1 Terry Gray Call with Industrial Economics August 24, 2009

Terry Gray’s Comments on IEc/EPA Draft Materials Characterization Paper on Scrap Tires

• In terms of the sectors that generate scra p tires, we appear not to cover scrapped vehicles. Recommends that we check the RMA report for info on tire yards or scrap yards. This isn’t a key generating se ctor though, so it’s not a huge omission.

• He liked how we standardized the 2005 and 2007 data from the RMA reports to compare the 2005 and 2007 data.

• Where we state that the h eat content of whole tires is 14,000 Btu/lb and that the corresponding value for TDF is up to 15,500 Bt u/lb, it would be useful to mention that the difference is due to the removal of wire.

• On page 4, where we state that the metal in tires provides a benefit to cement kilns, we should clarify that it’s the reinforcing steel in the tires.

• On page 4, we state that the use of whole tires in units other than cement kilns is limited because whole tires do not fit in many ot her units. It would be more correct to say that the use of whole tires is limited by whether they are compatible with the combustion and handling characteris tics of individual combustion units.

• On page 5 we state that the use of TDF in combustion units is typically limited to blends of 10 to 30 percent of total energy i nput due to the high rates of heat release and the low moisture content of TDF. It would be more appropriate to say less than 30 percent.

• The total of the numbers in Exhibit 5 doesn’t match the main text.

• Are 100 percent of truck tires diverted to ground rubber as we state in our paper. Terry thinks it would be more appropriate to say that a high er percentage is diverted to ground rubber, where pro cessors are available.

• On page 6, we state that the reluctance of State transportation agencies has hindered the development of Rubber Modified As phalt markets. This reluctance reflects concerns about cost and performance.

• Economics drives the landfilling and monofilling of scrap tires, as these are often the least costly management options.

• Some, not most, tire processors send TDF to end users indirectly through brokers.

• Regarding footnote 1 in Exhibit 8, he doesn ’t agree that whole tires have better combustion characteristics than chipped tires, but he agrees that there are energy savings from avoided shredding.

• Regarding the processing discussion on pa ges 8 and 9, Terry recommends that we clarify that as you go to smaller particle sizes, you can more easily remove the wire from the tire. Also, metal removal per se doesn’t increase pro cessing costs. It’s making the smaller particle size requires to remove metal that increases processing costs. The price of TDF increases with smaller particle size with metal removal.

• He recommends that we remove the brief discussion of cryogenics from the paper because it’s currently not feasib le for commercial applications.2 • Regarding pyrolysis, he recommends addi ng that the solid char product is among the low value outputs that we allude to.

• With respect to the processing of tires from stockpiles, when tires from large stockpiles are processed, it’s us ually onsite at the stockpile itself. Stockpile tires can also be used for some civ il engineering applications.

• Be sure to indicate that TDF has been appr oved for use in facilities in 34 states, per RMA’s report.

• Only a few states pay kilns to accept tir es. Kilns are paid up to $0.25 per tire.

• Regarding NOx emissions, he thinks that th e available data are inconclusive. He believes that using tires leads to a reduc tion in NOx emissions in most, but not all

cases.