 

jurisdiction that is a government of a city, county, town, school district, or special district with a 

population of less than 50,000; or (3) a small organization that is any not-for-profit enterprise 

that is independently owned and operated and is not dominant in its field.

EPA assessed the possible impacts of the NSPS Review of Nitric Acid controls for NOX

on small entities with new sources of production. To analyze the economic impacts on small 

entities with new sources, EPA first gathered data on facilities producing nitric acid and then 

identified those facilities that could be affected by the proposed regulation. In total, EPA 

identified 40 nitric acid facilities owned by 18 different parent companies. Of the 18 owner 

firms, four qualify as small entities based on guidance from the SBA and EPA’s 2006 Final 

SBREFA Guidance (EPA, 2006) and sales/revenue data collected. Three of the entities, Apache 

Nitrogen, TradeMark Nitrogen, and Rentech Energy Midwest Corporation, are manufacturers of 

nitrogen-based fertilizers (NAICS 32531), and the fourth entity, Geneva Nitrogen, engages in 

manufacturing explosives (NAICS 32592). According to the SBA’s small business size 

standards, a small entity in each of these industries is a parent company with 1,000 employees or 

less.

To measure the size of the potential impacts on small entities of complying with the 

NSPS, EPA developed cost-to-sales ratios (CSRs) for a 300 tpd and 1,000 tpd new source model 

plant. EPA assumes that the model plants’ operating costs and revenues are similar to the four

existing small entities described above. Using the estimated total annualized compliance cost for 

a new source model plant and the most recent available revenue data for the existing small 

entities (Table 4-3), EPA generated mean and median CSRs.
4-8

Table 4-3. Employment and Revenue of Existing Small Entities

Parent Company Employment Revenue ($2010)

Apache Nitrogen 82 $63,580,000

Geneva Nitrogen 32 $5,400,000

TradeMark Nitrogen 32 $35,000,000

Rentech 252 $130,600,000

Based on the model small firm CSRs, expected impacts to small entities are characterized 

in Table 4-4. CSRs for both plants are identical, because total annualized compliance costs are 

the same, and do not exceed 0.1%. Based on these low expected impacts to small entities, EPA 

does not expect the proposed NSPS to have a significant impact on a substantial number of small 

entities (SISNOSE) owning new, modified, or reconstructed sources that produce nitric acid.

Table 4-4. Cost-to-Sales Ratios for Model Small Firms Owning New 300 tpd and 1,000 

tpd Plants

Summary Statistic Employment Revenue ($2010)

Cost-to-Sales Ratio

300 tpd Plant 1,000 tpd Plant

Mean small entity data 100 $58,645,000 0.03% 0.03%

Median small entity data 57 $49,290,000 0.03% 0.03%

4.6 References for Section 4

U.S. Environmental Protection Agency (EPA). 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/rfaguidance11-00-06.pdf

U.S. Small Business Administration. November 5, 2010. “Table of Small Business Size 

Standards Matched to North American Industry Classification System Codes.”

http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf 
5-1

SECTION 5

CONCLUSIONS

This document has analyzed the economic impacts of the proposed New Source 

Performance Standards for Nitric Acid Producers. The proposed rule imposes more stringent 

limits on NOX emissions from new, modified, or reconstructed sources in the nitric acid industry. 

EPA estimates that there will be six new nitric acid production trains during the years 

following promulgation (2011 through 2016), two with production capacity of 300 tpd and four 

with production capacity of 1,000 tpd. To comply with the proposed NSPS, EPA estimates that 

new sources would not incur incremental control costs, but new sources would be required to 

undertake enhanced monitoring, recordkeeping, and reporting at a cost of $15,019 per new 

product line. (National total annualized cost of compliance for the six new sources is estimated to 

be $90,114.)

EPA examined the potential impacts of the proposed NSPS on a new source in the 

commercial nitric acid sector and on new sources owned by facilities that produce nitrogenous 

fertilizers, explosives, or plastics and use nitric acid as an input in their production processes. 

Overall, EPA estimates that market impacts in all of the markets will be extremely small. 

EPA also examined the potential for significant impacts on small businesses that invest in 

new nitric acid product lines. EPA used the characteristics (firm employment and firm sales 

revenues) for the four small entities that currently produce nitric acid to create model small firms 

in the affected industry. Using the mean and median sales revenues for the existing small firms 

as typical company sales for small entities that produce nitric acid, EPA estimates that the CSRs 

would be less than 0.1%. Thus, EPA does not expect the proposed NSPS to impose a significant 

impact on a substantial number of small entities (or SISNOSE).
APPENDIX A: 

INDUSTRY DATA AND PROJECTIONS FOR NAICS 32521
A-1

Table A-1. Industry Data and Projections for NAICS 32521, Plastic, Resin, and Rubber Manufacturing ($2010)

Year

Revenue

($m)

Industry 

Value Added 

($m)

Establishments Enterprises Employment Exports ($M) Imports ($m) Wages($m)Domestic 

Demand ($m)

Production 

($m)

2001 62,790 20,902 783 494 68,363 17,367 8,294 4,889 53,717 39,200

2002 62,599 22,778 965 630 76,817 17,542 8,210 5,264 53,267 41,600

2003 66,034 23,941 954 664 72,032 18,659 9,147 4,973 56,522 41,000

2004 74,768 29,040 944 653 65,408 22,108 10,409 4,703 63,068 43,500

2005 92,193 34,367 976 686 67,539 25,090 13,089 4,954 80,192 41,300

2006 91,756 34,756 944 669 62,612 27,887 13,427 4,624 77,296 41,500

2007 90,750 34,000 949 660 62,000 31,417 12,643 4,582 71,976 41,200

2008 87,500 33,000 915 645 60,300 33,139 13,374 4,486 67,736 38,750

2009 80,530 31,000 875 630 55,000 25,450 10,180 4,174 65,260 35,500

2010 83,052 31,750 865 625 56,000 27,000 10,750 4,100 66,802 N/A

2011 85,070 32,300 867 627 56,750 29,500 12,000 4,150 67,570 N/A

2012 88,565 33,200 868 629 56,250 31,000 12,950 4,125 70,515 N/A

2013 92,510 34,500 865 628 55,000 32,550 13,750 4,085 73,710 N/A

2014 94,250 34,750 863 627 54,500 34,000 14,500 4,075 74,750 N/A

2015 96,520 35,450 860 625 54,000 35,300 15,250 4,050 76,470 N/A

Source: Dai, R. June 2010. IBISWorld Industry Report 32521. Plastic, Resin, & Rubber Manufacturing in the US. http://www.ibisworld.com.
A-2

Table A-2. Industry Data and Projections for NAICS 32531, Fertilizer Manufacturing ($2010)

Year Revenue ($m)

Industry 

Value Added 

($m)

Establishments Enterprises Employment Exports ($M) Imports ($m) Wage ($m)Domestic 

Demand ($m)

Production 

($m)

2001 12,281 2,491 704 492 21,405 2,850 3,412 1,180 12,843 19,000

2002 12,287 4,077 727 511 20,718 2,809 2,778 1,127 12,256 18,000

2003 13,207 4,338 679 478 19,688 3,100 4,097 1,076 14,204 N/A

2004 14,704 5,345 674 474 17,843 3,360 4,907 1,009 16,251 N/A

2005 14,084 5,137 659 474 17,076 3,665 6,656 979 17,074 N/A

2006 14,430 5,517 664 482 16,054 3,517 6,063 926 16,976 N/A

2007 16,805 5,894 665 503 17,777 4,012 7,814 1,031 20,607 N/A

2008 21,075 7,000 670 489 17,350 8,268 12,919 1,000 25,726 N/A

2009 18,000 6,300 660 486 16,500 4,500 6,500 950 20,000 N/A

2010 19,200 6,625 656 485 16,550 4,800 8,150 955 22,550 N/A

2011 19,700 6,755 653 483 16,250 5,085 8,800 940 23,415 N/A

2012 20,150 7,000 652 483 15,850 5,300 9,250 920 24,100 N/A

2013 20,700 7,200 651 481 15,300 5,600 9,900 895 25,000 N/A

2014 21,200 7,400 650 480 14,750 5,900 10,500 870 25,800 N/A

2015 21,750 7,600 650 480 14,500 6,225 11,100 855 26,625 N/A

Source: Richardson, A. March 2010a. IBISWorld Industry Report 32531. Fertilizer Manufacturing in the U.S. http://www.ibisworld.com.
A-3

Table A-3. Industry Data and Projections for NAICS 32551, Paint Manufacturing ($2010)

Year Revenue ($m)

Industry 

Value Added 

($m)

Establishments Enterprises Employment Exports ($m) Imports ($m) Wages($m)Domestic 

Demand ($m)

Production 

(gallons)

2001 24,447.8 12,043.8 1,463 1,192 51,084 1,851.4 902 2,677.2 23,498.4 N/A

2002 24,219 11,592.3 1,363 1,107 46,347 1,813.3 719.8 2,495 23,125.5 N/A

2003 23,954.2 12,217.1 1,371 1,114 44,852 1,835.1 742.5 2,244.7 22,861.6 N/A

2004 25,595.8 13,516.7 1,374 1,115 41,547 1,857.9 773.1 2,352.5 24,511 N/A

2005 25,847.2 13,360.3 1,365 1,105 40,073 1,939 812.9 2,296.4 24,721.1 N/A

2006 25,338.1 13,039.7 1,344 1,095 39,006 2,155.9 917.3 2,207.6 24,099.5 N/A

2007 24,861.5 12,130.6 1,369 1,131 41,893 2,203 942.7 2,308.5 23,601.2 N/A

2008 23,750 11,500 1,325 1,090 40,000 2,170.7 868.1 2,225 22,447.4 N/A

2009 22,000 10,800 1,290 1,060 37,500 1,892 599.9 2,125 20,707.9 N/A

2010 22,550 11,000 1,280 1,055 36,250 2,000 675 2,050 21,225 N/A

2011 23,200 11,350 1,283 1,060 36,350 2,175 825 2,055 21,850 N/A

2012 23,900 11,750 1,278 1,057 36,200 2,325 910 2,050 22,485 N/A

2013 24,650 12,100 1,270 1,053 36,000 2,450 990 2,040 23,190 N/A

2014 25,400 12,450 1,265 1,050 35,850 2,550 1,035 2,035 23,885 N/A

2015 26,150 12,775 1,260 1,045 35,700 2,650 1,080 2,030 24,580 N/A

Source: Richardson, A. 2010b. IBISWorld Industry Report 32551: Paint Manufacturing in the U.S.

http://www.ibisworld.com.www.lib.ncsu.edu:2048/industryus/default.aspx?indid=492.
A-4

Table A-4. Industry Data and Projections for NAICS 32592, Explosives Manufacturing ($2010)

Year Revenue ($m)

Industry 

Value Added 

($m)

Establishments Enterprises Employment Exports ($M) Imports ($m) Wages($m)Domestic 

Demand ($m)

Production 

($m)

2001 1,322 737 100 63 6,473 256 195 312 1,261 2,376

2002 1,230 718 92 61 5,721 300 200 277 1,129 2,510

2003 1,193 712 89 57 5,534 413 233 263 1,013 2,287

2004 1,212 659 84 53 5,234 480 288 266 1,019 2,523

2005 1,330 571 82 54 5,617 463 305 285 1,171 3,200

2006 1,506 710 82 53 6,018 536 368 302 1,338 3,160

2007 1,807 939 83 56 6,000 581 381 324 1,607 3,120

2008 1,950 1,035 81 55 5,970 573 358 320 1,734 3,115

2009 1,850 950 79 53 5,950 500 275 300 1,625 3,100

2010 1,875 970 78 N/A 5,930 N/A N/A N/A N/A N/A

2011 1,950 1,015 78 N/A 5,900 N/A N/A N/A N/A N/A

2012 2,050 1,075 79 N/A 5,925 N/A N/A N/A N/A N/A

2013 2,100 1,100 79 N/A 5,920 N/A N/A N/A N/A N/A

2014 2,150 1,130 78 N/A 5,920 N/A N/A N/A N/A N/A

2015 2,200 1,155 78 N/A 5,915 N/A N/A N/A N/A N/A

Source: Richardson, A. September 2009. IBISWorld Industry Report 32592. Explosives Manufacturing in the US. http://www.ibisworld.com